Hi!!
Freinds am new joinee and i dnt knw hw to post questions and all so please help me with dis.
And i have one query as well relating to section 138 of N.I Act i.e. what is the time limit of filing a complaint to magistrate if one fails to pay the money within 15 days of receipt of notice under section 138 of N.I. Act.
Does limitation Act will be applicable in this case i.e. Can we file a complaint within 1 yr from the date when 15 days of receipt of notice by the drawer have been expired .
Thnks
Sheetal Saluja
From India, Delhi
Freinds am new joinee and i dnt knw hw to post questions and all so please help me with dis.
And i have one query as well relating to section 138 of N.I Act i.e. what is the time limit of filing a complaint to magistrate if one fails to pay the money within 15 days of receipt of notice under section 138 of N.I. Act.
Does limitation Act will be applicable in this case i.e. Can we file a complaint within 1 yr from the date when 15 days of receipt of notice by the drawer have been expired .
Thnks
Sheetal Saluja
From India, Delhi
Hi Sheetal,
Cheque Bouncing is made punishable as offence under Negotiable Instrument Act. The drawer can be awarded two years of imprisonment and fine may extend to twice the amount of the cheque or both. These are the following essentials of Section 138 for making the dishonour of cheque an offence:-
1. Cheque should have been issued for the discharge , in whole or part, of any debt or other liability.
2. The cheque should have been presented within period of six months or within period of its validity, whichever is earlier.
Note:- Cheque may be presented any number of times for collection with in its validity.
3. The payee or the holder in due course should have issued a notice in writing to the drawer with in thirty days of the receipt of information by him from the bank regarding the return of cheque as unpaid.
4. After the receipt of the said notice by the payee or the holder in due course, the drawer should have failed to pay the cheque amount with in fifteen days of the receipt of the said notice.
Note:- Notice of dishonour is unnecessary when the party entitled a notice cannot after due search be found(Sec.98).
5. On non-payment of the amount due on dishonoured cheque within fifteen days of the receipt of notice by the drawer, the complaint should have been filed within one month from the date of expiry of grace time of fifteen days, before a Metropolitan Magistrate not below the rank of a Judicial Magistrate of the First Class. The cognizance of a complaint may be taken by the court after the prescribed period, if the complaint satisfies the court that he had sufficient case for not making complaint within such period.
6. The Offence under this act is compoundable.
Regards,
Neeraj K. Singh
From India, Mumbai
Cheque Bouncing is made punishable as offence under Negotiable Instrument Act. The drawer can be awarded two years of imprisonment and fine may extend to twice the amount of the cheque or both. These are the following essentials of Section 138 for making the dishonour of cheque an offence:-
1. Cheque should have been issued for the discharge , in whole or part, of any debt or other liability.
2. The cheque should have been presented within period of six months or within period of its validity, whichever is earlier.
Note:- Cheque may be presented any number of times for collection with in its validity.
3. The payee or the holder in due course should have issued a notice in writing to the drawer with in thirty days of the receipt of information by him from the bank regarding the return of cheque as unpaid.
4. After the receipt of the said notice by the payee or the holder in due course, the drawer should have failed to pay the cheque amount with in fifteen days of the receipt of the said notice.
Note:- Notice of dishonour is unnecessary when the party entitled a notice cannot after due search be found(Sec.98).
5. On non-payment of the amount due on dishonoured cheque within fifteen days of the receipt of notice by the drawer, the complaint should have been filed within one month from the date of expiry of grace time of fifteen days, before a Metropolitan Magistrate not below the rank of a Judicial Magistrate of the First Class. The cognizance of a complaint may be taken by the court after the prescribed period, if the complaint satisfies the court that he had sufficient case for not making complaint within such period.
6. The Offence under this act is compoundable.
Regards,
Neeraj K. Singh
From India, Mumbai
Thank u so much Neeraj for the information..!!!
However, could u plz tell that which part of section says that the Complaint should be filed within 30 days of expiry of the grace period. Wherein as per my knowlege its not provided in section and if nothing is provided in section then limitation period of 1year from the date of expiry of grace period would apply. Please Clarify.
Thanks
From India, Delhi
However, could u plz tell that which part of section says that the Complaint should be filed within 30 days of expiry of the grace period. Wherein as per my knowlege its not provided in section and if nothing is provided in section then limitation period of 1year from the date of expiry of grace period would apply. Please Clarify.
Thanks
From India, Delhi
Hi Sheetal,
Section 142 of the Negotiable Instruments Act, 1881 (Cognizance of offences), clause (a) and (b) state that:
(a) No court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause-of-action arises under clause (c) of the provison to section 138.
Regards,
Neeraj K. Singh
From India, Mumbai
Section 142 of the Negotiable Instruments Act, 1881 (Cognizance of offences), clause (a) and (b) state that:
(a) No court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause-of-action arises under clause (c) of the provison to section 138.
Regards,
Neeraj K. Singh
From India, Mumbai
Dear Sheetal,
I would suggest before taking legal action you must communicate in the below format:
"Dear Sir,
We regret to inform you that your Cheque No 1111111, Dt 12-02-09 , RS XYZ against payment of our outstanding has been returned unpaid from banker for the reason “INSUFFICIENT FUNDS/stopped by drwaee ” vide dishonor advice dated .
“In the event of cheque being dishonor for any reason what so ever, a demand draft will be arranged within 48 hrs of cheque dishonored. Also liable to pay full bank commission charges on any dishonored document in addition to interest/freight cost of dispatch and rebooking of goods.”
Further as per the Supreme Court’s latest interpretation of Section 138 of the Negotiable Instrument Act. 1861 “bouncing of cheques reserve the right of other legal remedies both civil and criminal, it being an offence to the drawee”.
In view of above, you are hereby requested to send us Demand draft for Rs XYZ plus against RS ABC bank charges plus interest @ 2% per month on such amount for delayed payment.
In case you have already send the said payment then please ignore this letter otherwise treat this as a legal notice under section 138 of Negotiable Instrument Act."
Please note the expiry date is 6 month only from the date of issue.
From India, Delhi
59I would suggest before taking legal action you must communicate in the below format:
"Dear Sir,
We regret to inform you that your Cheque No 1111111, Dt 12-02-09 , RS XYZ against payment of our outstanding has been returned unpaid from banker for the reason “INSUFFICIENT FUNDS/stopped by drwaee ” vide dishonor advice dated .
“In the event of cheque being dishonor for any reason what so ever, a demand draft will be arranged within 48 hrs of cheque dishonored. Also liable to pay full bank commission charges on any dishonored document in addition to interest/freight cost of dispatch and rebooking of goods.”
Further as per the Supreme Court’s latest interpretation of Section 138 of the Negotiable Instrument Act. 1861 “bouncing of cheques reserve the right of other legal remedies both civil and criminal, it being an offence to the drawee”.
In view of above, you are hereby requested to send us Demand draft for Rs XYZ plus against RS ABC bank charges plus interest @ 2% per month on such amount for delayed payment.
In case you have already send the said payment then please ignore this letter otherwise treat this as a legal notice under section 138 of Negotiable Instrument Act."
Please note the expiry date is 6 month only from the date of issue.
From India, Delhi
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