Cheque Dishonour PPt [Autosaved] (1).pptx

Cheque Dishonour PPt [Autosaved] (1).pptx

• 1.
  Presented By: RaminderSingh Asst. prof. in Law CT University
• 2.
  A Cheque issaid to be dishonoured If the bank refuses to pay the amount to the payee, against that cheque. E.G A (Payer) issued the cheque with amount of Rs 2,00,000/- to B (Payee) and the payee i.e.B has presented the same with his Bank (where he has maintained their Account) and the Drwaee bank has returned the same cheque to B wihtout making the payment with regard to any reason. It is to be known as cheque Dishonour. Whenever the cheque is dishonoured, the drawee bank instantly issues a ‘Cheque Return Memo’ to the payee specifying the reasons for dishonour. Dishonour of Cheque?
• 3.
   Some Common Reasonsfor Dishonour of cheque are;  Insufficiency of Funds in payer;s bank account.  Exceed the limit of overdraft.  Stop payments.  Account closed. Grounds
• 4.
    Signature Mismatchedor incomplete.  Cheque presented after its validity i.e. 3 Months.  Cheque itself is defective or overwritting. Cont..
• 5.
    Acc. toSec. 138 Dishonour of the Cheque is amounted to an Offence. By nature it is Quasi- Criminal offence and is Compoundable. Mean to say compromise can be taken place between the parties as regard to payment of the amount of cheque. Section 138 NI Act
• 6.
   1. Drawingof the cheque by Drawer to Drawee.  2. Cheque Shuold be drawn in Discharge of some Existing Debts or Liability.  In Somnath vs. Mukesh Kumar, 2015(4) Law Herald 3629 (P&H) it was held by Hon'ble High Court the complaint under Section 138 is not maintainable when the cheque in question had been issued qua a time barred debt.  3. Returning the cheque unpaid by the drawee bank,  4. Legal/Demand Notice in writing to the drawer for cheque amount.  5. Failure of the drawer to make payment within 15 days of the receipt of the notice. Steps to Constitute an offence under Sec. 138 of N I Act.
• 7.
   U/S 138 ofNI Act; A Dishonored Cheque is that if it is not credited by the Bank for following numerous reasons:  Cheque must be presented within 3 months from the date of its issuance.  Cheque must be returned unpaid due to insufficient funds  Stop payment on Cheque. Application of Sec. 138 NIAct
• 8.
    Exceed theoverdraft limit.  Account closed.  Signatrure Mismatched or Incomplete. Cont…
• 9.
    To whomYou will Apply the Complaint.  Himalaya Self Farming Group Vs. Goyal Feed Suppliers (Supreme Court of India) Supreme Court states that as per section 142(2)(a) of the Negotiable Instrument Act,  the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated, will have jurisdiction to try the offence, if the cheque is delivered for collection through an Account. Jurisdictions to file complaint
• 10.
    means offenceis not made out in the following cases according to Sec 138.  1. When cheque returned as defective one (Babulal vs. Khilji 1998 (3) Mh L.J. 762 )  2. When no notice is given to company and cheque is drawn by company ( P. Raja Rathinalm Vs. State of Maharashtra 1999 (1) Mh.L.J. 815)  3. Cheque is given as a gift.  4. Complainant was not a payee.  5. Signature of drawer on the cheque is incomplete. Sec. 138 is not applicable
• 11.
    Status ofpremature complaint In ‘Yogendra Pratap Singh v Savitri Pandey’, the Hon’ble Supreme Court held that no cause of action is said to have arisen until the period of 15 days elapsed. Therefore the Court is barred from taking cognizance of a complaint made before the expiry of 15 days. Successive presentation of cheques In ‘MSR Leathers v. S. Palaniappan’, it was observed that the payee can present a cheque many times for its encashment before the expiry of 3 months from the date on which it was drawn or within its validity, whichever is earlier. Some Important Judgments
• 12.
    Who canfile a complaint? Section 142 of the act mandates that the complaint must be filed by the payee or holder in due course of the cheque. Where a payee is a natural person he can file a complaint and when the payee is a firm or company or a juristic person, it must be represented by a natural person. [Sankar Finance and Investment v. State of A.P. & Others] Death of the complainant In ‘Chand Devi Daga & Ors. v. Manju K. Humatani & Ors’ it was held that the legal heirs of the complainant can move an application under Section 302 of CrPC. Cont..
• 13.
   Account Already Closed. In Rajan Singhal Vs. State of U.T. Chandigarh and Ors., 2015(4) RCR (Criminal) 809 (P&H) it was held by the Hon'ble High Court that when accused issues a cheque drawn on an account which is already closed, mala fide intention was clear in the case. Both offences of cheating under Section 420 IPC and Section 138 of NIT Act are made out and accused can prosecuted for both the offences. Cont..
• 14.
   Undated or Postdated Cheques  Many a times cheques are issued bearing no date or post dated cheques. Holder of cheque enters the date, and thereafter cheques are presented to banks. Hon'ble Bombay High Court in case of Purushottamdas Gandhi vs. Manohar Deshmukh 2007 (1) Mh.L.J. 210 has observed that inserting such date does not amount to tampering or alteration but by delivery of such undated cheque drawer authorizes holder to insert date. Period of 3 months for presentation of such cheque to the Bank would start from the date mentioned on cheque. Cont..
• 15.
    ‘‘143A. (1)recognize the provision of Interim Compensation, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant—  Upon framing of charge if the accused pleads not guilty.  (2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount of the cheque. THE NEGOTIABLE INSTRUMENTS (AMENDMENT) ACT, 2018
• 16.
    (3) Theinterim compensation shall be paid within sixty days from the date of the order under sub-section (1)  (4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, Cont..
• 17.
   A personconvicted for an offence under Section 138 of the Negotiable Instrument Act, 1881 shall be punished with imprisonment for a term which may extend to 2 years or with a fine which may extend to twice the amount of the cheque, or with both. The provisions from Section 138 to 142 were introduced with an object to increase the credibility of a cheque for easy settlement of liabilities. Though the Act is primarily a civil law to ensure smooth functioning of any transaction penal punishments were added. Punishment U/S 138
• 18.
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