Legal Question in Banking Law in India

bouncing of blank cheque in possession of payee
Two blank cheques were demanded by the payee as a trade practice and the accused gave two signed blank cheques to the complainant company which filled these cheques on there own by endorsement and filling up the amount in words as well as figuers themselves and presented the cheque which was returned as stopped payment by the drawer. The accused had informed the company not to present these cheques along with copy of stop payment instruction letter to bank. This instruction letter was given 25 days before the presentation of cheque and the complanent company was in the full know of the fact that this will be returned unpaid.

Asked on 7/18/06, 4:24 am

2 Answers from Attorneys

Navin Kumar Naashree Associates, Advocates

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Re: bouncing of blank cheque in possession of payee

It is presumed under the laws that the cheques in question, were issued in discharge of legal dues.A 'stop payment instruction' does not save you from prosecution. The issue has been settled by Supreme Court in Modi Rubber's Case. The onus of proof lies on the issuer of the cheque to prove the contrary.

Note: The above advice is based on the facts and circumtances mentioned above and as per the Indian laws.It is also advised that one should always consult an attorney giving out all the relevant details.

Navin Kumar

Partner, Nashree Associates, Advocates

Litigation cell: 6, Babar Lane, Ist Floor, Bengali Market, New Delhi-110001.

Email:[email protected]

Answered on 7/18/06, 7:49 am

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