Legal Question in Banking Law in India

Cheque bounce case - NI Act 138

My past employer ows me about 7,46,000 by way of arrears of salary. For Rs.3,00,000/- he had arranged a loan with abank with corporate guarantee. He later gave me a cheque for the same amount in my name and asked for a pdc in favour of the bank for a similar amount saying that this was the way the bank would like to receive payment towards the outstanding loan in my name. I did not issue the pdc fearing that this may be a ploy. My employer did not ask for the cheque to be returned to him because I did not issue pdc as demanded by him. As feared by me his cheque bounced on presentation.

Now my employer says that he need not pay me because I did not issue a pdc as agreed. He also says that I resigned without giving 60 day notice as per original offer letter. However, I had given a resignation letter with his acknowledgement.

a) Will my case under section 138 succeed?

b) Since he has defaulted in paying full salaries to me for nearly 6 years, is not the employment agreement null and void? And so I am not bound to give 60 day notice?


Asked on 4/20/07, 2:12 pm

4 Answers from Attorneys
J. Radhakrishnan independent Practice

Re: Cheque bounce case - NI Act 138

It is advisable for you to consult a lawyer in your place, giving him all details of the case and proceed as per his advice.

The details given by you are not clear to evoke any decisive answer from this forum. It appears that the loan from Bank has been taken by you though arranged by your employer. The cheque for Rs.3,00,000/- given by your employer can be treated as in part payment of the arrears of salary. It has no connection with his requiring you to give pdc in favour of the Bank in repayment of the loan taken in your name from the Bank. In such circumstance it is possible for you to proceed against your employer under Sec.138 of the N.I.Act. That apart, if there is default in the payment of salary, your employer cannot insist upon 60 days notice for resignation. If you fall in the category of 'workman' you can also sue your employer in the Labour court as also before the competent authority under the Payment of Wages Act. In any case, it is advisable to seek the guidance of a local lawyer and sort out the matter and not seek a wild cat solution from this forum.

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Answered on 4/20/07, 8:12 pm
Panduranga Acharya J & P Associates, Advocates & Solicitors

Re: Cheque bounce case - NI Act 138

Dear Sir,

cheque Bounse case will however succeed. but for your salary arrears please contact local advocate so that he will suggeset you the proper legal action, since you havenot stated as what you were working with your earlier company.

regards,

Pandurnaga Acharya

9886742609

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Answered on 4/21/07, 1:41 am
G. M. Gupta gmguptaandassociates

Re: Cheque bounce case - NI Act 138

though you can file a case under negotiable instruments act, i need to see all the terms and conditions of the agreement and the things ensued.

there are more chances that you will succeed

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Answered on 4/22/07, 1:11 pm

Re: Cheque bounce case - NI Act 138

As for as term of agreement is concerned, the agreement is required to be examined to render appropriate advise.In regard to cheque if the same is dishonoured for any reason then you can file complaint u/s.138 Negotiable Instrument Act and also a recovery case.For any other assistance you may cal on my mobile.

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Answered on 4/21/07, 12:14 pm


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