Legal Question in Banking Law in India

No corporate body or for that matter, no lender, businessman can issue a bearer cheque for amount exceeding Rs.20,000/- either by way of loan or payment of expenses in terms of Income tax Act to claim it as an allowable deduction or business expenditure. If the co-operative society had issued the bearer cheque for Rs.5 Lakhs, and somebody other than the intended borrower withdrew it, the Society cannot claim against the borrower and it is also liable for prosecution by the Income Tax Dept. and action also by the Registrar of Co-operative credit Societies, RBI.