Legal Question in Banking Law in India

repeated dishonour of cheques

I am a businessman and I am facing a problem of regular dishonour of cheques from on of my debtor. The debtor has two Cash credit a/c with two seperate banks. He has issued cheques of one bank to me and has been reqularly dishonouring my cheques of the bank. I have a a/c with the same bank when I present the cheques for transfer or through clearing from another bank a/c the cheques are returned due to in sufficient funds whereas some other parties cheques are being passed regularly. i want to know whether I can proceed with legal proceedings against the bank under any act or RBI guidelines for passing cheques at the drawers choice of passing cheques.


Asked on 3/15/09, 11:43 am

3 Answers from Attorneys
J. Radhakrishnan independent Practice

Re: repeated dishonour of cheques

If the Bank on whom cheques are issued does not have sufficient funds in the account of the drawer or the cheque amount exceeding the arrangement your debtor has with that Bank, it has to return the cheques. The Bank does not choose on its own to honour some cheques and return some other cheques. It depends upon the funds/arrangement position and the order in which the cheques are received on the account. You cannot proceed against the Bank. Why accuse the arrow instead of the person who shoots. You take action against the borrower. That is all.

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Answered on 3/15/09, 12:03 pm
Pranav Desai PD Legal & Associates

Re: repeated dishonour of cheques

You cannot take action against the bank for dishonouring the cheques of your debtor for insufficiency of fund. I believe you should file a complaint against your debtor.

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Answered on 3/15/09, 2:13 pm
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: repeated dishonour of cheques

You may obtain information from the bank under RTI about the balance in the account.

What could possibly happen is : the drawer could be maintaining another account in the same bank and giving instructions for passing certain cheques by transfer of money from that account;

Prima facie, I do not find any case against the Bank since you may have a remedy to initiate civil and criminal proceedings against the drawer of cheque.

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Answered on 3/15/09, 8:26 pm


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