Legal Question in Banking Law in India

sec 138 pdc issued for loan amount, part payment affected in the year,holder dem

a loan was taken for 3 lacs, and a post dated cheque from my personal savings bank account was issued one year hence.in the year,part payments were made by cheques by my wife and father.the lender got the cheque bounced and sent notice for 3 lacs. on non payment,case under sec 138 was registered.facing trial at present. gaurenter (father)for the loan has also been charged with sec 138(!!)/sec 420 and sec192.

no civil suit has been filed either against me or the guaranter

guarentor says he will pay but he was never asked by the lender,and does not know the exact amount,and neither has the lender called in his debt from me.he is insisting on full 3 lacs with interst,and continuing the criminal charges till we accede to his demands.

both of us are on bail,and position has come for trial.father is applying revision petition under sec 492(?),

what do you suggest we do, can we file for false prosecution once trial is over,what is the provisions in law for our protection?


Asked on 3/05/05, 1:33 am

2 Answers from Attorneys
Sudhakar Joshi NACHIKETA ASSOCIATES

Re: sec 138 pdc issued for loan amount, part payment affected in the year,holder

Dear Sir,

It seems that the other person is in a mood to harass you...if u have made part payment, not sure to what extend, then in that case, claim cannot b of 3 lakhs...

u can always file a petition in high court for quashing and setting aside the complaint itself if the complaint is bogus and illegal...

for further assistance u can contact us....

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Answered on 3/06/05, 7:26 am
Adv.Ranjith Xavier Ranjith Law Chambers

Re: sec 138 pdc issued for loan amount, part payment affected in the year,holder

From your question, we understand that, you, your wife and your father issued separate cheques from their own accounts to the financiers.

It has been recently held by the High Court of Kerala that, on dishonour of the cheque issued by a guarantor, a complaint under Sec.138 is maintainable against him/her. Consult with your lawyer about the prevailing rulings (of the High Court in your state) in this regard.

A civil case is not a prerequisite or requirement for instituting an action under Sec 138.

Regarding action under 420, the financier need to prove that you (father/wife) issued the cheque to them making them believe that, the said cheque will be honoured on presentation and believing such an assurance, they granted you the loan. They also need to prove that, at the TIME OF ISSUANCE of the cheque, you had no intention of honouring it.

Whether charges under Section 138 of Negotiable Instruments Act and Section 420 of IPC will be attracted TOGETHER in your case can be ascertained only after perusing the complaint filed by them. In many cases, we have found that both of them cannot stand together, since, the pleadings needed for these offences have the effect of cancelling each other.

Section 192 Cr.P.C is only a procedural provision.

The offence under Section 138 is a serious one. There are legal presumptions in favour of the holder of cheque(in your case, the financier)If you cannot setup a good line of defence, in your better interest, we advise you to settle the matter expeditiously.

Discuss the case with your lawyer in detail. Also discuss the matter with another competent lawyer immediately (for this, furnish him the copies of the legal notice, reply notice, complaint etc. for his verification).

Feel free to contact us with details, in case of need.

All the best...

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Answered on 3/06/05, 1:04 am


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