Legal Question in Business Law in India

Sec. 138 of Negotiable Instruments Act, INDIA
Can the payee of a cheque date the cheque himself/in his own handwriting before presenting it to the bank? Mr. X issued an undated cheque to an individual as an assurance that a personal loan will be repaid. The loan was repaid 100% - evidence for 70% of the loan repayment is available, rest repaid in cash. Payee said he had lost the cheque, hence cannot return the cheque. He was trusted. Now, after a period of 5 years since the cheque was written, he has presented the cheque after dating it himself. Meanwhile, account was closed at the bank about 4 years back. Can he do this? and will he succeed in court under Sec. 138? What are the remedies/defence avail. to Drawer under these circumstances? The Drawer has been in the UK since last over 4 years. It was not a business transaction, so no supporting documentation is available with the Payee for the large amt. cheque - Rs. 5 Lacs. The loan was taken in cash, no documentation, 70% returned through Bank transaction, 30% returned in cash. Payee is acting fraudulently. Can Mr. X defend Sec. 138 proceedings successfully? Kind Regards, Inder

Asked on 1/08/08, 12:45 pm

G. M. Gupta gmguptaandassociates

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Re: Sec. 138 of Negotiable Instruments Act, INDIA

though the cheque is complete proof of debt but u can have chances if you show that u dont owe any money or that he is cheating....

its advisable that u take consultation from any advocate in this regard

Answered on 1/12/08, 1:50 am

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