Legal Question in Criminal Law in India

case u/s 138 NI act agst both borrower and guarantor
a loan repayable in instalments through post dated cheques was disbursed on the guranantee deed and a post dated chque of half the loan amount from the guarantor also with the understanding that guarntee is for full amount whatever due, but cheque is given only for half the loan amount. After paying six out of tweleve instalments, the borrower did not pay the remaining 6 postdated cheques on their dates so two complainant u/s 138 were lodged against the borrower. afterwards when the date of the cheque of gurantor came neaner , a demand notice invoking guarantee was sent to gurantor informing that the cheque given by you will be encashed on its date and to avoid any further legal action, pay the remaining amout. no answer from guarntor side, so ch of guarntor was lodged that was dishonoured, so against G another case was lodged under section 138 NI Act.
It is well settled law that in civil cases actions against both the borrower and gurantor can be taken simultaneously. Whether there is any law that prohibits same in the criminal proceedings that two criminal proceedings can not be maintained against the both borrower and guarantor for the same loan.

Asked on 3/19/08, 9:38 am

5 Answers from Attorneys

Vivek Mapara Vivek N. Mapara

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Re: case u/s 138 NI act agst both borrower and guarantor

No sir, there is no prohibition

In your case, the cheque was issued for discharging the liability of principle debtor, on his failure. So when Principle Debtor failed to clear his liability, then the liability of guarantor imeeditely arosed under the contract, and hence the cheque can be said to have issued for discharge of debt and liability, and hence on dishonor complaint is absolutely maintainable.

However, guarantee deed, and all case papers are required to be perused, in case if any defence is to be raised. For that you need to contact in person, and internet advise will not help you that much.

Feel free to contact

Answered on 3/20/08, 4:36 am

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