Legal Question in Criminal Law in India

FIRM A, a pvt limited firm & a susidiary of a PUBLIC Limited Co., placed an order for supply and manufacture of goods to FIRM B.

FIRM B supplied as per the order..........

IN between, FIRM A started having financial and fund-flow problems....could NOT make the payments.

On regular follow-up with FIRM A........they issued PDCs worth 2cr to FIRM B, with the condition that these PDCs should not be presented to Bank without their authorization.

Now, these PDCs have matured and due, BUT FIRM A has meantime issued instructions to its bank for STOP PAYMENT.

1. In such scenario, if FIRM B presents the PDCs and the same are NOT honored, will it amount to invoking section 138 of NIA.

2. .Does their communication NOT to present the PDCs without their authorisation give them UNDUE benefit / immunity from having committed a criminal offence u/s 138 of the NIA? or let me put it another way....does this weaken the case for FIRM B?


Asked on 2/01/12, 3:23 am

4 Answers from Attorneys

That as per law, the authorisation of presentation of cheque is necessary but if the date due is passed then you may give notice u/s 138 of negotiable instrument Act and you also have a right to file a civil suit of recovery

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Answered on 2/01/12, 3:50 am
Aniruddha Pawse Aniruddha.P.Pawse Advocates

you can still issue notice and proceed with Sec 138 NI Act.

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Answered on 2/02/12, 1:07 am
Sanjay Kalra Sanjay Kalra & Associates

No home work on this site.

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Answered on 2/06/12, 4:44 am
Shrichand Nahar S.V.Nahar, Advocate

Unless a cheque is issued towards discharge of legally enforceable debt or liability, provisions of 138 NI are attracted.

In this case cheque is issued and accepted with a condition. The condition is not fulfilled.

Therefore, 138 NI may be weak.

However, a civil suit for recovery of dues may be filed. In case period of limitation is about to expire, then such suit must be filed before expiry of limitation.

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Answered on 6/08/12, 12:27 am


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