Legal Question in Criminal Law in India

Sec 138 Non negotiable Instrument Act
Sir,
I am a system admin and to my surprise, my company admin told us that scanning cheques and sending it to vendor for confirmation of order is a crime under section 138 Non Negotiable Instruments Act. Please advice whether this really comes under sec 138 or any other laws in India. In US Banks always scan cheques and they send it to other banks for collection of funds.Please advice whether Admin is playing foul game with the company.

Asked on 2/28/07, 1:09 pm

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Re: Sec 138 Non negotiable Instrument Act

As such it is not a crime.As per Negotiable Act the bank has to pay the ordered ammount mentioned on cheque if other particulars are ok like signature etc.There is no reason to seek confirmation of vendor.

Answered on 2/28/07, 11:28 pm

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Shrichand Nahar S.V.Nahar, Advocate

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Re: Sec 138 Non negotiable Instrument Act

Section 138 NI Act defines an offence related to dishonour of a cheque. Normally, signatory of the dishonoured cheque or in case of a company or firm, persons responsible for day to day affairs are liable for prosecution. Please specify in which of the above category you fall.

Answered on 3/01/07, 4:32 am

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