Cheque issued for security but second party filed cheque bounce case

937 votes

Since you have issued cheque to the debtor for the payment of your debt and the cheque bounced due to the fault of the debtor where the debtor failed to produce the cheque within six months from the date of issue, then the debtor is at fault and he cannot initiate a legal proceedings against you for recovery of the amount. But if the cheque bounced due to any other reason than the process of filing a cheque bounce legal proceeding starts by sending a legal notice. Once you receive the legal notice and fail to pay within 15 days of receiving the legal notice, the person may file a case under section 138 NI act against you and another case under section 420 of IPC. Simultaneously he can also file a civil suit for recovery of the money. In reply to the legal notice you can request the debtor to give you time to the payments.

Advocate Siddhant Sharma LawRato

579 votes

If they have filed any proceeding under N I Act ,, then you have to face the trial and contest the case. Keep it in mind in N I Act proceeding one will be liable and will be implicated if he orshe has issued any caheque to discharge his or her any legal , lawful debt. Unless it is proved that the cheque was issued to discharge debt and the cheque was bounced, no liability will arise and it is also to be a point that the cheque was issued the person to whom the drawer was liable. So, no need to be concerned right now. In the trial or evidence your liability will be determined.

Advocate Sudip Mukherjee LawRato

710 votes

To succeed in this case the 2nd party have to prove a 'legal-debt' payable by you. Purpose of borrowing money and capacity of borrower to provide loan is another parameter. There is no straight-jacket formula to overcome the situation, results may varies from case to case. Variation of circumstances of a cases may give different results. Details is required.

Advocate Aniket Joardar LawRato

969 votes

If you proof that, the Cheque is issued for Security Purpose. Then it is not hit under Section 138 NI Act as liability in your Side. Actually when a Cheque is issued the law presume that there is some liability for which you can issue the Chequ. But if you proof that, it is used only for the purpose of Security. Then it is a best defence for defend the Case of N I Act. Keep it up. you will win.

Advocate Sanjoy Acharjee LawRato