A cheque is a widely used method of payment and post-dated cheques are frequently used in various transactions in business life.

 

Post-dated cheques are given to provide a certain accommodation to the drawer of the cheque. Therefore, it becomes necessary to ensure that the drawer of the cheque does not abuse the accommodation given to him.

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The Negotiable Instruments Act, 1881, deals with negotiable instruments, such as promissory notes, bills of exchange, cheques etc.

Chapter XVII containing Sections 138 to 142 was introduced with the aim of inculcating confidence in the efficacy of banking operations and giving credibility to negotiable instruments employed in business transactions.

 

If a party issues a cheque as a mode of deferred payment and the payee of the cheque accepts the same on the faith that he will get his payment on the due date, then he should not suffer on account of non-payment.

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The penal provisions contained in Sections 138 to 142 of the Act have been enacted to ensure that obligations undertaken by issuing cheques as a mode of deferred payment are honored. Section 138 of the Act provides for circumstances under which a case for the dishonor of cheques is filed.

 

The ingredients required for complying with Section 138 are as follows:

• a person must have drawn a cheque for payment of money to another for the discharge of any debt or other liability;

• that cheque has been presented to the bank within a period of three months;

• that cheque is returned by the bank unpaid, either because insufficient of funds or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;

• the payee makes a demand for the payment of the money by giving a notice in writing to the drawer within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

• The drawer fails to make payment to the payee within 15 days of the receipt of the notice.

 

Procedure that is followed in matters with regard to Section 138 of the Act is as follows:

1. A legal notice is to be issued to the drawer within 15 days of dishonor of cheque by registered post with all relevant facts. The drawer is given a time of 15 days to make the payment, if the payment is made then the matter is served and the issue is settled. On the other hand, if the payment is not made then the complainant is to file a criminal case process under Section 138 of the Act, against the drawer within 30 days from the date of expiry of 15 days specified the notice, with the concerned magistrate court within the jurisdiction.

2. The complainant or his authorized agent should appear in the witness box and provide relevant details for filing the case. If the court is satisfied and finds substance in the complainant, then a summons will be issued to the accused to appear before the Court.

3. If after being served with the summons the accused abstains himself from appearing then the court may issue a bailable warrant. Even after this if the drawer does not appear a non-bailable warrant may be issued.

4. On the appearance of the drawer/accused, he may furnish a bail bond to ensure his appearance during the trial. After which the plea of the accused is recorded. In case he pleads guilty, the court will post the matter for punishment. If the accused, denies the charges then he will be served with a copy of the complaint.

5. The Complainant may present his evidence by way of affidavit and produce all documents including the original in support of his complaint. The complainant will be cross-examined by the accused or his counsel.

6. The accused will be given an opportunity to lead his evidence. The accused will also be afforded an opportunity to submit his documents in support of his case, as well as witnesses in his support. The accused and his witnesses will be cross-examined by the complainant.

7. The last stage of the proceeding is that of the arguments after which the court will pass a judgment. If the accused is acquitted then the matter ends, but the complainant can go on further appeal in the High Court, similarly, if the accused is convicted he can file an appeal in the Sessions Court.

 

It must be noted that the offense under Section 138 of the Act, has been made compoundable.

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Further with respect to return of property which has been seized by police can be recovered by filing a Notice case, 

 

If you have failed to apply for a birth certificate within the limited time as per the Bith and Death Registration Act, then the same can be applied for, through Magistrate court Order for which we need to file a Notice case.