INTRODUCTION
Checks are utilized in practically all exchanges, for example, re-installment of advance, installment of compensation, charges, expenses, and so on. A greater part of checks are handled and cleared by banks on regular routine. Checks are given for the explanation of making sure about confirmation of installment. By the by, checks stay a solid technique for installment for some individuals. Then again, it is consistently prudent to give crossed “Record Payee Only” checks so as to maintain a strategic distance from its abuse.
A check is a negotiable instrument. Crossed and account payee checks are not debatable by any individual other than the payee. The checks must be saved into the payee’s ledger. Lawfully, the creator of the check is called ‘cabinet’, the individual in whose favor, the check is drawn is called ‘payee’, and the bank who is coordinated to pay the sum is known as ‘drawee’. In any case, instances of check bob are normal nowadays. Some of the time checks bearing enormous sums stay unpaid and are returned by the bank on which they are drawn.
IF A CHEQUE IS DISHONOURED
At the point when a check is disrespected, the drawee bank quickly gives a ‘Check Return Memo’ to the investor of the payee referencing the explanation behind non-installment. The payee’s investor at that point gives the shamed check and the reminder to the payee. The holder or payee can resubmit the check inside a quarter of a year of the date on it, on the off chance that he trusts it will be regarded the subsequent time. Be that as it may, on the off chance that the check backer neglects to make an installment, at that point the payee has the privilege to indict the cabinet legitimately. The payee may lawfully sue the defaulter/cabinet for shame of check just if the sum referenced in the check is towards release of an obligation or some other risk of the defaulter towards payee.
On the off chance that the check was given as a blessing, towards loaning an advance or for unlawful purposes, at that point the cabinet cannot be arraigned in such cases.
PUNISHMENT AND PENALTY
On getting the grievance, alongside a sworn statement and pertinent paper trail, the court will give summons and hear the issue. Whenever saw as liable, the defaulter can be rebuffed with money related punishment which might be double the measure of the check or detainment for a term which might be reached out to two years or both. The bank likewise has the privilege to stop the check book office and close the record for rehash offenses of ricocheted checks. On the off chance that the cabinet makes installment of the check sum inside 15 days from the date of receipt of the notification, at that point cabinet does not submit any offense. Something else, the payee may continue to record a grumbling in the court of the jurisdictional judge inside one month from the date of expiry of 15 days recommended in the notification.
CONCLUSION
The Negotiable Instruments Act, 1881 is applicable for the cases of dishonor of cheque. This Act has been corrected commonly since 1881. As per Section 138 of the Act, the shame of check is a criminal offense and is deserving of detainment as long as two years or with financial punishment or with both. On the off chance that payee chooses to continue legitimately, at that point the cabinet ought to be given an opportunity of reimbursing the check sum right away. Such a possibility must be given uniquely as notice recorded as a hard copy.
The payee needs to send the notification to the cabinet with 30 days from the date of accepting “Check Return Memo” from the bank. The notification should make reference to that the check sum must be paid to the payee inside 15 days from the date of receipt of the notification by the cabinet. On the off chance that the check backer neglects to make a new installment inside 30 days of accepting the notification, the payee has the privilege to document a criminal objection under Section 138 of the Negotiable Instruments Act.
Notwithstanding, the grievance ought to be enlisted in a justice’s court inside a month of the expiry of the notification time frame. It is fundamental for this situation to counsel a promoter who is knowledgeable and experienced around there of training to continue further in the issue. Lawfully, certain conditions must be satisfied so as to utilize the arrangements of Section 138. The check ought to have been drawn by the cabinet on a record kept up by him.
The check ought to have been returned or shamed as a result of inadequate assets in the cabinet’s record. The check is given towards release of an obligation or lawful risk. Subsequent to accepting the notification, if the cabinet does not make the installment inside 15 days from the day of getting the notification, at that point he submits an offense culpable under Section 138 of the Negotiable Instruments Act.
BIBLIOGRAPHY
- THAKUR, P.R. “DISHONOUR OF A CHEQUE—A DEEMED OFFENCE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT 1881 (AS AMENDED IN 1988).” Journal of the Indian Law Institute, vol. 33, no. 3, 1991, pp. 346–365. JSTOR, jstor.org/stable/43951372. Accessed 8 June 2020.
- Stuber, Walter Douglas, et al. “International Financial Services.” The International Lawyer, vol. 38, no. 2, 2004, pp. 185–213. JSTOR, www.jstor.org/stable/40707912. Accessed 8 June 2020.
- S. T. C. “Dishonor of Cheque. Damages.” The Modern Law Review, vol. 3, no. 3, 1940, pp. 237–238. JSTOR, www.jstor.org/stable/1090425. Accessed 8 June 2020.
- Sindhu, Sanjay. Journal of the Indian Law Institute, vol. 54, no. 4, 2012, pp. 570–572. JSTOR, www.jstor.org/stable/43953618. Accessed 8 June 2020.
- Desai, Satyajit A., and Anadha P. Shete. Journal of the Indian Law Institute, vol. 43, no. 3, 2001, pp. 426–428. JSTOR, www.jstor.org/stable/43951786. Accessed 8 June 2020.
- THAKUR, P.R. “DISHONOUR OF A CHEQUE—A DEEMED OFFENCE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT 1881 (AS AMENDED IN 1988).” Journal of the Indian Law Institute, vol. 33, no. 3, 1991, pp. 346–365. JSTOR, www.jstor.org/stable/43951372. Accessed 8 June 2020.
This Article is Authored by Carishma Bhargava, Second Year B.A.LL.B Student at O.P Jindal Global University.
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