2 Answers
Dear Client,
I understand your legal issue. Based on your legal query, I would suggest that the first step would be to gather all the evidence for repayment, which shows the cheque was only for security purposes, and urgently consult an advocate to help you with the cheque bounce case.
Hope this answers your questions
For further legal assistance, do not hesitate to contact us
OLQ LAW FIRM
Dear Client,
To establish a case under Section 138 of the Negotiable Instruments (NI) Act, 1881, it is necessary that there is an existence of a legally enforceable debt for which the dishonoured cheque has been issued. However, Indian courts have clarified the applicability of “security cheques” under Section 138, but they apply only under certain circumstances, namely when the debt that has been incurred exists at the time the cheque is being presented for payment. In case the amount owed has already been transferred to your friend’s account before the cheque was presented, the existence of a legally enforceable debt can be said to be discharged. Thus, we recommend that you do not forget to reply to the statutory notice received from your friend on time, that is, within 15 days and deny the existence of the debt and also mention the fact that the cheque was given only as security. You must keep all the bank statements showing that the repayment was appropriately credited to your friend’s account. This proof will be very important in order to counter the presumption of law laid down in Section 139 of the NI Act, which assumes that the cheque was issued for a valid debt. I hope this answer helps. If you have any further query kindly do not hesitate to contact us. Thank you