Financial matter

Question

► I am seeking legal guidance regarding a financial dispute that has arisen from a poultry farming partnership formed in June. I contributed ₹5 lakhs in cash towards the business, while my partner provided the poultry shed and handled some minor expenses. Before commencing operations, he handed over two undated security cheques of ₹4 lakhs each as a safeguard. After the sale of chickens in mid-July, my partner received the full proceeds from the buyer, but since then, he has stopped responding to my calls and has failed to return any portion of my investment. Despite repeated requests over the past three months, he has avoided all communication, and during personal visits, his family claims he is out of town. Unfortunately, I do not have any written documentation of my cash investment; my only supporting evidence is a series of recorded phone conversations where I repeatedly ask for repayment. I am now considering depositing the security cheques, but I suspect he may have issued them with the intention of defaulting, possibly to complicate any legal action. Given these facts, I want to understand whether I should proceed with depositing the cheques, and if they bounce, what legal remedies would be available under current laws. I also wish to know the strength of my case based solely on call recordings and how long a legal resolution might typically take in such matters.

Answer 1

Please deposit the cheques..Take print outs of the conversation made with the cheque issuer and gather additional information whatever possible about him. Issue Legal Notice of Demand of the cheques are dishonored which should be concise and precise with all details and averments. File the criminal complaint under sec 138 of NI ACT through good lawyer having sound knowledge of the cheque cases. You have good chances of success as the issuance of cheque itself denotes some legal liability to pay but case should be handled well. After all there doesn't seem proper and another option for you at this stage. Civil suit will require elaborate evidence to succeed. Thanks and regards.

Answer 2

Dear Sir, It seems you have no sufficient documents of having invested so much of amount. Anyhow you may initiate litigation or take appropriate defence whenever any case is filed.

Answer 3

You can deposit cheque and can proceed under section 138 Negotiable instrument Act. You can also file recovery suit on the basis of cheque claiming cheque amount.

Answer 4

From the information that has been provided it is quite evident that the evidence available makes it difficult to successfully recover the cash investment unless and until there is evidence for partnership and the quantum of cash investment made into the business. Therefore, what you can do is deposit the cheque to attempt recovery of the investment. Further, if the cheque bounces you can simply initiate proceedings under section 136 of Negotiable instruments act to recover the money that was lawfully due through the cheques. The proceedings should start within 30 days from the date of cheque bounce and the action is initiated through a legal notice to cheque issuer. Kindly contact an advocate to initiate the proceedings.

Financial matter

4 Answers