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Security Cheque and Payment Status - The opponent issued a cheque of Rs. 1 lakh as security, with an understanding that part of the amount (Rs. 30,000) had been paid, leaving Rs. 70,000 outstanding. The cheque of Rs. 1 lakh was issued in respect of the security deposit for a loan or agreement, not as a direct payment of the remaining amount. To deposit this cheque in bank, one must ensure it is properly endorsed (if required) and presented for clearance, understanding that if the cheque bounces due to insufficient funds, legal action under Section 138 of the Negotiable Instruments Act can be initiated ["Kuthar Ahmed Bava VS S. K. District Co-Operative Fish Marketing Federation Ltd. - Dishonour Of Cheque"], ["Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213"].
Legal Implications of the Cheque - If the cheque is dishonoured, the holder can file a criminal case under Section 138, provided the cheque was issued for a debt or liability. Since the cheque was given as security, it may require clarification whether it can be encashed as a payment or only as security. The case law suggests that cheques given as security may not be directly encashable unless they are invoked as a payment instrument, and the actual liability must be established ["Kuthar Ahmed Bava VS S. K. District Co-Operative Fish Marketing Federation Ltd. - Dishonour Of Cheque"].
Depositing the Cheque - To deposit the Rs. 1 lakh cheque, visit your bank branch with the cheque, endorse it if necessary, and submit it for clearance. If the cheque is dishonoured due to insufficient funds, you may initiate legal proceedings for recovery or cheque bounce under applicable laws. Ensure the cheque is presented within the validity period (usually 3 months from the date) ["Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213"].
Additional Points - If part of the amount has been paid (Rs. 30,000), and the cheque was issued as security, it is advisable to verify whether the cheque can be encashed or if it is solely a security deposit. In case of disputes, legal advice should be sought to determine whether the cheque can be presented for recovery or if it only serves as a security instrument ["Kuthar Ahmed Bava VS S. K. District Co-Operative Fish Marketing Federation Ltd. - Dishonour Of Cheque"].
References:- ["Kuthar Ahmed Bava VS S. K. District Co-Operative Fish Marketing Federation Ltd. - Dishonour Of Cheque"]- ["Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213"]
Imagine this: You've received a Rs. 1 lakh cheque as security from a debtor. They've since paid Rs. 30,000, leaving a balance of Rs. 70,000. Now, you're wondering, the opponent has given cheque of rs. 1 lakh as security thereafter he has paid rs. 30,000 amount remains 70,000/- I have cheque of rs 1 lakh how to deposit in bank. This is a common scenario for creditors in India, governed by the Negotiable Instruments Act, 1881 (NI Act).
In this comprehensive guide, we'll break down whether you can deposit the full cheque amount, the legal principles involved, step-by-step procedures, and what to do if it's dishonoured again. Remember, this is general information based on legal precedents—not personalized legal advice. Always consult a lawyer for your specific case.
Cheques given as security are valid negotiable instruments under the NI Act. Even after partial payments, the cheque doesn't automatically become invalid. Courts have consistently held that partial payments do not restrict the holder's right to present the cheque for the full amount, provided it's within validity (typically six months from issue) Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213.
For instance, legal documents emphasize: When a cheque is issued as security or for a specific purpose, and part of the amount is paid, the remaining balance can still be deposited in the bank, provided the cheque is valid and within the period of its validity Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213Vinod VS Shri Sunil - 2023 0 Supreme(Bom) 2214. This aligns with cases where post-dated security cheques were scrutinized, but where a debt existed (as here, evidenced by partial payment), the cheque remains enforceable Jitendra Singh Flora VS Ravikant Talwar.
In contrast, if no underlying debt exists—like in construction agreements where cheques were purely conditional without liability—the prosecution under Section 138 may fail Jitendra Singh Flora VS Ravikant TalwarJitendra Singh Flora VS Ravikant Talwar. But your situation shows an acknowledged debt via the Rs. 30,000 payment, strengthening your position.
Yes, generally, you can deposit the full Rs. 1 lakh cheque despite the Rs. 30,000 payment. The law permits this because:
Key principle: The law recognizes that a cheque may be presented multiple times, especially if the initial presentation is dishonoured, and subsequent deposits are permissible Kamlesh Kumar VS State of Bihar - 2013 8 Supreme 777. If the drawer has credited funds post-partial payment, the bank may honour it up to available balance.
From precedents: The bank’s return of the cheque for insufficient funds does not prevent subsequent deposit attempts, especially if circumstances change (e.g., partial payments or additional funds being credited) Kamlesh Kumar VS State of Bihar - 2013 8 Supreme 777Vinod VS Shri Sunil - 2023 0 Supreme(Bom) 2214.
Other cases reinforce cheque handling post-payments. For example, in disputes involving advances and returned cheques, courts focus on underlying liability rather than partial adjustments alone ANANT RAJ AGENCIES VS INDCRJIT AND BROTHCRS - 1996 Supreme(Del) 659. Similarly, in consumer matters with partial refunds via cheques, the full instrument's validity persists unless settled Shalimar Estates (Pvt. ) Ltd. VS Sushil Siwach.
Follow these steps to deposit safely:
The legal process for depositing a cheque involves presenting it to the bank, which then returns it unpaid if insufficient funds or other reasons occur. The depositor can present the same cheque again if the circumstances permit Kamlesh Kumar VS State of Bihar - 2013 8 Supreme 777Vinod VS Shri Sunil - 2023 0 Supreme(Bom) 2214.
Dishonour triggers Section 138 NI Act, a criminal offence if:- Cheque presented within validity.- Drawer fails to pay within 15 days of notice.
You can file a complaint in the Magistrate's court within 30 days of notice expiry Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213Balabhau Haribhau Kavanpure VS Sai Auto Agencies - 2023 0 Supreme(Bom) 2210. Courts uphold this even post-partial payments, as the offence completes on dishonour and non-payment Bir Singh VS Mukesh Kumar - 2019 3 Supreme 129.
Related rulings show nuance: In security cheque cases without debt, discharge is possible Jitendra Singh Flora VS Ravikant Talwar, but here partial payment proves liability. Also, in fine suspensions post-conviction, courts stress valid reasons—not lightly suspending obligations Bay Leathers Exports Private Limited VS Saileela - 1998 Supreme(Mad) 300Bay Leathers Exports Pvt. Ltd. VS Saileela.
Always note: Keep records of partial payments and any bank notices or returns Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213.
Depositing a security cheque after partial payment is typically permissible under the NI Act, empowering cheque holders to recover dues efficiently. By following procedures and leveraging precedents like multiple presentations and validity post-payments, you protect your rights Balabhau Haribhau Kavanpure VS Sai Auto Agencies - 2023 0 Supreme(Bom) 2210Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213.
However, outcomes depend on specifics—consult a legal expert before acting. This guide draws from established principles to inform, not advise.
References: Uttamchand VS State of Maharashtra - 2023 0 Supreme(Bom) 2213Balabhau Haribhau Kavanpure VS Sai Auto Agencies - 2023 0 Supreme(Bom) 2210Kamlesh Kumar VS State of Bihar - 2013 8 Supreme 777Bir Singh VS Mukesh Kumar - 2019 3 Supreme 129Vinod VS Shri Sunil - 2023 0 Supreme(Bom) 2214Jitendra Singh Flora VS Ravikant TalwarJitendra Singh Flora VS Ravikant Talwar and others noted.
#ChequeBounce #NIAct #LegalIndia
Thereafter the non-applicant served a notice dated 18-5-1993 to the applicant under Section 138 of the Act which was received by the applicant on 19-5-1993. In the notice a demand of Rs. 1.00.000/- (Rupees One Lakh) was made by the non-applicant. ... 414175 dated 15-7-1992 and 414176 dated 30-8.-1992 for Rs. 60.000/- and 414177 dated 30-8- 1992 for Rs. 40.000/- of Punjab and Sind Bank. ... It is clear from a fair reading of clauses ....
Thereafter the non-applicant served a notice dated 18-5-1993 to the applicant under Section 138 of the Act which was received by the applicant on 19-5-1993. In the notice a demand of Rs. 1.00.000/- (Rupees One Lakh) was made by the non-applicant. ... dated 15-7-1992 and 414176 dated 30-8.-1992 for Rs. 60.000/- and 414177 dated 30-8- 1992 for Rs. 40.000/- of Punjab and Sind Bank. ... It is clear from a fair reading of clauses 5 and 6....
Complainant had also paid [RBT/CC/17/892] amount of Rs. 1, 51,000/- to opponent for parking area. Opponent agreed to deliver possession within a period of 2 years. ... Advocate also informed that the complainant has also paid for the allotment of parking space, Rs. 1, 51 ,000/-. ... Complainant made payment from time to time and total amount of Rs. 40, 09, 414 /- (Rs.Forty Lakh Nine thousand Four ....
amount of Rs. 2 lakh claimant has misused the cheque which was given as a security. ... P.7 and he issued cheque. Ex. P.1 for the amount of Rs. 46,956.70 which was the amount due as per Ex. ... It is relevant to note under Ex.P.7 dated 24.7.2002 the accused has given letter to the complainant stating that there is an amount due to the extent of Rs. 46.956.70 and....
In this case, neither reasons given for suspending sentence of fine, nor any condition imposed to furnish a suitable security for the sum of Rs. one lakh. ... On the same date, the respondent, the accused paid Rs. 5, 000/- being the fine amount and Rs. 5, 000/- towards compensation. The respondent filed a petition for extension of time for payment of the balance amount and the time was granted and sentence was suspended by the trial Court itself. .......
In this case, neither reasons given for suspending sentence of fine, nor any condition imposed to furnish a suitable security for the sum of Rs. one lakh. ... On the same date, the respondent the accused paid Rs. 5.000/- being the fine amount and Rs. 5.000/- towards compensation. The respondent filed a petition for extension of time for payment of the balance amount and the time was granted and sentence was suspended by the trial Court itself. ... Co....
He agreed to return the amount on or before 30/3/2009. In order to secure the interest of the complainant, he issued a cheque dtd. 30/3/2009 for Rs.95, 000.00, drawn on his account maintained with Amravati District Central Cooperative Bank, branch Haturna. ... It is further stated that on 18/12/2008, the accused came to the showroom to deposit Rs.1, 50, 000.00 and demanded the receipt. The complainant suggested him to depo....
The complainant thereafter issued a notice to the accused and called upon him to pay the cheque amount. The accused, as per the case of the complainant, neither paid the amount nor replied the notice. ... On demand of the accused, the complainant paid him Rs.1, 50, 000.00 (Rupees One lakh Fifty thousand only). The accused on the very same day issued him a cheque bearing No. 252747 dtd. 11/5/2004, drawn on his accou....
Cheque No. and Dated Cheque drawn on Amount 1 103199 dated 25.2.2013 HDFC Bank 30,00,000 2 103201 dated 7.3.2013 HDFC Bank 17,00,000 3 103091 dated 14.3.2013 HDFC Bank 10,00,000 Total: 48,00,000 ... The complainant has spent Rs. 3.80.000 for changes in the flat and this amount is required to be reimbursed from the opponent. (c) The opponent has neither given#HL_END....
The plaintiff at the request of defendant No. 1 advanced a sum of Rs. 60. 000. 00 to defendant No. 1 vide Cheque No, P 600956 dated 13/12/1985 drawn on State Bank of Patiala. Hauz Khas, New Delhi and the said cheque was duly encashed by the defendant No. 1. ... The defendant No. 1. however. issued a cheque bearing No. 994965 drawn on State Bank of Patiala dated 3. 1. 1986 purporting to return the ....
4. That being so, the entire principal amount of Rs. 23.30 lakh has been unconditionally paid to the respondent and, against the liability towards compensation / interest / cost, an amount of 25 lakh (-) 23.30 = Rs. 1.70 lakh has been unconditionally paid and an amount of 37.70 lakh (-) 25 lakh = Rs. 12.70 lakh has been paid against bank guarantee / indemnity bond.
Another surrt of Rs. 1, 51, 700 was also paid to OPs 1 to 3 individually and jointly. In this way, a total sum of Rs 12, 94, 700 was paid. All payments were made vide cheque except two of Rs. 1 lakh and Rs. 45, 000 respectively against which receipts were executed.
After going through the advertisement, he had placed an order for the photo machine "Fuji Frontier 375" for Rs. 69, 00, 000/- from OP-1. The complainant had paid Rs. 2 lakh towards advance and thereafter entire amount of Rs.66, 95, 000/- was paid. The OP issued the bill for payment of Rs. 66, 13, 360/- therefore, as per complainant, he paid excess amount of Rs.81, 640/- to the OP-1. The machine was delivered by the OPs on 25.6.2004 at Jodhpur.
In clause 15 of the said agreement Ext. 1 it is stipulated that if second party default in the payment of the monthly rent consecutively for a period of 2 months the first party shall be at liberty to terminate the tenancy by giving one month's notice in writing and on the expiry of the said period notice period the second can vacate and handover possession of the rented premises to the first party. I have also paid a sum of Rs. 1 lakh as security deposit to the first party. I have paid a sum of Rs. 40,500/- vide cheque No. 057428 dated 9.9.2002 on Central Bank of India, Sh....
(c) The remaining amount of Rs. 28 lakhs will be paid on or before 3-11-2008 at the time of registry. 4-7-2008, the plaintiffs has paid Rs. 1 lakh cash as well as they have also given one cheque of Rs. 1 lakh bearing No. 626668. The said cheque is post dated one and it will be encashed on 10-8-2008 at Vijaya Bank, Adalat Road, Aurangabad.
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