AI Overview...
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Same Bank Cheque for Loan Recovery - The sources do not explicitly confirm that cheques kept by the same bank as the borrower's account are used for recovery. However, in typical banking practice, cheques issued from the same bank account are often used as a mode of repayment or recovery, provided proper authorization and documentation exist. No direct reference in provided sources
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Misuse of Cheque for Recovery - Several sources highlight issues related to misuse or improper handling of cheques:
- Dishonoured Cheques & Legal Implications: Cheques issued for time-barred debts or without proper consideration are often dishonoured, leading to legal proceedings (e.g., sources Narsi Dass VS Surender - Punjab and Haryana, Virupaxagouda VS Basavaraj @ Basavanneppa - Karnataka, Dilipkumar Nalinkant Gandhi VS State of Gujarat - Gujarat).
- Use of Blank Cheques: Courts have noted that blank cheques, especially signed ones, can be misused for recovery or other purposes, raising concerns about their security and proper use (Hansa Electricals VS D. N. Wadhwa (Deceased) Through LR’s - Delhi, Dilipkumar Nalinkant Gandhi VS State of Gujarat - Gujarat).
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Unauthorized Withdrawal & Dereliction: Cases involving bank officials misusing their position to facilitate unauthorized transactions, including foreign cheque purchases and withdrawals, demonstrate the potential for misuse (G. S. Subbaraman VS Indian Bank Rep. by its Executive Director/Appellate Authority Corporate Office, Royapettah, Chennai - Madras).
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Legal Framework & Presumptions:
- Under the Negotiable Instruments Act, 1881, Sections 138 and 139, and the Income Tax Act, 1961, Sections 269SS and 27ID, the law presumes that cheques are issued for valid debts, but dishonour and misuse can lead to criminal liability.
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Proper procedures, such as presenting cheques for clearance and ensuring they are supported by valid transactions, are essential to prevent misuse (Krishna P. Morajkar VS Joe Ferrao - Dishonour Of Cheque, Krishna P. Morajkar VS Joe Ferrao - Dishonour Of Cheque, Narsi Dass VS Surender - Punjab and Haryana).
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Account Books & Cheque Usage:
- Account entries (bahi entries) are not considered instruments of loan advancement; proper negotiable instruments like promissory notes or bonds are required for enforceability (Balbir Singh VS Raj Krishan - Punjab and Haryana).
- The nature of the transaction (loan or otherwise) determines whether a cheque can be considered valid for discharge of liability (Buldana Urban Co-op. Credit Society Ltd. VS Pyaru Saimulla Sheikh - Bombay).
Analysis and Conclusion: While cheques issued from the same bank account can be used for recovery of loans, their misuse—such as issuing blank cheques, dishonouring them, or using them without proper consideration—raises legal concerns. Proper documentation, adherence to legal procedures, and safeguards against misuse are critical to ensure cheques serve their intended purpose lawfully. Courts have emphasized that account books alone are insufficient as instruments of loan repayment; formal negotiable instruments are necessary.
Search Results for "Cheque Kept by the same Bank in which his Loan Account and Misuse of these Cheque for Recovery"
2014 0 Supreme(P&H) 1443 • India - Punjab and Haryana
MEHINDER SINGH SULLAR
Therefore, such Bahi entries cannot and indeed should not be taken to be account book regularly kept in the course of business, as ... for advancing agricultural loans, and the implications of issuing a cheque for a time-barred debt. ... In case a cheque is issued for time barred debt and it is dishonoured, then, it cannot be termed to have been issued, in lieu of ... On the other hand, accused has taken a plea that the cheque in question was a blank cheque, not supported by any consid....
2013 0 Supreme(Del) 1549 • India - Delhi
RAJIV SAHAI ENDLAW
Finding of the Court: The court found that the appellants' version of the cheque being issued for a friendly loan was ... Negotiable Instruments Act - Recovery of Amount - Section 118, Indian Evidence Act, 1872 - Section 92 - [RECOVERY OF AMOUNT] - ... Issues: Dispute over the nature of the amount claimed, validity of the cheque, and the appellants' financial position and ... due on that account. ... The counsel for the deceased respondent / plaintiff has contended that all the #HL_....
2019 0 Supreme(Mad) 2400 • India - Madras
SUBRAMONIUM PRASAD
the Constitution of India - 19.09.1994 - 04.08.2012 - 2529:99:VC - Swiss Bank Cheque Scandal Fact of the Case: The ... Finding of the Court: The court found the petitioner guilty of serious dereliction of duty, misuse of position, and ... petitioner, a Chief Manager at Indian Bank, was charged with unauthorized purchase of foreign cheques, allowing withdrawal of funds ... When the cheque was drawn on a closed account, the cheque had no realizable ....
• India - Dishonour Of Cheque
R.C.CHAVAN
139—Criminal Procedure Code, 1973—Section 378—Dishonour of cheque—Acquittal—Dishonour ... (emphasis supplied), ... A plain reading of Section 269SS shows that no person can accept any loan or deposit of a sum of Rs.20,000 or more otherwise than by an account payee cheque or account payee bank draft. ... otherwise than by an account payee cheque or account payee bank draft if: ... (a) the amount of such #HL_STAR....
• India - Dishonour Of Cheque
R.C.CHAVAN
138—Income Tax Act, 1961—Sections 269SS and 27ID—Dishonour of cheque—Recovery ... a person signs a cheque and delivers it, even if it is a blank cheque or a post dated cheque, presumptions under Section 118(b) ... (emphasis supplied), ... A plain reading of Section 269 SS shows that no person can accept any loan or deposit of a sum of Rs.20,000 or more otherwise than by an account payee cheque or account payee bank#HL_END....
2019 0 Supreme(Kar) 1017 • India - Karnataka
BELLUNKE A.S.
The cheque was dishonored, and the accused was acquitted by the trial court. ... Act] - [Section 138] Fact of the Case: The complainant advanced a sum of Rs.1,50,000 to the accused, who issued a cheque ... The court also noted discrepancies in the complainant's version and lack of evidence to substantiate the loan amount. ... But, has to be presented the cheque to the bank and should be deposited to credit the amount in the account of a person in whose name the cheque#HL_END....
2013 0 Supreme(Bom) 1336 • India - Bombay
R.C.CHAVAN
Negotiable Instruments Act, 1881 - Sections 138 and 139 - Liability for dishonour of cheque ... ... A plain reading of Section 269SS shows that no person can accept any loan or deposit of a sum of Rs.20,000/- or more otherwise than by an account payee cheque or account payee bank draft. ... otherwise than by an account payee cheque or account payee bank draft if,– ... (a) the amount of such loan ....
2015 0 Supreme(P&H) 236 • India - Punjab and Haryana
PARAMJEET SINGH
Dishonour of Cheque--Loan entry in Account books—Account books/bahi entries are not the instruments of advancement of loan which ... books--Dishonour of Cheque--Held; that account books/bahi entries are not the instruments of advancement of loan like pronote, bonds ... ... (A) Negotiable Instruments Act, 1881, S.138--Loan entry in Account ... He also proved the account statement as Ex.P- 10 and r....
2018 0 Supreme(Bom) 1240 • India - Bombay
MANISH PITALE
in warehouse of appellant - According to appellant there was still an amount of - Outstanding on said loan account against respondent ... was duly disbursed which was prior to date of cheques - Once loan was disbursed and installments have fallen due on date of cheque ... are of view that question whether a post - Cheque is for discharge of debt or liability depends on nature of transaction - If on ... If the case of the respondent was that the disputed cheque was dep....
2015 0 Supreme(Guj) 2373 • India - Gujarat
HARSHA DEVANI
Code of Criminal Procedure, 1973 - Section 378(4) - Negotiable Instruments Act - Section 138 - Offence of Dishonour of Cheque ... Act, come to the conclusion that the cheque which was issued on 29.03.1995 was presented on 08.01.1998 and was, therefore, beyond ... He has, inter alia, deposed that at the time of opening the account of the accused No.1, a blank cheque signed by the account holder was taken. The cheque given by the account holder was bearing No.131106. ......
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