LegalCrystal – Blog

BANK CHEQUES TO BOUNCE INTO HISTORY?

[News you can use]

British Bank yet to decide whether to halt use of cheques by 2018!!!!!

British Banks are drawing up plans to stop accepting cheques and instead demand payment by plastic or electronic transfer.

Consumer groups and businesses have attacked the proposals, raising the prospect of a œSave the cheque campaign to protect a 300 year old method of payment.

Although the number of cheques written each day has fallen by nearly two-thirds in the past 20 years, to 3.8m a day, many small traders and older people still rely on cheque books to pay bills. The Payments Council, a panel drawn from the big banks, will vote on December 16 on whether to abolish the cheque. It has prepared for this for two years, already announcing that cheque guarantee cards will be axed in June 2011.

A source close to the panel said œA lot of work has gone into getting ready to do this for 2018 and its pretty certain to go through. The only thing that might delay this is politics. After all, you may have noticed bankers are not exactly popular at the moment.

An announcement confirming the move is expected in January. It would save the banks hundreds of millions of pounds. Cheques cost up to $1 to process-four times as much as electronic payments. Paul Smee, chief executive of the Payments Council, said it had already talked with interested parties about the plan.We will have to show that no one will lose out,. œSo far no group consulted has said 2018 is not feasible. Mapping out how UK might move from a society where cheques are employed for almost 1 in 25 payments to one where there is no need to use a cheque is no small task. One plan is for a town to be picked as UK’s first œcheque-free zone, to test the impact. Chip and Pin card-security systems were piloted in Northampton before becoming mandatory in February 2006[Sunday times London]

1. What is your take on the above subject especially if it is applied to India and other countries globally?
2. How long it may take to implement?
3. How long would it take for the population to adjust to this culture?
4. How far would the people of India & other nations welcome such a new approach?
5. Just imagine the challenge before the Government to make people aware and equip them for new challenges kindly comment.

Dear Readers,

CHEQUE GOT BOUNCED/DISHONOURED?

ACT IMMEDIATELY!

ITS A CRIMINAL OFFENCE COMMITTED BY THE DRAWER OF THE CHEQUE!

Once you get confirmed that you will not realise/receive the money from the Drawer you can proceed with legal proceedings initiating a criminal proceedings against the Drawer.

Pre-requisites to file a Complaint:

1. There should be a Cheque issued in discharge of an enforceable debt or liability.

2. The Cheque should have been presented to the Bank within six months from the date on which it is drawn.

3. The Cheque should have been returned unpaid (DISHONOURED) for insufficiency of funds or due to the Cheque Amount exceeding the amount arranged to be paid to the Account with the Bank or as per the stop payment instructions issued by the drawer to the Bank.

4. A Demand should have been made for the payment of the amount of the Cheque by a written notice to the drawer within thirty days from the receipt of information by the payee or holder in due course from the Bank regarding the unpaid Cheque.

5. The drawer of the cheque should have failed to make the payment of the money to the payee or the holder in due course within fifteen days of the receipt of the notice demanding payment.

Section 138 of Negotiable INstruments Act says :

Where any Cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeding the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an Offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to

Two years or with fine which may extend to Twice the amount of the cheque or with both.

The Provisions were incorporated by Legislature with a view to encourage the culture of use of Cheque’s and enhancing the credibility of the Instrument.

TIME FRAME PRESCRIBED TO FILE A COMPLAINT U/S 138 N.I.ACT:

1. The period for sending notice demanding payment is to be reckoned from the date of receipt of Intimation of Dishonour on the last presentation of the Cheque to the Bank i.e.- within 30 days from the date of receipt of Intimation of dishonour from the bank.

2. The payee or the holder in due course who issued a notice, on the failure of the drawer to make payment has to wait for fifteen days from the date of receipt of notice by the drawer. If Cheque amount is not paid within this period – On the 16th day, the right to file Complaint arises for the Complainant, but within one month from the said 16th day complaint has to be filed.

OTHER USEFUL TIPS to A HOLDER OF DISHONOURED CHEQUE:

1. It shall be presumed that holder of Cheque received it for discharge ofdebt/liability unless the contrary is proved. – Section 139 of N.I.Act

2. It shall not be defence in the Offence that drawer had no reason to believe when he issued the Cheque that it may be dishonoured – Section 140 – N.I. Act.

3. If person committing Offence u/s 138 is Company, every person who at the time when the Offence was committed was in charge of/responsible for conduct of business as well as the Company shall be deemed to be guilty of Offence and shall be punished accordingly.

- Section 141 – N.I. Act

The Complaint cannot be quashed on the ground that the accused persons at the time of offence were not in charge of or responsible to the Company for its conduct.

4. When a notice is returned by the sender as unclaimed such date would be the commencing date in reckoning the period of 15 days.

5. An Offence in terms of Section 138 of the Act is committed even if the cheque is returned on the ground of closure of Account.

6. There is no restriction regarding the number of times a Cheque can be presented and that every subsequent representation and dishonour gives rise to fresh cause of action for filing Complaint.

7. No Court shall take cognizance (take into account/register) u/s 138 except on written Complaint made by Payee or holder in due course, such Complaint is to be made within prescribed time to a Metropolitan Magistrate or judicial Magistrate of First Class – Section 142 – N.I.Act

For any further details feel free to contact us.

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