Claim Only That Amount You Deserve In A Cheque To Have Valid Claim Under Section 138 Ni Act Honourable Supreme Court Read Judgement
In the realm of financial transactions, checks serve as a common instrument for transferring funds. However, issues arise when a check bounces due to insufficient funds or other reasons. To address such matters, laws like Section 138 of the Negotiable Instruments Act (NI Act) in India come into play. In a recent judgment, the Supreme Court clarified the importance of claiming only the rightful amount in such cases. Let's delve deeper into this judgment and understand the significance of claiming the correct amount to have a valid claim under Section 138 NI Act.
Understanding Section 138 NI Act: Section 138 of the Negotiable Instruments Act, 1881, deals with dishonor of checks due to insufficient funds or other reasons. It provides a legal recourse to the payee when a check issued to them bounces. To initiate legal action under Section 138, certain conditions must be met, including the presentation of the check within a specified period and the drawer's failure to make payment within the stipulated time.
The Importance of Claiming the Right Amount: The recent judgment by the Honourable Supreme Court emphasizes the significance of claiming only the amount due under the bounced check. In legal proceedings under Section 138 NI Act, it's crucial for the payee to accurately determine the outstanding amount owed to them. Claiming an amount higher than what is legitimately due could jeopardize the validity of the claim and result in legal complications.
Key Points from the Supreme Court's Judgment: In the recent judgment, the Supreme Court reiterated that claiming an amount higher than what is due under the bounced check renders the claim invalid under Section 138 NI Act. The Court emphasized that the payee must establish the existence of a legally enforceable debt corresponding to the amount claimed in the notice sent to the drawer of the check. Failure to adhere to this requirement could lead to the dismissal of the complaint filed under Section 138.
Clarification on Legal Principles: The Supreme Court clarified that while determining the amount due under a bounced check, interest or other charges cannot be included unless they are expressly stipulated in the agreement between the parties. Merely adding interest or penalty arbitrarily without legal basis would not suffice. The amount claimed must be strictly in accordance with the terms of the agreement or any legal provision applicable to the transaction.
Ensuring Compliance with Legal Requirements: To ensure compliance with the legal requirements under Section 138 NI Act, it's imperative for the payee to meticulously calculate the outstanding amount owed to them. This involves reviewing the terms of the underlying transaction, including any agreements or contracts governing the payment. Any additional charges, such as interest or penalties, must be properly documented and supported by relevant evidence.
Sending a Legal Notice: Once the correct amount due under the bounced check is determined, the payee must send a legal notice to the drawer demanding payment within the prescribed timeframe. The notice must accurately specify the amount claimed and provide the drawer with an opportunity to settle the debt. Failure to comply with the notice within the stipulated period empowers the payee to initiate legal proceedings under Section 138 NI Act.
Conclusion:
In conclusion, the recent judgment by the Honourable Supreme Court underscores the importance of claiming only the rightful amount in cases of dishonor of checks under Section 138 NI Act. Payees must exercise diligence in accurately determining the outstanding amount owed to them and ensure compliance with legal requirements when initiating legal action against the drawer of a bounced check. By adhering to these principles, payees can strengthen their position in legal proceedings and seek recourse for the dishonor of checks in a lawful manner.
FAQs
1. What is Section 138 of the Negotiable Instruments Act?
Section 138 of the Negotiable Instruments Act deals with the dishonor of checks due to insufficient funds or other reasons. It provides a legal recourse to the payee when a check issued to them bounces.
2. Why is it important to claim only the right amount under Section 138 NI Act?
Claiming only the correct amount ensures the validity of the claim under Section 138 NI Act. Claiming an amount higher than what is due can lead to legal complications and may render the claim invalid.
3. What does the recent Supreme Court judgment emphasize regarding claiming the right amount?
The recent judgment emphasizes that the claimed amount must correspond to a legally enforceable debt. Interest or penalties cannot be included unless expressly stipulated in the agreement between the parties.
4. How can payees ensure compliance with legal requirements when claiming the right amount?
Payees should meticulously calculate the outstanding amount owed to them by reviewing the terms of the underlying transaction and any applicable agreements or contracts.
5. Can interest or penalties be included in the claimed amount under Section 138 NI Act?
Interest or penalties can be included only if they are expressly stipulated in the agreement between the parties. Merely adding interest or penalty arbitrarily without legal basis would not suffice.
6. What steps should payees take before initiating legal action under Section 138 NI Act?
Payees should first send a legal notice to the drawer demanding payment within the prescribed timeframe. The notice must accurately specify the amount claimed and provide the drawer with an opportunity to settle the debt.
7. What happens if the drawer fails to comply with the legal notice sent under Section 138 NI Act?
If the drawer fails to comply with the legal notice within the stipulated period, the payee can initiate legal proceedings under Section 138 NI Act to seek recourse for the dishonor of the check.
8. Can payees claim additional charges such as interest or penalties without a legal basis?
No, payees cannot claim additional charges such as interest or penalties unless they are expressly stipulated in the agreement between the parties or supported by relevant legal provisions.
9. How can payees strengthen their position in legal proceedings under Section 138 NI Act?
Payees can strengthen their position by accurately determining the outstanding amount owed to them, ensuring compliance with legal requirements, and maintaining proper documentation to support their claim.
10. What are the consequences of claiming an amount higher than what is due under a bounced check?
Claiming an amount higher than what is due can jeopardize the validity of the claim under Section 138 NI Act and may result in the dismissal of the complaint filed by the payee. It's essential to claim only the rightful amount to avoid legal complications.