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Procedure For filing Complaint Under Section 138 Negotiable Instrument Act

Procedure For filing Complaint Under Section 138 Negotiable Instrument Act

 a)Under provisions of negotiable instruments act.sec.138  a legal notice on behalf of complainant is issued to the defaulter whose cheque is dishonored. It should be issued within 15 days of dishonor of cheque by RPAD. All facts including the nature of transaction, amount of loan and or any other legally enforceable debt against which the said cheque was issued and the date of deposit in bank and date of dishonor of cheque should be mentioned in the notice.

 b) The person who has issued cheque is directed to make the payment of amount of dishonored cheque within 15 days. In case the said payment is made within 15 days of service of notice then the matter ends.

c) But in case the said payment is not made within 15 days then the complainant has to file a criminal case in the court within 30 days from the expiry of notice period of 15 days.

 d) The court will hear arguments of complainant/ advocate for complainant and issue process under section 138 of N.I. Act.

 e) The summons are sent and served through police station where accused is residing.

 f) Kindly note that in N.I. Act. Sec.138 cases, police is limited to only service of summons and in case accused remains absent on court date after service of summons then only warrant is sent to police station to produce accused in court.

 g) But it is observed in several cases that accused persons are harassed by concerned persons who are directed to serve notice/warrant.

 h) Hence it is advisable that accused should not be afraid of this court case and regularly attend court dates so that warrant will not be issued and further unnecessary harassment will be prevented.

i) Kindly note that offence under section 138 of N.I. Act is a bailable offence as the punishment provided for said offence is two years.

 j) Accused has to submit surety with all surety documents including ownership documents of house or land owned by surety, his address proof including ration card, election identity card, photo and address proof of surety and accused. On receiving summons from the court the accused and surety should remain present in court with all abovementioned documents and court will accept the surety and on signing bonds by accused and surety, the bail will be granted and accused will be released by court.

 k) Then the complainant will file the affidavit for his evidence with all original documents in support of his complaint. This is called exam in chief of complainant. Then accused/his advocate will cross examine the complainant.

l) Complainant can submit additional witnesses in support of complaint.

m) Then once witnesses of Complainant are over then statement of accused is recorded under sec.313 of Crpc .Accused will be asked to give reply to the questions and allegations against him.

 n) Then witnesses of accused to prove his innocence will be produced and the evidence will be recorded by the court.

 o) Last stage is of arguments of advocate of complainant and argument of advocate of accused

 p) Court will pass the Judgment. In case accused is acquitted then matter ends. But in case accused is convicted then immediately accused should submit bail application and give surety and pray for time to appeal to sessions court. Court will direct him to deposit fine as per judgment in the court immediately then he will be released. He should appeal to sessions court within one month from the date of judgment of lower court.

 q) Criminal appeal with application for suspension of sentence and for bail will be given hearing by the dist and sessions court and on furnishing surety as per directions of court including deposit of some amount towards compensation ordered as per judgment the accused will be released on bail.

r). Kindly note that the dispute may go on from district and sessions court to high court and then to supreme court.

s). Kindly note that there is amendment in the negotiable instruments act. The offence is made compoundable. Hence in case the matter is settled between the parties , then on an application in the court , the court may allow to compound the case and close the case.

 t) Kindly note that these are general guidelines for knowledge and reference of all concerned who are harassed by the complainants by forcing the borrowers to issue blank signed cheques in advance at the time of sanction of loan.

 u) If a complainant withdraws the case under sec.138 of the NI Act, court fee will be refunded as:

·        In India, the Negotiable Instruments Act regulates commercial transactions which take place through cheques, promissory notes and bills of exchange.
·        The Maharashtra government announced in a gazette notification in May 2011 that a claim for refund of court fees can be made after the withdrawal of the complaints for the cases, which are filed under section 138 of the Negotiable Instruments Act, 1881.
·        According to the Maharashtra government resolution (GR), the state government, in exercise of its powers conferred by section 43(2) of the Bombay Court Fees Act, 1959 will provide part of the court fees paid by the complainant under article 18 of schedule I, appended to the Act.
·        Such refund will be paid to the complainant under two broad circumstances and conditions.

o       First, under section 138 of the Negotiable Instruments Act, 1881, a refund of 50% of the total court fees will be made when the complainant withdraws a complaint, or when the offence was compounded, before framing of particulars/charges, provided the claim is made within one year from the date of withdrawal of the complaint.
o       Similarly, 25% of the court fee will be refunded provided the complaint is withdrawn, or the offence is compounded, after farming of particulars/charges, or any subsequent stages of the complaint. Here again, a claim has to be made within a year.