Delhi court suggests awareness drives by DLSAs, banks on misuse of blank cheques

Taking note of the judicial system being flooded with cases involving the misuse of cheques allegedly issued as ‘security’ by one person to another, a court here has suggested organising awareness programmes through the Delhi State Legal Services Authority (DLSA) and banks.

The court gave the suggestions while dismissing a complaint seeking action against a government school teacher for allegedly misusing four blank cheques issued to him by the complainant.

Additional Chief Metropolitan Arvind Bansal said it has been found that a blank cheque is signed and handed over like an inconsequential piece of paper without understanding the repercussions thereof, thus burdening the court with unnecessary litigation.

Court deems it necessary to take judicial notice of the factum of number of cases, involving use or misuse of cheques allegedly issued as ‘security’ by one person to another flooding the court. It has been found that a blank cheque is signed and handed over like an inconsequential piece of paper without understanding the repercussions thereof.

It not only affects the statutory purpose of creation of negotiable instruments particularly a cheque but also burdens the court with unnecessary litigation clogging the system. It is, therefore, imperative that general public is made aware of law concerning negotiable instruments and cheque dishonour like other civil, criminal and social welfare laws, the court said in its order passed on January 23.

It added that it was also the need of the hour that as part of the awareness drive, it be made mandatory for the banks to imprint a statutory warning on each cheque that dishonour thereof may amount to an offence under sections of the Negotiable Instruments Act and entail penalty equivalent to double the cheque amount and imprisonment up to two years.

Let a copy of this order be forwarded to learned Member Secretary, Delhi State Legal Services Authority with a humble request to consider feasibility of organizing such awareness programmes through DLSAs, it said.

According to the complaint, complainant Ram Kumar Sharma was allegedly a member of four chit funds/committees being run by Dhan Pal Singh without any registration.

Sharma alleged that in 2007, he had handed over four undated and blank cheques to Singh, who assured him that he shall return them after completion of all instalments of the chit fund in the presence of witnesses.

However, after full and final payment of committee/chit fund, Singh did not return the cheques and kept on lingering the issue on one pretext or another, the complaint alleged.

The plea further alleged that Singh had told Sharma that the cheques were lost from his house.

Sharma said Singh allegedly misused the cheques.

While dismissing the complaint, the court said no sufficient grounds were made out against Singh for the alleged offences.

It noted that despite knowing that Singh was allegedly running a private chit fund illegally, the complainant admittedly chose to join it and hence his act was like an accessory to the crime being committed by accused.

It further said an informal/rough record of all those transactions was being maintained but there was no receipt /acknowledgment of the handing of the alleged four blank signed cheques.

Such a lapse doesn’t appear to be the conduct of a reasonable prudent man. In the absence of any document, prima facie, corroborating claim of complainant that alleged cheques were issued as security, a bald statement cannot be accepted, the court said.

The court added that despite knowing that the cheques had been allegedly lost, the complainant did not approach his bank to ‘stop payment’ of those cheques, and as per record, the cheques got dishonoured for ‘insufficient funds’.

It noted that the cheques had got dishonoured in 2007 and 2008 and the complainant filed the complaint with the police for alleged misuse of cheque in 2011, after a delay of 3-4 years.

Delay of 3-4 years in filing a written complaint despite knowledge of dishonour of his two cheques allegedly issued as ‘security’ is beyond comprehension of a prudent mind, the judge said in his order.

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