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Article Published in the Express Magazine Dated
February 11, 2001
General Attorney : Rajiv K. Luthra
Recently in return for a loan, my friend gave
me a post-dated cheque for Rs. 25,000/-. I
deposited the same in the bank, which was returned
by the bank with the following remarks
"insufficient funds". Now my friend is delaying
the payment and is also not responding to my
calls. What do I do?
Krutika Sharma, Jaipur
You can file a complaint in a court of proper
jurisdiction, which in no case can be a court
inferior to that of a Metropolitan Magistrate or a
Judicial Magistrate of the first class. Section
138 of the Negotiable Instruments Act, 1881
("Act") deals with cheques which are returned by
the bank unpaid for reasons of insufficiecy of
funds in the account of the drawer. The Act
envisages that the drawer of such a cheque shall
be punished with imprisonment for a term of one
year or with fine which may extend to twice the
amount of cheque or with both. However, before a
complaint of this nature can be made there are
certain steps that you as a payee are required to
take. Within fifteen days of receipt of such
information from the bank, you have to give a
written notice to the drawer making a demand for
payment of the said amount. Notice should be sent
by registered post to your friend. If your friend
fails to make the payment of the said amount of
money within fifteen days of receipt of the said
notice, you can make a complaint as described
above. Again such a complaint can be filed within
one month of the arising of the cause of action
i.e. default in making payment by your friend even
after the lapse of fifteen days of receipt of your
notice.
Alternatively you also have the option of invoking
the provisions of Order 37 of the Code of Civil
Procedure, 1908 and file a summary suit for
recovery of dues with interest after giving
notice. You may also avail both remedies
simultaneously.
A building developer entered into an "agreement
to sell" a particular property to me in Gurgaon. I
was given the impression that the title of the
property is clear and the completion certificate
would be provided upon payment of entire sale
consideration before the execution of sale deed.
Accordingly, relying upon the representations made
by the builder, I made the payment for the entire
sale consideration. Despite full payments made by
me, for the past one and half months the builder
is delaying handing over the possession to me.
Upon recent inspection of the premises, it came to
my attention that the builder has given the
possession of the property to someone else, who
claimed himself to be the owner of the said
property. Although, I have sent a letter to the
builder asking for refund of my money, I wish to
understand my legal position and what further
action to take?
J.K. Jain, New Delhi
By asking for refund of the earnest money for the
property, you have lost your right to claim
specific performance of the agreement to sell
entered between you and the builder. However, on
the basis of the agreement and subject to the
stipulations contained therein, you may file a
civil suit for recovery of the payment made under
the agreement alongwith interest and other damages
suffered before a court of competent jurisdiction.
The conduct of the builder under the circumstances
mentioned above may also amount to cheating under
section 415 of the Indian Penal Code ("I.P.C.").
Upon receipt of complaints, the police authorities
are bound to register the F.I.R. and take action
in accordance with the law. Punishment for the
offence of cheating of this nature is provided for
under section 420 IPC. As per this section, if the
offence is proved, the guilty party shall be
punished with imprisonment for a term extending to
seven years and shall also be liable to a fine.
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