hello, i want to know stop payment is an offence or not ?????
stop payment
(Guest)
Shyam Lal Naik
(Service)
(6156 Points)
Replied 21 September 2009
Do you mean offence u/s 138 of the Negotiable Instruments Act.
Under the said section, dishonour of cheque for insufficiency of fund only is an cognisable offence.
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 21 September 2009
see If that person is legally indebted and if he gives stop payment it is an offence under sec 138 of the Negotiable Instrument Act
No, Stop payment is not an Offence.
I will clarify this situation by one Example:
Mr. A has Rs. 10000 in his Bank Account.
Now, He gives Rs. 5000's Cheque to Mr. X.
Now before the Mr. X has deposited the Cheque in the Bank. It would not be considered as a Offence. Because the Rs. 10000 is the sole property of the Mr. A & He can do anything with his money.
Most no. of Stop Payment has been done at the time of Reliance Power IPO, At that time so many person has stop payment the cheque of Issue money.
Ankur Shah (Practicing Company Secretary)
“Guru Gautam” Bungalow, Inside Parshwa Tower,
Nr. Shyamal Cross Road, 132ft. Ring Road,
Satellite, Ahmedabad – 15
Contact: + 91-9427633901
E-mail: ankurjewel @ gmail.com
Blog: csankur.blogspot.com
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 22 September 2009
Mr Ankur shah see subscribing to Relaince Power IPO is to say that we are not legally indebted but in case of trade where a legal money is outstanding and if stop payment is made by drawer it is an offence under sec 138 of the Negotiable Instrument Act that swhy the word used and stressed is if a person is legally indebted to pay a sum of money to another person
Mr. Shivaram,
Let me clarify this concept with example.
Mr. A has sold Rs. 10000 goods to Mr. B on credit.
After that Mr. B gives Mr. A, a cheque of Rs. 10000 for the settlement of Dues.
Now, after that Mr. B has stopped the Payment of the Cheque of Rs. 10000.
By doing the Stop payment, Mr. B can not be Punished,
Because Mr. B can exercise the Different mode for payment of money for example Cash.
However, If Mr. A has deposited the cheque in the Bank, and the Cheque got bounced and Bank imposed fine of Rs. 100 on Mr. A,
Then Mr. B will be liable to give the extra amount of Rs. 100 also with Rs. 10000.
Mr. Shivaram,
Bouncing of Cheque, Stop Payment are the very negligible offence under the Act and when You rushed to Police Station or Court, then they will also not admit Your case, Because they have lot of Work to do.
In case of Reliance, Person is indebted too, Because the Reason behind that is as follows:
When the Reliance Power came out with IPO, The company has made general offer to the Large Public.
After that People have Subscribed to the IPO and Submits the forms to the Brokers.
And Once the Broker have accepted the Forms, It means that the contract comes into existence.
Because Every Requisite thing has beed done:
(1) Offer made by Reliance
(2) Counter Offer made by General Public through IPO Forms
(3) Acceptance of Counter Offer by Broker by accepting the Forms.
And Once the Offer id Accepted, The Contract comes into existence as per the Contract Act, 1872.
So, Reliance Power Can also sued the General Public, who have stopped payment.
But, Reliance has exercised the Practical approach and didn't sue anyone.
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 23 September 2009
Attn: Mr Ankur Shah
Just Go through sec 138 of Negotiable Instrument act where Stop Payment by Drawer is also one of the grounds for which sec 138 applies.but in case as u said after making stop payment and party settles by cash in full it is ok .But if only part payment is only made in cash still then sec 138 procedure can be adopted.Kindly note bouincing of cheque cannot be taken in police station and also sec138 is not a recovery procedure as it takes a considerable time for the court to settle the issue therefore a summary suit under sec 420 of IPC is to be filed within 3 years from the date of the cheque
CA. Harsh Arora
(Chartered Accountant)
(377 Points)
Replied 23 September 2009
if someone sign differently and as a results his cheque is bounced then can it can be legally chalanged in the court
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 24 September 2009
in my opinion the cheque is returned on the ground that the signature of the drawer differs it is not challenged in the court. The Instances for challenging in the court are
1.Insufficient Funds
2.Stop Payment by drawer
3.Full Cover not received
4.Effects not cleared present again
CA. Harsh Arora
(Chartered Accountant)
(377 Points)
Replied 24 September 2009
sivaram, but if some one delibrately sign differently then, is not be the case of challanging in the court.
It can not be challenged in the Court,
Opposite Party show following type of Excuse:
(1) I sign in haste, so, forgive me court.
(2) I think that, this is my correct signatiure. So, Forgive me court.
There are more excuses also.
One Thing should be bear in mind that, Personal Intention can not be proved in the Court.
LIVE Form 10 B and Form 10BB: Handle Tax Audit Reports of Charitable Organizations(with recording)
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