[Guest Post] Complaint U/S. 138 NI Act: Filing and Procedure

Editor’s note: Filing complaints under the Negotiable Instrument Act is one of the many things that you, as an intern or a litigation associate, would observe in each and every district court with almost every advocate practicing in the subordinate Courts of India. 

The post has been contributed by Anuradha Chandel, Advocate – District Court, Solan, Himachal Pradesh. Ms. Chandel is currently a Junior Advocate and regularly appears before lower courts and tribunals in Solan, H.P.

When a complaint under section 138 of Negotiable Act is maintainable?

  • A complaint under Section 138 of N.I Act can be filed by a person to whom a cheque is issued (called the complainant) and the same is dishonored due to any reason.

Reasons for dishonor of a cheque may be –

  • Insufficient funds,
  • Exceeds arrangements,
  • Account closed,
  • Payment stopped, etc.

Conditions under Section 138 of NI Act

    • The person issuing the cheque (called the accused person) must have issued the same for consideration or for discharging any legal liability.
    • The complainant shall serve the accused with a legal notice through his/ her counsel directing the accused to make the payment of the dishonored cheque within a period of 15 days from the date of receipt the said notice.
    • Such legal notice shall be served/ sent to accused within a period of 30 days from the date of receiving the intimation or information regarding the dishonoring of the cheque by the Bank.
    • From the day on which the time period of 15 days as given to the accused of making the payment expired, the time period for filing the complaint under Section 138 of N.I.Act reckoned and the same shall be filed before the expiry of 30 days.

How to file a complaint under section 138 of Negotiable Instruments Act?

  • The complaint can be filed addressing to the Chief Judicial Magistrate who can retain the file and take cognizance upon the complaint or can assign the complaint to judicial Magistrate of a first class to take cognizance and try the complaint. The complaint is to be filed before the court within whose local jurisdiction the branch of the bank in which the complainant maintains his account situates and he has presented the cheque in that account for encashment.
  • Such complaint shall be drafted in such a manner so as to include each and every detail regarding the cheque, legal notice sent, reply received (if any) and also statement revealing that the complaint has been filed well within the time period in accordance to the provisions of the N.I.Act. The complaint shall be accompanied by an affidavit of the complainant.
  • Court fees of Rs. 6 is to be fixed upon the complaint.
  • List of Witnesses shall also be attached.
  • Form -“list of documents” is to be filled and all the documents annexed to the complaint has to be written on this form with Annexures.

Documents to be filed with the complaints are:

  • Original cheque,
  • Cheque returning memos (any)
  • Copy Legal notice sent to the accused thereby making demand to make payment within 15 days from the date of delivery of the same,
  • Copy of reply (if any) sent by the accused and
  • Any other document relevant for proving the liability of the accused or which are necessary for the proper adjudication of the case.
  • A Power of attorney (Vakalatnama) signed by the complainant and accepted by his counsel with 6 Rs. Court fees and welfare stamp fixed on it.
  • Preliminary evidence in shape of Affidavit in compliance with Section 145 of N.I. Act is also required to be filed along with the complaint under Section 138.
  • Process fee form for service of the accused sufficiently stamped shall also be filed.
  • Copy of complaint and other documents shall also be filed so that court can send the copy of the same to the accused for his notice regarding the contents of the complaint.

All the above-stated documents are to be arranged in the sequence as described above in a file and on the file, the name of the court in which it is to be instituted to be written.

Precautions to be taken while issuing Cheque

  • When anyone issues a cheque for discharging any legal liability and for any consideration, he should ensure that he has sufficient funds in his/her account so that the cheque he/she has issued can be honored at the time of its presentation in the bank.
  • While issuing a cheque for securing any payment one should keep in mind that he should not issue a blank cheque to anyone as his /her cheque can be misused. So , if anyone issues a cheque for securing any payment or for discharging any legal liability in future, he should enter the amount in the cheque along with the date on which he is issuing the cheque (future date can also be entered if the payment is to be repaid in future, these are called post-dated cheques) and he should write on the back of the cheque that he is issuing the cheque(s) for security purpose.

Examination on Oath

The Magistrate before taking cognizance of the offense shall examine the complainant on oath in compliance to Section 200 of the Code of Criminal Procedure, 1973, as the complaint under Section 138 is a private complaint and the same is also governed by the provisions of the Code of Criminal Procedure, 1973.

Photos of list of documents

 

Featured image from here.

L&P Editorial Team

The Law & Practice Blog's editorial team.

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