Defenses in Cheque Bounce Cases: Common Scenarios and Cross-Examination Strategies

Cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881, are prevalent in India, often arising from disputes over loans, business dealings, or security arrangements.

These cases typically involve the complainant alleging that a cheque was issued in discharge of a legally enforceable debt, but it bounced due to insufficient funds.

However, the accused can mount a defense by challenging the existence of such a debt or proving misuse of the cheque.

This article explores two common scenarios that account for about 80% of such cases, along with suggested explanations, defenses, and cross-examination questions to probe the complainant’s claims. These strategies aim to create reasonable doubt about the transaction’s legitimacy.

Note: This article is for educational and informational purposes only. It does not constitute legal advice. For personalized guidance, consult a qualified attorney. Legal Light Consulting does not take responsibility for the content.

Scenario 1: Cheque Issued Towards a Friendly Loan – Defense: Misuse of Trust and Cheque

In this scenario, the defense revolves around the claim that the cheque was given to a friend under certain conditions (e.g., as a blank cheque or for a specific purpose), but the complainant misused the trust by filling it out or presenting it improperly.

The key is to first explain the context in which the cheque was handed over—such as it being a security for a non-monetary favor or a blank instrument—and then cross-examine to highlight inconsistencies in the complainant’s story about the loan.

Defense Suggestion

Assert that no loan was extended, and the complainant has misused the cheque. Emphasize the lack of documentary evidence, such as loan agreements, bank records, or income tax filings, to question the transaction’s validity.

Cross-Examination Questions

Focus on the mode of payment, source of funds, and documentation to expose gaps:

1. What was the mode of payment of the loan?
   (Q1: लोन का पेमेंट किस मोड में किया गया था?)
2. If it is cash, can he show bank withdrawal?
   (Q2: अगर कैश है तो क्या बैंक विड्रॉल दिखा सकते हैं?)
3. If the cash amount is huge, then what was the source?
   (Q3: अगर कैश अमाउंट बड़ा है तो सोर्स क्या था?)
4. Has he filed ITR?
   (Q4: क्या ITR फाइल किया है?)
5. Has he mentioned the amount in the Balance Sheet?
   (Q5: क्या बैलेंस शीट में अमाउंट मेंशन किया है?)
6. Is the Balance Sheet with voucher or acknowledgement?
   (Q6: क्या बैलेंस शीट वाउचर या एकनॉलेजमेंट के साथ है?)
7. Is the Balance Sheet audited?
   (Q7: क्या बैलेंस शीट ऑडिटेड है?)

Additional Probing Questions for Friendly Loan Context

These questions delve deeper into the relationship, transaction details, and the complainant’s habits to undermine credibility:

• Is it true that even before this loan, Ashok ji had taken a loan from you?
  (क्या यह सही है कि इस लोन के पहले भी अशोक जी ने आपसे लोन लिया था?)
• Is it true that you keep helping your friends in the form of loans?
  (क्या यह सही है कि आप और भी अपने दोस्तों को लोन के रूप में मदद करते रहते हैं?)
  If yes, then can you name them whenever required?
• If ever a loan was given, then how was it given—in cash or online?
  (अगर दिया था कभी लोन तो कैसे दिया था—कैश या ऑनलाइन?)
• Do you remember the amount you paid?
  (क्या आपको याद है कि कितना अमाउंट दिया था?)
• Do you remember on which date it was given?
  (क्या आपको याद है कि किस डेट में दिया था?)
• Do you remember how many times you gave money to Ashok ji?
  (क्या आपको याद है कि आपने कितनी बार पैसा अशोक जी को दिया था?)
• Did Ashok ji return your money timely?
  (क्या अशोक जी ने आपको पैसा समय से वापस कर दिया था?)
• Can you tell for what purpose you gave the loan?
  (क्या आप बता सकते हैं कि किस उद्देश्य के लिए आपने लोन दिया था?)
  Follow-up: You lent such a huge amount without knowing the purpose?
  (बिना उद्देश्य जाने ही आपने इतना बड़ा अमाउंट उधार दे दिया?)
• Is it true that you have given loans to other friends without asking any purpose?
  (क्या यह सही है कि आपने और भी दोस्तों को बिना उद्देश्य पूछे लोन दिया है?)
• Did you pay the loan amount in full or in part?
  (क्या आपने लोन अमाउंट को पूरा पैसा एक साथ दिया था या पार्ट पेमेंट किया था?)
• Did you give the complete loan amount to Ashok ji in cash or transfer it online?
  (क्या आपने कम्पलीट लोन अमाउंट अशोक जी को कैश में दिया था या ऑनलाइन ट्रांसफर किया था?)
• Did you enter into any written agreement while lending?
  (क्या आपने कोई राइटिंग एग्रीमेंट किया था उधार देते समय?)
• Was anyone there when you gave the money?
  (क्या जब आपने पैसा दिया था तो कोई वहां पर मौजूद था?)
  If yes: Then you have made him a witness in this case?
  (अगर हां तो आपने उन्हें विटनेस बनाया है इस केस में?)
• Do you remember the date when you lent your money?
  (जब आपने पैसा उधार दिया था तो क्या आपको डेट याद है?)
• Did you meet Ashok to lend money, or did Ashok come to your place?
  (उधार पैसा देने के लिए आप अशोक से मिले थे या अशोक आपके पास आए थे?)
• Do you remember where you gave this loan cash amount?
  (क्या आपको याद है कि यह लोन कैश का अमाउंट आपने कहां किस जगह दिया था?)
• What time was it when you lent the money?
  (क्या समय हो रहा था जब आपने पैसा उधार दिया था?)
• Did you know what will happen to the money you lend?
  (क्या आप जानते थे कि आप जो पैसा उधार दे रहे हैं उसका क्या उपयोग होगा?)
• Has Ashok ji ever returned money within a year after borrowing?
  (क्या पैसा उधार लेने के बाद कभी अशोक जी ने विथिन ईयर वापस किया है?)
• Did you know that Ashok ji will give this money back to you in a year?
  (क्या आप जानते थे कि अशोक जी यह पैसा एक साल में आपको वापस दे देंगे?)
• Did you already know about Ashok ji’s bank transactions that he is able to return your money within a year?
  (क्या आपको अशोक जी के बैंक ट्रांसक्शन के बारे में पहले से पता था कि वह पैसा आपको विथिन ईयर वापस करने में समर्थ है?)
• At the time of giving the loan, did you keep the intention that he will return the money in one go, or can he return the loan in parts as well?
  (क्या आप लोन देते समय यह शर्त रखी थी कि आपको पैसा एक साथ वापस करेंगे या पार्ट में भी लोन दे सकते हैं?)
• Have you ever asked for the loan money back by calling or meeting before time?
  (क्या आपने कभी समय से पहले कॉल करके या मिलकर लोन का पैसा वापस मांगा?)
• Did you talk to Ashok before depositing the cheque in the bank?
  (क्या आपने चेक को बैंक में लगाने से पहले अशोक से बात की थी?)
• So what kind of assurance did you get from Ashok before you deposited the cheque?
  (तो चेक जमा करने से पहले आपको अशोक से किस तरह का असुरेंस मिला?)

Scenario 2: Security Cheque Not Given in Lieu of Debt – Defense: Misuse of Security Cheque

Here, the defense is that the cheque was provided as security for ongoing business dealings or accounts, not for a specific debt. The complainant is accused of misusing it by presenting it without any outstanding dues. Cross-examination should target the history of dealings, account statements, and the absence of the cheque amount in records.

Key Defense Suggestion

State that the accused did not owe anything, and the complainant has misused the security cheque. Highlight the lack of evidence showing the debt on the date the cheque was issued.

Cross-Examination Questions

Probe the business relationship and records:

1. How many years are you dealing with the complainant?
   (Q1: कितने साल से आप complainant के साथ डीलिंग कर रहे हैं?)
2. How do you settle the accounts?
   (Q2: अकाउंट्स कैसे सेटल करते हैं?)
3. Do you take security cheques?
   (Q3: क्या सिक्योरिटी चेक लेते हैं?)
4. Do you maintain statement of accounts?
   (Q4: क्या स्टेटमेंट ऑफ अकाउंट्स मेंटेन करते हैं?)
5. Can you show us the statement of account?
   (Q5: क्या स्टेटमेंट ऑफ अकाउंट दिखा सकते हैं?)
6. Where in the statement of account does the accused owe the cheque amount on that given day?
   (Q6: स्टेटमेंट ऑफ अकाउंट में कहां दिखता है कि accused उस दिन चेक अमाउंट का कर्जदार था?)

Conclusion

These scenarios illustrate how defenses in cheque bounce cases often hinge on disproving the existence of a legally enforceable debt through rigorous cross-examination. Questions about transaction details, documentation, and the complainant’s financial habits can reveal inconsistencies, potentially leading to acquittal. Always remember, the burden is on the complainant to prove the debt, but a strong defense can shift the narrative.

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Disclaimer: The information here is not legal advice. For advice about your specific situation, please contact a licensed attorney. This article is for informational purposes only and does not constitute legal advice. For expert guidance, please consult Legal Light Consulting – LLC Lawyer directly.