Client closing bank account and intimating, can company present cheque in bank?

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This topic contains 1 reply, has 2 voices, and was last updated by Dr. Ashok Dhamija Dr. Ashok Dhamija 6 months, 1 week ago.

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  • #4879

    Anonymous
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    If a client closes bank account and intimates us by mail, while his dues are there with the Company, can his cheque be presented and if bounced, can we proceed for legal action?

  • #4899

    If your client has closed his bank account but still owes you some amount, he should either make the payment of the amount due or at least provide you with a new cheque (drawn on some other bank account) in place of the existing cheque.

    In the absence of the above, if there is a debt or liability on the part of the client then dishonour of the cheque even on the ground of the bank account having been closed may also amount to an offence under Section 138 of the Negotiable Instruments Act. In any case, if the cheque is dishonoured due to this reason, and if you send him a notice as required under Section 138, then he should make the payment in terms of such notice if he is a genuine person and if the account was closed genuinely. However, if he fails to make the payment of the amount of the cheque even after receiving the notice after the cheque dishonour, it may amount to a case under Section 138 of the said Act even though the dishonour of the cheque was due to closure of bank account.

    For more information, please also read: Impact of closing of account on cheque bouncing case – whether Section 138 attracted?

         


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

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