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Can an Employer take a undated cheque from employee at the time of appoitment. I joined a company in 2009. Company has taken a undated cheque of my three month salary. And in 2012 I resigned but they didn\'t allow me to serve the notice period and deposited my cheque in bank. which one bounced due to insufficient fund. Now Co has filed a legal case on me.
Please guide me should I give them notice period salary amount or fight the case.
13th March 2013 From India, Delhi
please answer the following questions
Is there any rule/ T&C of employment you found written in your employment letter that you must provide “Undated Cheque/Blank Cheque” to employer while at the joining?
Did you get any copy of notice from your employer in this regards?
Did you get any copy of Legal notice that they have filed against you?
What was the reason of your resignation or breach of employment?
Why you were not allowed to serve Notice Period if you were ready and
what was the amount of the cheque?
Your query is lacking with many of things and the answers of above posted questions can enable us to give your appropriate response …
13th March 2013 From India, Gurgaon
Name the Organization so that other dont fall prey to them in future
18th March 2013 From India, Mumbai
Further to the citation by Anil ji, heres a couple of them more which I'd did like to empathize --
Company has no right to coerce any candidate/employee to hand a post-dated cheque, hence it should be a term in the organization; which terms are to be read & made clear.
[Check your appointment for (any such) clause]
- Were you bullied to give a undated check?
- Were you aware that giving a cheque might prove to have legitimate issues?
- If not; How'd you give it in first place?
This line makes me feel mystic -- If you decided to resign, you told your employer and still they haven't allowed you to serve notice.. then;
- How did you leave? ABSCONDED!
- Have you any correspondance (a letter/email) of proof to your resignation?
I hope we are not palying in dark. Therefore, ample of data should be gathered to help give you any expert advice. Thanks!
18th March 2013 From India, Visakhapatnam
Hello Aarush Bhatt,
Further to what Anil Arora & Sharmila Das have mentioned, pl also clarify IF the PDC was taken IN-LIEU of any Bond period.
If yes, what was the period.
You mentioned you joined in 2009 & quit in 2012--pl confirm/clarify the Months too.
Also, since you resigned, pl confirm IF you got the Relieving/Experience Letter(s). Or was it that the company deposited the PDC straightaway?
All the Best.
18th March 2013 From India, Hyderabad
Dear All;
Such practices show that the employer is not confident. In any case the employee need not worry about the employer filing the case against the employee for cheque bouncing, simply because there is no consideration for the cheque. Such transactions are void in law.
Another point is that for the current period, from 1st April the format of cheque is changing. All cheques are numbered. The number can show when the cheque was issued and it will be stale after 3 months. Such cheque cannot be forced for recovery.
I wonder, if this really happens. Employer can take a bond, but advanced cheque for 3 years in advance?
Vibhakar Ramtirthkar.
19th March 2013 From India, Pune
Moral of the story ?
If you are forced to give undated cheques, first thing to do is go to your bank and issue stop payment orders against it .... Pure and simple.
Then if the company does bank the cheques, it will not be considered as criminal offence. The date of stop,payment will also show how old the cheques are. Which will help in case they do file a case
20th March 2013 From India, Mumbai
I had resigned in the month of April 2012. Company sent a notice on 30 April to serve the notice period or deposit 3 month salary. I requested to withdraw the resignation. But Company sent the same again. then I ask to please allow me to serve the notice period. But they demanded the money and deposited my cheque in the bank and It was returned/bounced. In June 2012 company served a legal notice for cheque bounce. I replied in July 2012. Now I got summon from Court under sec 138.
Three month notice mentioned in Appointment letter.
Please suggest
21st March 2013 From India, Delhi
Reason of resignation was illness.[IBS] It is a Digestiv Problem. There was no condition of submitting an undated cheque. But it was held by them as security purpose. Either I had to fill an format duly signed by Two Gaurantor or submit an undated cheque of 3 months salary. This is not mentioned in appoitment letter. When I askex them to allow me to serve the notice period they demanded three months salary from me and withour informing me presented my cheque in the bank.
21st March 2013 From India, Delhi
The company held my appointment letter and asked me to give an undated cheque(three months salary). They gave my appointment letter only after submitting an undated cheque to them. And this cheque was taken from me as an security. This company is located in Okhla Ph-2,New Delhi. And deals in Mobile payment services. I request to all the viewers that don't give any cheque to employer. In my case, I am still fighting with the employer for last 3 years in Delhi court. Employer had deposited my cheque without prior informing me. That cheque bounced. Employer had filed a case agst me. I am the suffer even though I have no legal liability due to Company. Can someone from same company come forward to help me in this regard my nos is 9716944990.
17th July 2014 From India, Delhi
A valid debt is presumed when a case is filed u/ s 138. Law is pretty clear on that otherwise a cheque will have no sanctity. It is a rebuttable assumption . The onus is on the drawer that the cheque was not for consideration and was under fraud, coercion etc. Stop payment instructions to the bank do not absolve anyone from liability. The law is pretty clear on that too.
Undated cheque - or a cheque with no amount filled up later could be a way out , however the onus of proof is still on the Drawer. A prima facie case holds and court will look at all this only at evidence stage.
17th July 2014 From United States, New York
The cheque was taken as a security in 2010 and presented in 2012. Can we go the handwriting expect to check the ink of the cheque or handwriting etc. Can we request the court to do this exercise. The cheque was undated when it was submitted to employer and date was filled later by employer according to his convenience.
21st July 2014 From India, Delhi
The purpose of an "undated cheque" is exactly that - to be able to put the date at a later period so that it is not "stale".
The employer was within his full rights to put the relevant date.
The only thing the court will now look at is whether there was any debt existing at the time of presentation to the bank. If the court decides there is no debt, bouncing of the cheque is not a criminal offence. The company can still proceed on a civil trial if it has any grounds for the same. if the court decides there was a debt and the cheque was presented to clear the same, it amounts to a criminal offence to bounce the cheque for want of funds.

21st July 2014 From India, Mumbai
But how can a company take a undated cheque at the time of appointment. No training was given to me. It was taken by holding my appointment letter.
21st July 2014 From India, Delhi
That is a question that you should have asked when you gave undated cheques to the company.
The de-facto situation now is that they have a cheque, on which the date appears to be current and it has bounced due to non-availability of funds, which is a criminal offence. And they have filed a case against you under Sec 138 of Negotiable Instruments Act.
It has been repeatedly discussed on this forum and the consensus is that its stupid to give a blank cheque or a security cheque to the company, but that employees give it because they want the job and dont think ahead.
You can always use these arguments in the court.
But as i said, its for the court to decide whether or not there is a debt you owe to the company.

21st July 2014 From India, Mumbai
Company has already filed a case U/s 138 as the OP says.

s. 138 says :

138 Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both


It is now for the Court to decide how sound your case is and what penalties to impose. You would have got a Notice from the Company earlier demanding payment and now that a case has been filed a Notice/Summons from the Court also , enclosing the Written Statement of the Company which should set out clearly why they are claiming this amount.

If you can rebut their claims in writing, with strong evidence to back it up rather than just statements you may have a case. Else you have no case, IMHO.

Suggest you take advise of a lawyer now.
21st July 2014 From United States, New York
Hi So, if a person can opt. Stop payment option And the cheque become void, than company can not take any action??
6th November 2016 From India, Bhopal
A cheque stopped for payment is equivalent to bouncing of the cheque. Then whether there was sufficient funds in the account is immaterial. The matter is still covered under Sec. 138.
You can not issue a cheque for a debt and then issue a stop payment.
7th November 2016 From India, Mumbai
@ Anil Arora,
Problem, if any you experienced should have been described than asking so many academic questions. Solutions depend on the nature of the problem, not generic answers, is asked on hypothetical academic questions. However, having not seen this query earlier, sorry for late response to the query.
29th June 2017 From India, Delhi
@Aarush Bhatt,
What is the present stage of your court case for dishonour of cheque or settlement with the employer?
29th June 2017 From India, Delhi
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