Answer By law4u team
In a cheque bounce case under Indian law, the drawer (the person who issued the cheque) can raise several defenses. These defenses aim to refute the allegations of dishonor or to reduce their liability. Here are the common defenses available to the drawer: Insufficient Funds: The drawer may argue that there were insufficient funds in the account at the time the cheque was presented for payment. This defense must be supported by evidence of the bank statement or other financial documents showing that the account had insufficient balance. Stop Payment Instruction: If the drawer had issued a stop-payment instruction to the bank before the cheque was presented, this can be a valid defense. The drawer must prove that the stop-payment instruction was given in accordance with the legal requirements. Forgery or Alteration: The drawer may claim that the cheque was forged or altered in any manner without their consent. In such cases, the burden of proof lies with the drawer to demonstrate that the signature or details were forged. Cheque Was Not Issued for Consideration: A drawer can claim that the cheque was issued without any valid consideration or that the underlying transaction was void. For example, if the cheque was issued as a gift or without any legal obligation, the drawer can raise this defense. Discharge of Debt or Payment: If the drawer has already paid the debt for which the cheque was issued or if the liability was extinguished in some other manner (such as through settlement or agreement), they can argue that the cheque was not validly presented. Cheque Was Issued as Security: If the cheque was issued as security for a loan or debt, and the loan has already been repaid, the drawer may claim that the cheque was not intended to be presented for payment. Cheque Was Postdated: If the cheque was postdated, and it was presented before the specified date, the drawer can argue that the cheque was not due for payment at that time. Inadvertent Error: In some cases, the drawer may argue that the dishonor of the cheque was due to an inadvertent error or misunderstanding. However, this defense is often harder to prove. Non-Receipt of Legal Notice: Under Section 138 of the Negotiable Instruments Act, the payee must send a legal notice to the drawer within 30 days of the dishonor of the cheque. If the drawer can prove that they did not receive the notice, this can be used as a defense. Bank's Error: If the dishonor of the cheque was due to the bank's error (such as incorrect processing or technical issues), the drawer may raise this as a defense. It’s important to note that these defenses need to be raised before the court, and the drawer has to prove them with proper evidence.
