REPLY TO LEGAL NOTICE UNDER SECTION 138 OF

NEGOTIABLEINSTRUMENTS ACT, 1881

Dhruvil Rathore
Advocate
Sargasan, Thaltej
Ahmedabad-380008

Date: 11.11.2022

To,
Sh. Preet Patel
Managing Partner
XYZ Advocates,
Ahmedabad-380060

SUB: REPLY TO YOUR LEGAL NOTICE U/S 138 NEGOTIARLE INSTRUMENT

ACT, DATED 10.10.2022

Dear Sir,

Your legal notice dated 10.10.2022 has been placed before me by my client Mr. Robert
Khatri at ABZ Nagar, XYZ Marg, Jaipur-380008 and I, the undersigned, have been instructed to
reply to your said notice by my client on his behalf as under:

A. That, at the outset you are being informed that the notice under reply, you have sent on
behalf of your above said client, contains false and frivolous facts provided by your said
client against my client, thereby your notice under reply deserves to be withdrawn, with
unconditional apology by your client, because the claim made by you is without any basis
and is based upon concocted facts, as no claim is made out against my client and in favour
of your client.

B. That the cheque no. 1 was given undated and blank before the disbursal of the loan and is
a security cheque and was not issued for subsisting legally enforceable liability, your
client cannot use the blank undated cheque given by the applicant to fulfill the pre-
disbursement condition to recover the outstanding amount. Hence the cheque no. does not
lie within the realms of Section 138 NI Act. The cheque given as a pre-disbursement
condition is not the mode of repayment of the loan. The cheque was obtained prior to
disbursement of loan at which time there was no subsisting liability. And the cheque is
used by you in the contingent situation when the applicant faced issues in repaying the
loan due to his economic crisis well informed to you. Hence the cheque doesn't comply
with the requirement of Section 138 NI Act as it was not issued for legally enforceable
liability but for security which is invoked in case of contingency.
That in a case M.S. Narayana Menon @ Mani vs State Of Kerala & Anr on 4 July, 2006, The
Supreme court stated that "52. If the defence is acceptable as probable the cheque therefore cannot
be held to have been issued in discharge of the debt as, for example, if a cheque is issued for
security or for any other purpose the same would not come within the purview of Section 138 of the
Act.”

C. That, however, your client has cheated my client by misusing that cheque of my client.
As a matter of fact, your client has committed fraud in the matter and, consequently, is
liable to be proceeded under the relevant provisions of law.

D. That your client is using the provisions of law to push the applicant to repay loan under
threat of prosecution and punishment under Section 138 of the Negotiable Instruments
Act, 1881 and under the sections of fraud and cheating of Indian Penal Code, 1860.

REPLY ON MERITS:

1. That the contents of para 1 are denied. However, it is reiterated that my client ever issued
any cheque, in the manner as alleged by you.

2. That, in reply to para 3 of your legal notice, what is stated above is reiterated. It is
submitted that your client was not entitled to use that cheque for encashment and deposit
the same in his bank.

3. That the contents of para’s 4 &5 are denied for want of knowledge. However, it is
reiterated that any cheque was issued in discharge of any liability towards my client to
your client.

4. That the contents of para 6 need no comments. However, it is denied that my client
committed any offence whatsoever.

5. In view of aforesaid facts and circumstances, you are being advised to further advice your
client to withdraw the said notice under reply and further advise him not to drag my client
in any frivolous litigation, failing which my client shall be constrained to contest the
same, besides proceeding against your client under the relevant provisions of law, at the
costs, risks and consequences of your client only. Copy kept for future record and
reference.

Yours Sincerely,
Devanshi Mehta
Advocate

Copy kept in my office for future reference and use.