Page 121 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes

Limouzines India Ltd.
eepak is a client of City Limouzines India Ltd. He received a cheque of amount
` 6000 dated as 2nd Sept. 2009 from City Limouzines India Ltd, & deposited same
Dcheque on 7th Sept. 2009 in his Bank, which has been bounced with narration
“Insuffi cient Balance”.

He called on City Limouzines India Ltd help line for same, but didn’t get any satisfactory
response from help line, He called on “Toll Free/24X7 Helpline: 23814792” at 2:16 PM on
dated 12th Sept. 2009 a lady picked the call and she didn’t show any interest to resolve his
query/concern, she hanged the phone with stating that “We will dispatch a letter after 20th
Sep then check.”

Deepak states that, as per his knowledge and as per company websites “City Limouzines”
India Ltd. and ISO approved company. But I am unable to understand that how a cheque

of amount ` 6000 get bounced with narration “Insufficient Balance”? I sent mail regarding
same on given e mail ID “info@citylimouzines.com” but till date I am not getting any revert
from company.
It is very serious case; if company is going to Fraud then it will impact all investors. Thinking
this, he lodges a complaint the consumer court requesting them to take legal action against
City Limouzines India Ltd.
Questions
1. Analyse the legal actions which should be taken by the Consumer court for the
protection of Investors.
2. What penalties should be forced on the company?
3. Every now & then, there are cases of cheque bouncing & dishonour. What precautions
& remedies would you suggest for the investors to get them protection from such
fraud companies?

6.11 Summary

The Negotiable Instrument Act, 1881 came into force on 1st March 1881. It extends to the
whole of India except the State of Jammu & Kashmir.
The term Negotiable Instrument consists of two parts viz.; Negotiable and Instrument.
The word ‘negotiable’ means transferable by delivery and the word ‘instrument ‘ mean
written documents by which a right is created in favour of some person.
It means an instrument possessing the quality of Negotiability is entitled to be called
negotiable instrument.

As per the instructions issued by the Reserve Bank of India (9-9-1992) it would be safer for
the drawer to cross a cheque “not negotiable” with the words “account payee” added to
it.

The courts of law have held that “an account payee” crossing is a direction to the collecting
banker as to how the proceeds are to be applied after receipt.

The banker can disregard the direction only at his own risk and responsibility.

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