Page 111 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes

Case Study City Limouzines India Ltd. Cheque Bounced – Fraud
Case

eepak is a client of City Limouzines India Ltd. He received a cheque of amount
` 6000 dated as 2-Sep-2009 from City Limouzines India Ltd., and deposited same
Dcheque on 7-Sep-2009 in his Bank, which has been bounced with narration
“Insufficient 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 12-Sep-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 and then, there are cases of cheque bouncing and dishonour. What
precautions and remedies would you suggest for the investors to get them protection
from such fraud companies?

Source: http://www.consumercomplaints.in/complaints/city-limouzines-india-ltd-c253425.html
4.11 Summary

A negotiable instrument means a promissory note, a bill of exchange or a cheque.
A promissory note is an instrument in writing (not being a bank or a currency note),
containing an unconditional undertaking, signed by the maker to pay a certain sum of
money to, or to the order of, a certain person or to the bearer of the instrument.

A bill of exchange is an instrument in writing, containing an unconditional order, signed
by the maker, directing a certain person to pay a certain sum of money only to or to the
order, a certain person, or to the bearer of the instrument.

A cheque is a bills of exchange drawn on a specified banker and not expressed to be
payable otherwise than on demand, and it includes the electronic image of a truncated
cheque and a cheque in the electronic form.
The transfer of an instrument by one party to another so as to constitute the transferee a
holder thereof is called ‘negotiation of the instrument’.

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