The New Amendment in Negotiable Instrument Act is applicable from 01/09/2018

*The New Amendment in Negotiable Instrument Act is applicable from 01/09/2018*

*Insertion of new section 143A*
In the Negotiable Instruments Act, 1881 (hereinafter referred to as the principal Act), after section 143, the following section shall be inserted, namely:—
Power to direct interim compensation.
‘‘143A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant—
(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and
(b) in any other case, upon framing of charge.
(2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.
(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973.
(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section.’’.

*Insertion of new section 148.*

In the principal Act, after section 147, the following section shall be inserted, namely:—
Power of Appellate Court to order payment pending appeal against conviction.
‘‘148. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial Court:
Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143A.
(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.
(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:

Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.’’.

Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked

Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked in case of a transport vehicle and one requirement cannot be segregated from another”, the Full Bench held overrul...

Read more at: https://www.livelaw.in/absence-of-fitness-certificate-is-fundamental-breach-of-insurance-policy-5-judges-bench-of-kerala-hc-overrules-3-judges-bench-read-judgment/

ഇൻഷുറൻസ് ഇല്ലാത്ത വണ്ടി കൊണ്ട് ആക്‌സിഡന്റു ഉണ്ടായാൽ ആ വണ്ടി ലേലത്തിൽ വച്ച് വിറ്റു ആ തുക അപകടത്തിന് ഇരയായ വ്യക്തിക്ക് നൽകണം

ഇനി ഇൻഷുറൻസ് ഇല്ലാത്ത വണ്ടി കൊണ്ട് ആക്‌സിഡന്റും ഉണ്ടാക്കിയാൽ നിങ്ങളെ കാത്തിരിക്കുന്നത് ഒരിക്കലും മറക്കാനാവാത്ത പണി : പുതിയ സുപ്രീം കോടതി ഉത്തരവ് പ്രകാരം ഇനി ഇൻഷുറൻസ് ഇല്ലാത്ത വണ്ടി കൊണ്ട് ആക്‌സിഡന്റു ഉണ്ടായാൽ ആ വണ്ടി ലേലത്തിൽ വച്ച് വിറ്റു ആ തുക അപകടത്തിന് ഇരയായ വ്യക്തിക്ക് നൽകണം .സംസ്ഥാനങ്ങൾ 12 ആഴ്ചകൾ കൊണ്ട് ഈ നിയമം നടപ്പിൽ വരുത്താൻ സുപ്രീം കോടതി ഉത്തരവായി .ഇപ്പോൾ ഡൽഹി മാത്രമാണ് ഈ നിയമം നടപ്പിലാക്കുന്നത് .

വാഹന ഇന്‍ഷുറന്‍സ് യഥാസമയം എടുക്കുകയും പുതുക്കുകയും ചെയ്യാത്തവര്‍ക്ക് സുപ്രീം കോടതിയുടെ വകയായി എട്ടിന്റെ പണിവരുന്നു. ഇന്‍ഷുര്‍ ചെയ്യാത്ത വാഹനമിടിച്ചുണ്ടാകുന്ന അപകടത്തില്‍ മരണം സംഭവിച്ചാലും ഇല്ലെങ്കിലും വാഹനം പിടിച്ചെടുത്ത് ലേലം ചെയ്ത് നഷ്ടപരിഹാരം ഇരയ്ക്കുനല്‍കാന്‍ കോടതി നിര്‍ദ്ദേശിച്ചു.

Advocate Appears For Both Accused, Claimant In Motor Accident Case; Tells HC He ‘Forgot’ About His Appearance For Accused

Advocate Appears For Both Accused, Claimant In Motor Accident Case; Tells HC He ‘Forgot’ About His Appearance For Accused [Read Order]

Read more at: http://www.livelaw.in/advocate-appears-for-both-accused-claimant-in-motor-accident-case-tells-hc-he-forgot-about-his-appearance-for-accused-read-order/

No Claim Petition Under MV Act Maintainable When Driver-Cum-Owner Causes Accident Himself And No Other Vehicle Is Involved: SC [

No Claim Petition Under MV Act Maintainable When Driver-Cum-Owner Causes Accident Himself And No Other Vehicle Is Involved: SC [Read Judgment]

Read more at: http://www.livelaw.in/no-claim-petition-under-mv-act-maintainable-when-driver-cum-owner-causes-accident-himself-and-no-other-vehicle-is-involved-sc-read-judgment/

National Insurance Co. Ltd. vs Ashalata Bhowmik on 31 August, 2018

Author: S Nazeer

                                                                                  REPORTABLE
                                       IN THE SUPREME COURT OF INDIA

                                       CIVIL APPELLATE JURISDICTION

                                       CIVIL APPEAL NO. 9100 OF 2018
                                      (Arising out of SLP (Civil) No. 20085 of 2017)


          NATIONAL INSURANCE CO. LTD.                                       ….. APPELLANT

                            VERSUS

          ASHALATA BHOWMIK AND ORS.                                         ….. RESPONDENTS



                                                   JUDGMENT

S.ABDUL NAZEER, J.

1. Leave granted.

2. National Insurance Co. Ltd. has filed this appeal challenging the judgment and order in MACAP No.25/2015 dated 15 th March, 2017 whereby the High Court of Tripura at Agartala has directed the appellant-insurer to pay the compensation to the respondents awarded by the Motor Accidents Claims Tribunal, West Tripura, Agartala (for short 'the Tribunal') in a sum of Signature Not Verified Rs.10,57,800/- with interest at the rate of 8% per annum from the date of filing Digitally signed by SANJAY KUMAR Date: 2018.08.31 14:53:34 IST Reason:

of the claim petition till the date of payment.

3. The first respondent is the mother of deceased Dilip Bhowmik. The second respondent is his wife and respondent Nos. 3 and 4 are his children. On 20.5.2012 at about 7.00 p.m. Dilip Bhowmik was returning from Kathaltali to his house by driving his vehicle bearing No. TR-01-U-0530. When he reached near the bridge of Agartala Railway Station situated on the bye-pass under Amtali police station, he met with an accident and sustained grievous injuries on his person. He was initially rushed to Dr. B.R. Ambedkar Memorial Teaching Hospital, Hapania. Thereafter, he was referred to AGMC and GBP hospital, Agartala, where he was declared dead. At the time of the accident he was aged 43 years. The respondents alleged that the deceased was a businessman and his monthly income was Rs.15,000/-. They filed a claim petition seeking compensation amounting to Rs.68,15,000/-. The claim petition was opposed by the appellant-insurer. The Tribunal passed an award granting total compensation in a sum of Rs. 10,57,800/-.

4. The appellant challenged the said award of the Tribunal before the High Court mainly contending that the deceased himself was the owner-cum- driver of the offending vehicle. He was not a third party within the meaning of the Motor Vehicles Act, 1988 (for short 'the Act'). The accident had occurred due to the negligence of the deceased. Therefore, the appellant, being insurer of the vehicle, was not liable to pay the compensation.

5. The High Court accepted the contention of the appellant that the deceased was not a third party and that the accident had occurred due to the rash and negligent driving of the offending vehicle. However, the High Court directed the appellant to pay the compensation with a rider that the said order shall not be treated as a precedent. On perusal of the policy of the insurance, the High Court in the course of the order observed that indemnification extended to personal accident of the owner-cum-driver was limited to the extent of Rs.2,00,000/-. The finding of the High Court on this question is as under:

"As it has been established by the claimant- respondents that the premium was paid for the personal accident the insurance company is liable to pay the said compensation, even though it is limited to Rs.2,00,000/- to the claimant- respondents. There is no challenge, however, against the determination of the compensation."

6. Learned counsel for the appellant has contended that the deceased himself was driving the offending vehicle and has caused the accident. No other vehicle was involved in the accident. He cannot be treated as a third party. Therefore, the High Court has rightly held that the claim petition filed by the respondents was not maintainable. In view of this finding, the High Court was not justified in directing the appellant to pay the compensation. Learned counsel appearing for the respondents, on the other hand, has sought to justify the impugned order.

7. We have carefully considered the submissions of the learned counsel made at the Bar and perused the materials placed on record. It is an admitted position that the deceased was the owner-cum-driver of the vehicle in question. The accident had occurred due to the rash and negligent driving of the vehicle by the deceased. No other vehicle was involved in the accident. The deceased himself was responsible for the accident. The deceased being the owner of the offending vehicle was not a third party within the meaning of the Act. The deceased was the victim of his own action of rash and negligent driving. A Claimant, in our view, cannot maintain a claim on the basis of his own fault or negligence and argue that even when he himself may have caused the accident on account of his own rash and negligent driving, he can nevertheless make the insurance company to pay for the same. Therefore, the respondents being the LRs of the deceased could not have maintained the claim petition filed under Section 166 of the Motor Vehicles Act.

8. This Court in Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Ors. (2007) 9 SCC 263, was considering a similar case where the owner himself was driving the vehicle which due to his negligence dashed with a tree on the roadside as a result of which he died. The Court held that the claim petition filed by his LRs was not maintainable. It was held thus:-

"10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving. The question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable.

11. Liability of the insurer Company is to the extent of indemnification of the insured against the respondent or an injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of the Motor Vehicles Act, the question of the insurer being liable to indemnify the insured, therefore, does not arise".

9. Therefore, the High Court was not justified in directing the appellant/insurer to pay the compensation determined by the Tribunal. Since the indemnification extended to personal accident of the deceased is limited to Rs. 2,00,000/- under the contract of insurance, the respondents are entitled for the said amount towards compensation. Hence, the appellant is directed to deposit the said sum of Rs. 2,00,000/- with interest @ 9 per cent per annum from the date of the Claim Petition till the date of deposit with the Tribunal within a period of four weeks from today.

10. The appeal is allowed in the aforesaid terms without any order as to costs.

……………………………J.

(N.V. RAMANA) ……………………………J.

(S. ABDUL NAZEER) New Delhi;

August 31, 2018.

All New Vehicles Sold To Have Third-Party Insurance Coverage -3 Years For Cars And 5 Years For Two Wheelers

All New Vehicles Sold To Have Third-Party Insurance Coverage -3 Years For Cars And 5 Years For Two Wheelers [Read Circular]

Read more at: http://www.livelaw.in/all-new-vehicles-sold-to-have-third-party-insurance-coverage-3-years-for-cars-and-5-years-for-two-wheelers-read-circular/

Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Demand of loan amount and not demand for payment of cheque amount and further demand of damages on account of mental torture

🎓🎓Negotiable Instruments Act, 1881, S.138 - Dishonour of cheque - Notice - Demand of loan amount and not demand for payment of cheque amount and further demand of damages on account of mental torture - Demand not in accordance with requirement of the provision of S.138 of the Act - Complaint founded on this demand notice is not maintainable. (Kapil Aggarwal Vs Raghu Vias) 2007(4) Civil Court Cases 106 (Delhi) : 2007(4) Criminal Court Cases 136 (Delhi)🎓🎓

The Negotiable Instruments (Amendment) Act, 2018 [Highlights]

The Negotiable Instruments (Amendment) Act, 2018 [Highlights]

The Negotiable Instruments (Amendment) Act, 2018 was notified on 02-08-2018.

The following amendments have been made —

1) Section 143 — now introduces a new proviso 143A, giving power to a Court to try an offence under S. 138 to order the drawer of cheque to pay interim compensation to the complainant in summary trials/summons case where he pleads not guilty to the accusations in the complaint. Furthermore, the interim compensation shall not exceed 20 % of amount of the cheque and shall be payable within 60 days from date of the order.

2) Recovery of fine shall be same as under Section 421 of the Code of Criminal Procedure, 1973.

3) In cases of acquittal, the Court is now empowered to direct the complainant to repay to the appellant the amount so released, at interest rates as prescribed by RBI.

4) Section 148 — now empowers the appellate court, for appeals against conviction under S. 138, to direct the appellant to deposit a minimum 20 % of the fine/compensation awarded, in addition to interim compensation paid under S. 143A.

Don't forget to check this copy

ആദായനികുതി അടച്ചുകൊണ്ടിരിക്കുന്നവർക്ക് അപകടമരണം സംഭവിച്ചാൽ അവസാനത്തെ മൂന്നു വർഷത്തെ ശരാശരി വരുമാനത്തിന്റെ പത്തിരട്ടി തുക അനന്തരാവകാശികൾക്ക് നഷ്ടപരിഹാരമായി നൽകാൻ കേന്ദ്ര ഗവണ്മെന്റിനു ബാധ്യതയുണ്

Very Important matter ആദായനികുതിദായകർ 
അത്യാവശ്യം
അറിഞ്ഞിരിക്കേണ്ടത്..

കഴിഞ്ഞ മൂന്നുവർഷങ്ങളായി ആദായനികുതി അടച്ചുകൊണ്ടിരിക്കുന്നവർക്ക് അപകടമരണം സംഭവിച്ചാൽ അവസാനത്തെ മൂന്നു വർഷത്തെ ശരാശരി വരുമാനത്തിന്റെ പത്തിരട്ടി തുക അനന്തരാവകാശികൾക്ക് നഷ്ടപരിഹാരമായി നൽകാൻ കേന്ദ്ര ഗവണ്മെന്റിനു ബാധ്യതയുണ്ട്.
താങ്കൾ ഇതിൽ ആശ്ചര്യപ്പെടേണ്ട ഇതു സത്യവും സർക്കാർ അംഗീകരിച്ചതുമാണ്. ഉദാഹരണത്തിന് ആദായനികുതി ദായകനായ A എന്നയാളുടെ കഴിഞ്ഞ മൂന്നു വർഷങ്ങളിലെ  നികുതിവിധേയ വരുമാനം 4 ലക്ഷം, 5 ലക്ഷം, 6 ലക്ഷം പ്രകാരമാണെന്നു വിചാരിക്കുക. അപ്പോൾ ശരാശരി വാർഷിക വരുമാനം  5 ലക്ഷമെന്നു കാണാം. A അപകട മരണത്തിനിരയായാൽ സർക്കാരിൽ നിന്നു ടിയാന്റെ അനന്തിരാവകാശികൾക്കു ലഭിക്കേണ്ട നഷ്ടപരിഹാരത്തുക                            5X 10 = 50 ലക്ഷം രൂപയാണ്.
ഇതേപ്പറ്റി അറിവില്ലാത്തതിനാൽ ആളുകൾ ഈ വൻ സാമ്പത്തികാനുകൂല്യത്തിനായി അപേക്ഷ നൽകാത്തതുമൂലം സർക്കാരിന് വളരെ അപൂർവ്വമായി മാത്രമേ ഇത്തരം കോമ്പൻസേഷൻ നൽകേണ്ടി വരുന്നുള്ളു. അറിവുള്ളവരും, ഈ ആനുകൂല്യം ലഭിച്ചവരും ഇക്കാര്യം പരമരഹസ്യമായി സൂക്ഷിയ്ക്കുന്നതുമൂലം ആദായ നികുതിദായകരുടെ കുടുംബാംഗങ്ങൾക്ക് അർഹമായ വൻതുക അവരറിയാതെ നഷ്ടപ്പെടുകയാണ്.
ബഹു .സുപ്രീം കോടതിയുടെ Civil Appeal No: 9858 of 2013 ലെ വിധി പ്രകാരമാണ് സർക്കാരിന് ഈ ബാധ്യതയുണ്ടായിരിക്കുന്നത്.
നാലു വർഷം കഴിഞ്ഞിട്ടും
ആദായനികുതിവകുപ്പും, പത്ര-ദൃശ്യ മാധ്യമങ്ങളും സുപ്രധാനമായ ഈ വിവരം പൊതുജനങ്ങളിൽ നിന്നൊളിച്ചു വച്ചിരിക്കുകയാണ്.
വിവരങ്ങൾക്കു കടപ്പാട്
Mr: Roy P Kuriakose (Deputy Director of Prosecutions - Retd).  Recieved as forward

Accidental Death & Compensation: (Income Tax Return Required)

Accidental Death & Compensation:
(Income Tax Return Required)
Knowledge is Power....
If a person has an accidental death and the person was filing income tax returns for the last three years, then the government is obliged to give ten times the average annual income of the last three years to that person's family.
Yes, you will be surprised by this, but this is right and it is Government rule.
For example, if someone's annual income is  4 lakh 5 lakhs and 6 lakhs in the first, second and third years respectively, its average income is ten times of five lakhs.. means fifty Lac rupees, family of that person is entitled to receive from the Government.
In the absence of much information, people do not take this claim with the Government.
If any return is missing, mainly last three years, this could lower the claim amount or even no claim because court takes ITR as only evidence.
NO wealth record, FD's; business etc. is given that much importance as compared to ITR in the eyes of law.
Many a time,  people do not file ITRs regularly..or it will be taken lightly..
Due to lack of information the family receives no economic benefits.

Source - forwarded
Section 166 of the Motor act, 1988 (Supreme Court Judgment under Civil/ Appeal No. 9858 of 2013, arising out of SLP (c) No. 1056 of 2008) Dt. 31 Oct. 2013.

Spread the word. Let someone's family benefit.

Advocates legal fee

Remedies under criminal law -Remedies under criminal law

Remedies under criminal law

• Section 406 covers criminal breach of trust under the Indian Penal Code: Under Section 406 of the Indian Penal Code. Seller can file a suit for breach of trust. Seller have to prove that the customer has breached his trust by not paying the money against the product or services provided. “Punishment for criminal breach of trust.—Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both”. Punishment is given to the person who breaches the trust.
• Section 417 of Indian Penal Code: This section deals with the cheating. Cheating can be in any sense between seller and buyer or between any two people.”Punishment for cheating.—Whoever cheats shall be punished with imprisonment of either description for a term which may extend to one year, or with fine, or with both”.
• Section 420 of Indian Penal Code: This section gives relief to the person who is being cheated by someone. This section also includes cheating same as section 417. This section can be one provision on which seller can take action for non payment from the customer.

How To Take Legal Action for Non-Payment of Invoices

he Business.com community wanted to know how to prevent and approach non-paying customers. We answered.

When you do business with a client, you expect to be paid for your labor, product or services. But what happens when those payments are late – or don't come at all? It’s a question that comes up often in the Business.com community. So we went looking for a definitive answer. Fortunately, there are steps to help you handle and even prevent the problem.

Preventing non-payments

Chasing a non-paying customer is often a messy process, so it's best to avoid the issue altogether by taking the following precautions.

1. Research your client.

If you've never worked with a client before, take the time to do research and find out who you're dealing with. Google their name, ask your contacts if they know anything about your new prospect, and see if there are any complaints against them on sites like the Better Business Bureau.

"Most non-payments can be prevented or severely minimized by screening the customers in advance," said Jocelyn R. Nager, president of Frank, Frank, Goldstein & Nager, a professional legal corporation. "Thanks to all information available on the internet, especially the court records, notice of liens and more, most often you can run a risk assessment on your own … and the possibility of non-payment should be reflective of your tolerance for risk." [Looking for a collections agency? Read our recommendations and reviews on our Best Picks page.]

2. Have a contract.

No matter if it's your best friend or one of the most respected business leaders in your industry, always have a written contract in place. The contract should address these legal concerns:

• Payment schedule: e.g., 40 percent deposit, 40 percent milestone payment and 20 percent on completion
• Terms: e.g., payment either 30, 60 or 90 days after the invoice is sent
• Preferred payment method: e.g., checks, credit card or PayPal
• Scope: the exact work you are expected to complete
• Deadline: expected completion date
• Late payment policy: amount charged if invoice is not paid on time

It's essential to get all details in writing so you don't face issues down the road. For instance, if your client is aware they owe fees for overdue expenses, they'll be less likely to flake – and if they do, they'll be forced to pay interest. But if you fail to set up a contract, nothing is guaranteed.

"Often when assisting clients who are being charged interest, late fees or legal fees, I will ask the company for anything in writing and signed by my client that permits them to do so," said Thomas J. Simeone, trial attorney and managing partner at Simeone & Miller LLP. "When they cannot do so, I explain that interest and fees are not part of the contract and therefore are not allowed."

Don't set yourself up for problems that can be easily avoided. You can find service contracts for free and online. Here's one from LawDepot.

3. Ask for a deposit.

If you ask for a portion of the payment upfront, you'll absorb some of the hit. Asking for a deposit or retainer is common for freelancers when negotiating with clients and will help cover the expenses or time that you already put into a project.

According to Tina Willis, owner of Tina Willis Law, the amount you should ask for depends largely on the industry. If workers in your position do not typically charge retainers, consider installment fees, which are paid as you complete certain parts of the job.

"That way, you are less likely to do way too much work before getting paid, or realizing that you are never going to be paid," Willis said.

Approaching non-paying clients

Sometimes, no matter what you do to prevent the issue, you're still left empty-handed. If you've taken all of the precautions and a client still hasn't paid the invoice, you'll need to act fast. Here's how to approach the situation.

1. Weigh your options.                                                                                                            

Ask yourself if chasing down the client is really worth it. If the payment was only a small percentage of your yearly income, it may be better to let it go and write off the client for future business. You could end up spending more money and energy than what the invoice is worth.

"Best-case scenario, if you have a winnable case, and the defendant has the money to pay and doesn't declare bankruptcy, you usually will still have to pay your own attorney's fees to collect," said Willis. "And those can run in the tens or even hundreds of thousands, depending on the complexity of the case."

2. Follow up.

Don't hesitate to send out an email if the invoice has not been paid by the agreed-upon date. There's always a possibility that the invoice was lost or misplaced. Maybe the client was on vacation or had a family emergency. You shouldn't instantly assume that the client is a deadbeat because they didn't pay on time.

Send them a friendly yet firm email reminding them that the invoice is past due and you'd like to resolve the issue as soon as possible. Also ask if they have any concerns with the product or service that you provided, or if they need assistance with the payment process.

3. Talk to a lawyer.

When your client is either resisting or ignoring your requests, and you still think the unpaid invoice is worth the trouble, you should involve a third party. But don't ask a friend or look online for help; meet with an actual attorney who will suggest which legal courses of action you can take against the customer.

According to Willis, once you've tried all else, it's best to hire a lawyer to write a demand letter.

"Many businesses and individuals do not understand the legal obstacles involved in collections," she said. "So, if they are a debtor, and your lawyer contacts them, many will just pay without analyzing further."

You also want to be careful not to overstep the Fair Debt Collection Practices Act, added Roumen Todorov, co-founder and COO of 411 Locals. Involving a legal assistant will help you avoid getting yourself in further trouble.

4. Hire a collection agency.

You could also hire an agency to collect the debt for you. You can find a reputable collection agency like you would with other professionals, such as accountants or lawyers. Ask your network if they know of any collection agencies, or read online reviews to select one for yourself. If that doesn't work, then check out member listings for the Commercial Collection Agency Association or BBB-certified collection agencies.

"A licensed collection agency is experienced, trained and skilled to pursue recovery while trying to maintain a good business relation with your debtor, should you want to keep doing business with them," said Federico Nuccio, FCIB Certified International Credit Professional (CICP) and founder and CEO of Recoupera. "Most agencies will offer you to collect on a contingent fee and on a 'no win, no fee' basis. This way, you can rely on their assistance while not incurring further costs and keep focusing on your business."

How to Handle Non-Paying Clients

he Business.com community wanted to know how to prevent and approach non-paying customers. We answered.

When you do business with a client, you expect to be paid for your labor, product or services. But what happens when those payments are late – or don't come at all? It’s a question that comes up often in the Business.com community. So we went looking for a definitive answer. Fortunately, there are steps to help you handle and even prevent the problem.

Preventing non-payments

Chasing a non-paying customer is often a messy process, so it's best to avoid the issue altogether by taking the following precautions.

1. Research your client.

If you've never worked with a client before, take the time to do research and find out who you're dealing with. Google their name, ask your contacts if they know anything about your new prospect, and see if there are any complaints against them on sites like the Better Business Bureau.

"Most non-payments can be prevented or severely minimized by screening the customers in advance," said Jocelyn R. Nager, president of Frank, Frank, Goldstein & Nager, a professional legal corporation. "Thanks to all information available on the internet, especially the court records, notice of liens and more, most often you can run a risk assessment on your own … and the possibility of non-payment should be reflective of your tolerance for risk." [Looking for a collections agency? Read our recommendations and reviews on our Best Picks page.]

2. Have a contract.

No matter if it's your best friend or one of the most respected business leaders in your industry, always have a written contract in place. The contract should address these legal concerns:

• Payment schedule: e.g., 40 percent deposit, 40 percent milestone payment and 20 percent on completion
• Terms: e.g., payment either 30, 60 or 90 days after the invoice is sent
• Preferred payment method: e.g., checks, credit card or PayPal
• Scope: the exact work you are expected to complete
• Deadline: expected completion date
• Late payment policy: amount charged if invoice is not paid on time

It's essential to get all details in writing so you don't face issues down the road. For instance, if your client is aware they owe fees for overdue expenses, they'll be less likely to flake – and if they do, they'll be forced to pay interest. But if you fail to set up a contract, nothing is guaranteed.

"Often when assisting clients who are being charged interest, late fees or legal fees, I will ask the company for anything in writing and signed by my client that permits them to do so," said Thomas J. Simeone, trial attorney and managing partner at Simeone & Miller LLP. "When they cannot do so, I explain that interest and fees are not part of the contract and therefore are not allowed."

Don't set yourself up for problems that can be easily avoided. You can find service contracts for free and online. Here's one from LawDepot.

3. Ask for a deposit.

If you ask for a portion of the payment upfront, you'll absorb some of the hit. Asking for a deposit or retainer is common for freelancers when negotiating with clients and will help cover the expenses or time that you already put into a project.

According to Tina Willis, owner of Tina Willis Law, the amount you should ask for depends largely on the industry. If workers in your position do not typically charge retainers, consider installment fees, which are paid as you complete certain parts of the job.

"That way, you are less likely to do way too much work before getting paid, or realizing that you are never going to be paid," Willis said.

Approaching non-paying clients

Sometimes, no matter what you do to prevent the issue, you're still left empty-handed. If you've taken all of the precautions and a client still hasn't paid the invoice, you'll need to act fast. Here's how to approach the situation.

1. Weigh your options.                                                                                                            

Ask yourself if chasing down the client is really worth it. If the payment was only a small percentage of your yearly income, it may be better to let it go and write off the client for future business. You could end up spending more money and energy than what the invoice is worth.

"Best-case scenario, if you have a winnable case, and the defendant has the money to pay and doesn't declare bankruptcy, you usually will still have to pay your own attorney's fees to collect," said Willis. "And those can run in the tens or even hundreds of thousands, depending on the complexity of the case."

2. Follow up.

Don't hesitate to send out an email if the invoice has not been paid by the agreed-upon date. There's always a possibility that the invoice was lost or misplaced. Maybe the client was on vacation or had a family emergency. You shouldn't instantly assume that the client is a deadbeat because they didn't pay on time.

Send them a friendly yet firm email reminding them that the invoice is past due and you'd like to resolve the issue as soon as possible. Also ask if they have any concerns with the product or service that you provided, or if they need assistance with the payment process.

3. Talk to a lawyer.

When your client is either resisting or ignoring your requests, and you still think the unpaid invoice is worth the trouble, you should involve a third party. But don't ask a friend or look online for help; meet with an actual attorney who will suggest which legal courses of action you can take against the customer.

According to Willis, once you've tried all else, it's best to hire a lawyer to write a demand letter.

"Many businesses and individuals do not understand the legal obstacles involved in collections," she said. "So, if they are a debtor, and your lawyer contacts them, many will just pay without analyzing further."

You also want to be careful not to overstep the Fair Debt Collection Practices Act, added Roumen Todorov, co-founder and COO of 411 Locals. Involving a legal assistant will help you avoid getting yourself in further trouble.

4. Hire a collection agency.

You could also hire an agency to collect the debt for you. You can find a reputable collection agency like you would with other professionals, such as accountants or lawyers. Ask your network if they know of any collection agencies, or read online reviews to select one for yourself. If that doesn't work, then check out member listings for the Commercial Collection Agency Association or BBB-certified collection agencies.

"A licensed collection agency is experienced, trained and skilled to pursue recovery while trying to maintain a good business relation with your debtor, should you want to keep doing business with them," said Federico Nuccio, FCIB Certified International Credit Professional (CICP) and founder and CEO of Recoupera. "Most agencies will offer you to collect on a contingent fee and on a 'no win, no fee' basis. This way, you can rely on their assistance while not incurring further costs and keep focusing on your business."

latest judgment of the Apex Court, PDCs and Security Cheques are not covered under N.I.Act.

If you decide to file case u/s138 of N.I. Act, do not mention that those cheques were post dated chaques since as per latest judgment of the Apex Court, PDCs and Security Cheques are not covered under N.I.Act.

Post dated cheques are those cheques which are issued by the payer to the payee but are to be drawn only on a future date. In business world, post dated cheques are commonly and conveniently cheque issued for security purposes like loans, lease, advances etc. Let’s take a detailed glimpse on its legality and validity. Meaning of post dated cheque is a cheque which has been dated a later date from the date it has been issued to another person. Post dated cheque validity is arises only from the date it has become payable.

Enforceability of Post Dated Cheques

A post dated cheque is enforceable as a negotiable instrument only when it becomes payable on demand. It is covered under the purview of Negotiable Instrument Act, 1881.  In accordance to the Supreme Court judgement on post dated cheque in 1998, a post dated cheque will be considered as a bill of exchange and not a cheque before the date mentioned on the said instrument/document. It becomes payable only from the mentioned date on the face of the document. By bill of exchange, it means that the document will stay negotiable and will turn into cheque only on the date it will be payable on demand.

Important components of PDC

PDC can become cheque only on the date that is mentioned on the document. Prior to the said, it is just a bill of exchange.
Its validity is only for 3 months from the date that appears on the document.
PDCs are issued either as security cheques for loans or as advance to ensure the trustworthiness of the payer to its supplier.






Applicability of Section 138 of Negotiable Instrument Act

A dishonor of a cheque is a punishable offence under Negotiable Instrument Act. How the Act is applicable on Post Dated Cheques?

It is applicable on PDC once it becomes a cheque i.e. from the date it is payable on demand and the said cheque is issued to meet a legitimate liability, but gets dishonored due to insufficient funds or the reasons specified in the Act.

In accordance to Section 138 of the said Act, the dishonoring of the issued cheque by the bank due to insufficient funds in the issuer’s account or if the specified amount on the cheque is over and above the amount arranged to be discharged by the issuer after making an agreement with the its bank, then such act is a criminal offence and is punishable provided:-

The cheque is presented within 6 months before the bank from the date mentioned on the face of the instrument or its date of validity, whichever is earlier.
The beneficiary demands the drawer to make the payment as so specified in the cheque within the due period of time and such a demand should be made in writing within 15 days from the date the bank informs about the return/dishonor of the given cheque by the drawer.
The drawer of the dishonored cheque couldn’t make the payment of the said amount to the drawee within the due period of the cheque or within 15 days of acknowledging the notice, as the case may be.



Legal Punishment on dishonor of PDC/Cheque

According to the provisions of the said Act, the legal punishment for dishonor of PDC is:-

Imprisonment maximum upto 1 year or
Fine equivalent to two times the amount mentioned on the dishonored cheque or
Both, as decided by the authority


Latest ruling on dishonor of PDC by the Apex Court…..a glimpse

According to the latest judgment of Supreme Court in a cheque bounce case, if the PDC is issued for any advance payment for any purchase/supply of goods/services is not any discharge of security of a legitimate debt, then it will not attract Section 138 of the Negotiable Instrument Act. It clearly indicated that any dishonor of PDC for repayment of EMI of a loan is considered as security and hence it will be covered under the purview of the Act.