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A person (payee) signs a blank cheque and gives the same to another person (holder) and the holder fills up the blank space pertaining to amount and date and presents the same in his bank account and it is dishonoured. In such a situation, which of the following statement would be correct?
Correct Answer: D — The holder will be entitled to maintain a complaint filed upon the cheque being dishonoured.
Explanation:
The correct answer is that the holder will be entitled to maintain a complaint filed upon the cheque being dishonoured.
In India, the holder can file a complaint under Section 138 of the Negotiable Instruments Act, 1881, which deals with dishonour of cheques due to insufficient funds. The holder must issue a legal notice to the drawer demanding payment within fifteen days.
The holder would need to provide evidence that the cheque was issued for a debt or liability, that it was presented within the validity period, and that it was dishonoured due to insufficient funds or other specified reasons. Upon successful prosecution, the drawer could face fines and imprisonment depending on the gravity of the offence.