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Best Lawyer for Cheque Bounce Cases in Delhi

Best Lawyer for Cheque Bounce Cases in Delhi


Dua’s & Dua’s, Advocates & Consultants, led by the Best Criminal Lawyer in Delhi, is renowned for its expertise in handling cheque bounce cases. The firm’s foundation is built on a strong legal knowledge base, exceptional research skills, and effective advocacy.

With a focus on Cheque Dishonor Cases, the team’s diverse expertise and extensive experience contribute to consistently achieving positive outcomes for clients. From representing clients across various forums, including Delhi District Courts to the Hon’ble Supreme Court of India, the firm showcases a comprehensive and versatile approach to Cheque Bounce Cases.

Lead Counsel Advocate Rajal Rai Dua has successfully argued various Cheque Bounce Matters before the Delhi High Court. 

Cheque Bounce Case and Chit Fund

The Author is the Best Lawyer for Cheque Bounce Cases. The cheque dishonor cases based on Chit Fund /Kitty are bound to fail due to inherent illegalities. In most of the Cheque Dishonour case or cheque bounce cases based on Chit Fund , the complainant states that he/she or they invested into the alleged chit fund being run by the accused allegedly.

This takes us to the next derivative, which is if, the alleged chit fund is legal and legitimate or not. In case the alleged transaction is not in consonance and conformity with the law of the land, the transactions so alleged will be rendered illegal and hence will become an enforceable debt leading to the crash of the Complaint.

Lets refer to the Chit funds Act`1982 . The act has become relevant as any kind of chit fund being run in India is governed by the said act. It is a central act and extends to the whole of India.

After going through the relevant sections of the Act, it is very clear that no chit fund can run without the sanction of the state government, without the registration with the State Government, without depositing the 50% amount of the gross chit fund, the subscribers are supposed to obtain receipts of the instalment amounts, all the proceedings must be recorded and must be signed by the subscriber as well as be Foreman in presence of two witnesses. It further mandates that chit fund agreement must be signed by the foreman and the subscriber as well as two witnesses in duplicate and one copy shall be retained by the subscriber.

However in the matter, the contravention of above provisions of law may be brought to light while cross examining the Complainant.

So in case of the clear cut admission of the complainant that the alleged committee, if any was there, it was illegal in contravention of the law and no derivative of the said committee can be enforced through the court of law being illegal. These are the fruits of the poisonous tree.

Thus, exhaustive provisions have been laid out in the Chit Funds Act, laying out mandatory requirements regarding registration and documentation at each and every stage, as also the volume of business, to ensure protection of investors and so that same does not become an avenue for illegal and unaccounted transactions. However, it is clear that the alleged committees were being run, without any registration or sanction and in violation of the maximum prescribed chit amount, in clear contravention to the provisions of the Chit Funds Act.

In light of the above the question which again begs consideration is whether such an agreement between the parties, which is clearly forbidden by law can give rise to legally enforceable contractual obligations.

To sustain a prosecution u/s 138 of the Act, the debt or liability should be legally enforceable. In other words, there should be a lawful contract between the parties. A contract, is an agreement that is enforceable by law (as per Section 2(h) of the Indian Contract Act, 1872).As per Section 10 of the Indian Contract Act, 1872:

“10. What agreements are contracts.–All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void”.

As to what objects are lawful, Section 23 of the Indian Contract Act, reads as :-

“23. The consideration or object of an agreement is lawful, unless – it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.”

In light of the above the question as to whether the agreement to contribute made by a subscriber to an unregistered chit fund being run in violation of the statute, is legally unenforceable, has to be answered in the affirmative.

Such an agreement, the object of which is forbidden by law, if given effect to would defeat the provisions of statute i.e. Chit Funds Act. Section 4 & 5 of the Chit Funds Act, 1982, in categorical terms, prohibit running of a chit fund or proposing subscriptions in a chit fund without sanction. Also there is clear violation of Section 13 of the Chit Funds Act as discussed above.

It is thus clear that running a chit/committee is clearly forbidden by law. Any such agreement between a subscriber and a foreman therefore, is forbidden by law and if given effect would defeat the provisions of the Chit Funds Act, 1982.

In such circumstances, the object of the agreement cannot be said to be lawful, as a result of which the agreement, having an illegal object, is therefore void ab initio.

Ignorance of statute, is no excuse and the complainant, knowing well, the illegality of the committee, still put in money in the same at his own peril.IN such cases, the doctrine of pari delicto would apply and the Hon`ble Courts are legally bound to  refuse to enforce an illegal agreement at the instance of a person who is himself a party to an illegality or fraud. In such cases if the agreement to pay subscription, to what is clearly an illegally run chit fund, is upheld, that would set a dangerous precedent and thereby incentivize the running of such illegal schemes.

Best Criminal Lawyer

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Cheque Dishonour & Cash Transactions

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