Law · Negotiable Instruments Act, 1881
Mr. Rohan's cheque to M/s. TechTools is dishonored due to 'Funds Insufficient'. While M/s. TechTools files a case under Section 138 of the NI Act, Mr. Rohan sues Metro Bank under Section 31 claiming he had sufficient balance. Which statement correctly identifies the basis of the proceedings and the nature of damages claimed against the bank?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Criminal Basis: Section 31; Claim Basis: Section 138; Type of Damage: Nominal damages only.
- 2Criminal Basis: Section 138 (Civil Suit); Claim Basis: Section 31 (Criminal Offense); Type of Damage: Liquidated damages.
- 3Criminal Basis: Section 138 against the drawer; Claim Basis: Section 31 against the bank; Type of Damage: Compensatory damages for loss of credit, reputation, and costs.✓
- 4Criminal Basis: Section 31; Claim Basis: Section 138; Type of Damage: Punitive damages against the bank.
Correct answer
Criminal Basis: Section 138 against the drawer; Claim Basis: Section 31 against the bank; Type of Damage: Compensatory damages for loss of credit, reputation, and costs.
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