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WHAT IS A CHEQUE?Section 6 of Negotiable Instruments Act defines cheque as :‘6. “Cheque“.-A “cheque” is a bill 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. Explanation I.-For the purposes of this section, the expressions-(a) “a cheque in the electronic form” means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics signature) and asymmetric crypto system;(b) “a truncated cheque” means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substitu ing the furtherphysical movement of the cheque in writing.Explanation II.-For the purposes of this section, the expression “clearing house” means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India.’.E-CHEQUEElectronic cheque (e-cheque) is the image of a normal paper cheque generated, written and signed in a secure system using digital signature and asymmetric crypto system. Simply said an electronic cheque is nothing more than an ordinary cheque produced on a computer system and instead of signing it in ink, it is signed using the digital equivalent of ink. After the coming into force of The Negotiable Instruments (Amendment And Miscellaneous Provisions) Act, 2002, legal recognition has been accorded to e-cheques and they have been brought at par with the normal cheques. Now, a ‘cheque’ includes an e-cheque.SECTION 138 NEGOTIABLE INSTRUMENTS ACT 1881Section 138 Negotiable Instruments Act as it is at present after coming into force of The Negotiable Instruments (Amendment And Miscellaneous Provisions) Act, 2002:138. Dishonour of cheque for insufficiency, etc., of funds in the account:Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice. to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:Provided that nothing contained in this section shall apply unless-(a) the cheque has been, presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;(b) the payee or the holder in due course. of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, tothe drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.Explanation.-For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.INGREDIENTS OF OFFENCE UNDER SECTION 138The cheque should have been issued for the discharge , in whole or part, of any debt or other liabilityThe cheque should have been presented within a period of six months or within its validity period whichever is earlier.The payee or holder in due course should have issued a notice in writing to the drawer within 30 days of the receipt of information by him from the Bank regarding the return of the cheque as unpaid.After receipt of the said notice from the holder in due course, the drawer should have failed to pay the cheque within 15 days of receipt of the said notice.GROUNDS FOR DISHONOUR OF CHEQUE“Funds Insufficient” :Section 138 describes the above ground of insufficient funds in the account of the drawer of the cheque in the following words:The amount of money standing to the credit of the account of the drawer on which the cheque is drawn is insufficient to honour the cheque, orThe cheque amount exceeds the amount that can be paid by the bank under an arrangement entered into between the bank and the drawer of the cheque.However, besides the above, the Courts have also accepted some other heads which though expressly do not say ‘insufficient funds’ but are implied to mean the same and a cheque dishonoured on any of these grounds can be used for the purpose of prosecution under section 138 Negotiable Instruments Act. Some of theses grounds are:1. Account Closed: “ It is an offence under section 138 of the Act – Closure of account would be an eventuality after the entire amount in the account is withdrawn – It means that there was no amount in the credit of ‘that account’ on the relevant date when the cheque was presented for honouring the same”This has been held by the Hon’ble Supreme Court of India in-NEPS MICON LTD. AND OTHERS VS. MAGMA LEASING LTD.1999 ISJ (BANKING) 0433; 1999 (1) APEX C.J. 0624; 1999 AIR (SCW) 16372. ‘Stop Payment’ instructions:“Once the cheque has been drawn and issued to the payee and the payee has presented the cheque, ‘stop payment’ instructions will amount to dishonour of cheque.”MAHENDR S. DADIA VS. STATE OF MAHARASHTRAI (1999) BANKING CASES (BC) 133 (17/03/1998)3. ‘Refer to drawer’:“ …….. makes out a case under section 138 of the Negotiable Instruments Act, 1881 which expression means that there were not sufficient funds with the bank in the account of the respondent”LILY HIRE PURCHASE LTD. VS. DARSHAN LAL,(1997) 89 COMPANY CASES 663 (10/01/1997)4. ‘Not a clearing member”:“Cheque returned with endorsement ‘not a clearing member’. To attract the provisions of section 138 NI Act, the cheque should be presented with the bank on which it I drawn- If the cheque is not presented to the bank on which it is drawn, then provisions of sec 138 would not be attracted. If bank on which the cheque is drawn is not a clearing member of the Reserve Bank of India – unpaid return of the cheque would not attract section 138.”CHAIRMAN, JAWAHAR COOPERATIVE URBAN BANK LTD. AND OTHERS VS. RAMANJANEYA ENTERPRISES, HYD. AND ANOTHER2005 (5) CRIMINAL REPORTED JUDGEMENTS (CRJ) 0591;2005 (2) DISHONOUR OF CHEQUE REPORTER (DCR) 01695. Effect of other endorsements:It has been repeatedly held by courts that manifest dishonest intention of the drawer resulting in dishonour of the cheque would lead to prosecution under section 138 Negotiable Instruments Act regardless of the actual ground of dishonour.OTHER NOTABLE ASPECTS OF OFFENCE UNDER 138 N.I. ActCOMPLAINTS AGAINST A COMPANY:Section 141 of Negotiable Instruments Act says:141. Offences by companies:(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:– Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.– Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the state Government, as the case may be, he shall not be liable for prosecution under this Chapter.(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly,Explanation-For the purposes of this section,-(a)”company” means any body corporate and includes a firm or other association of individuals; and(b) “director”, in relation to a firm, means a partner in the firm.The Hon’ble Supreme Court has held that merely being a director of a company is not sufficient to make a person liable under section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact and there is no deemed liability of a director in such cases. AIR 2005 (SCW) 4740; AIR 2005 SC 3512, AIR 2007 SC 1682Supreme Court has also held that for the directors of the company to be made liable for an offence under sec 138, the complaint must contain specific allegations against directors as to how directors are in charge and responsible for conduct of business of company. Mere allegation in complaint that accused persons are directors and responsible officers of the company is not sufficient. AIR 2007 SC 1454COMPLAINT AGAINST PARTNERSAverment in a complaint that accused (partners) at relevant time were in charge of and responsible to the partnership firm for conduct of its business are necessary to initiate process against them for an offence under sec 138 NI Act. In absence of requisite averments in complaint, the offence against accused / partners could not be made out.AIR 2004 SUPREME COURT 4274.DEBT OR LIABILITYExplanation to section 138 makes it clear that ‘debt or other liability’ as mentioned in sec 138 mean a legally enforceable debt or other liability.Various High courts and the Supreme Court have explained this many a time.“Unless issuance of cheque is pleaded and proved to discharge a legally enforceable liability, dishonour is no default entailing criminal proceedings. Complaint in respect of such a cheque issued as a gift, is not maintainable.” 1995 Andh LT 468, 1997 Cr LJ 4237 AP; 1998 (3) Bank LJ 279;“It is only debts alive at the time when the cheque dishonoured are issued. Any subsequent claims in favour of the complainant cannot be made the subject of dispute under section 138 NI Act” 1997 VI AD DELHI 585Supreme Court has held:“When it is a legally enforceable debt or a liability only then section 138 applies and relationship of the parties is not at all a factor germane to the proceedings”2004 (1) APEX C.J. 0273; 2004 (1) CR.C.C. 0693COMPLAINT UNDER 138 CAN BE FILED BY PLEADER / POWER OF ATTORNEY HOLDERCognizance of offence of cheque dishonour – No condition precedent that complaint should have been signed by the payee as holder of cheque – A complaint need not be presented by complainant himself – Pleader or counsel in whose favour vakalatnama has been executed by complainant is competent to file complaint.AIR 2007 (DOC) 286 (RAJ.); 2 (2007) BC 206 (RAJ.)“Section 142 of Negotiable Instruments Act does not specifically state that the payee or holder in due course of the cheque shall lodge the complaint himself; the power of attorney holder who has every authority to sign and act on behalf of the principal can lodge a complaint under sec 138 NI Act.”AIR 2007 (DOC) 51 KER.; 2006 (3) BANK J 425 (KER)DEATH OF ORIGINAL COMPLAINANTDeath of original complainant after filing of complaint – Son of the deceased came to be added as complainant subsequent to taking cognizance of offences – Proceedings do not abate and son of deceased complainant can come on record and continue prosecution.AIR 2007 (DOC) 271 (A.P.) ; 2006 (3) CIVIL COURT CASES 294Offence of dishonour of cheque – Death of complainant at stage of evidence of defence – His legal heirs entitled to continue prosecution.AIR 2007 (DOC) 222 (RAJ.) ; 2007 (1) RAJ L W 4DEATH OF ACCUSEDDishonour of cheque – Proceedings in the complaint alleging offence under section 138 cannot be initiated against legal heirs of the person who had issued the cheque.AIR 2007 (DOC) 58 (P&H) ; 2006 (3) BANK J 327 (P&H)SUCCESSIVE PRESENTATION OF CHEQUES“ A cheque can be presented any number of times during the period of its validity by payee. On each presentation of the cheque and its dishonour a fresh right – and not cause of action – accrues in his favour. He may, therefore, without taking pre-emptory action in exercise of his such right under Cl (b) of sec. 138, go on presenting the cheque so as to enable him to exercise such right at any point of time during the validity of the cheque.”AIR 1998 SUPREME COURT 3043SETTLEMENT DURING TRIALThe payment by the accused of the full cheque amount during the pendency of trial under sec 138 does not absolve the accused of his liability for the offence of dishonour of cheque. However, the courts take a lenient view in such cases and the accused is set free or punished lightly.AIR 2007 (DOC) 264 DELHI is an illustration of such cases.The Delhi High Court has also held that if during the pendency of a dispute under sec 138 NI Act the parties enter into a settlement, it should be respected by the courts as proceedings under sec 138 are quasi criminal in nature.AIR 2007 (DOC) 264 (DEL.)EXAMINATION OF COMPLAINANT ON OATH“The non-obstante clause in sec. 142 or 145 of the NI Act does not override the provisions of sec. 200 CrPC and it is mandatory for the magistrate to examine the complainant who has filed the same under sec 138 of the NI Act though with an affirmation as regards truthfulness of the contents of the complaint. It, therefore, follows that the magistrate is obliged and duty bound to examine upon oath the complainant and his witnesses before issuance of process under section 204 of CrPC though there is a solemn affirmation at the foot of the complainant by the complainant.”AIR 2007 (NOC) 1372 (BOM) ; 2007 (3) AIR BOM R 181 (DB)POST DATED CHEQUEPost dated cheque – Is not a “cheque” on the date it is drawn – It becomes a “cheque” only on the date written on it – Till that date post-dated cheque remains a bill of exchange.The post-dated cheque becomes a cheque within the meaning of section 139 on the date which is written thereon and not the 6 months period is to b reckoned for the purposes of proviso (a) to sec 138 from the date. Thus in case of a pot-dated cheque, six months period is to be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee.AIR 2001 SUPREME COURT 1315COMPLAINT AGAINST PARTNERSMATERIAL ALTERATION:Section 87 of Negotiable Instruments Act provides as under:87.Effect of material alteration:Any material alteration of a negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties:Alteration by indorsee _ And any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respectof the consideration thereof.The provisions of this section are subject to those of sections 20, 49, 86 and 125.Respondent issued a blank cheque without mentioning the date and amount and sent it with a letter requesting complainant to present it after a month – Act of complainant in filling up amount portion and date was a material change and it could not be enforced even though it was issued for a legal liability – Alteration without the consent of the party who issued the cheque rendered cheque invalid.2004 (1) CRIMES 567 (AP)Every alteration is not material alteration – Only such alteration which would adversely affect interest of the other side could be called material alteration.AIR 2007 (NOC) 1082 BOM. ; 2007 (2) AIR BOM R 442Date altered by adding 1 before ‘2’ in the month to make it appear that cheque was issued on 25.12.1993 so as to bring the cheque within validity period. These are material alterations. Accused liable to be acquitted in such cases.2005 (2) ISJ (BANKING) 115; 2005 (2) DCR 37DEMAND NOTICEProviso to Section 138 NI Act provides as follows:Provided that nothing contained in this section shall apply unless-(a) the cheque has been, presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;(b) the payee or the holder in due course. of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to thedrawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteendays of the receipt of the said notice.Explanation.-For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.Supreme Court has held time and again that a cause of action for filing a complaint under section 138 accrues to the drawee of a cheque only after a notice is issued to the drawer within the prescribed period after receipt of information by him regarding the dishonour of cheque and the subsequent failure of the drawer to make the cheque payment within the prescribed time, i.e. 15 days from the receipt of notice by him.AIR 1998 SUPREME COURT 3043Demand notice – Sent under certificate of posting returned with endorsement ‘not claimed’ – Is deemed to be servedAIR 2007 (NOC) 942 (KAR); 2007 (2) AIR KAR R 199Demand notice – Giving of notice in some address is not enough for complying with statutory requirement of notice – Notice should be given in the correct address – Further, mere giving of notice will not be sufficient when notice is returned stating that it was reserved because it is not the correct address or door is locked in redirected address – Return of acknowledgement card with such endorsement – Notice is not served.AIR 2007 (DOC) 131 (KER) ; 2007 (1) KLJ 10Demand notice – Service of – Can be proved only by submitting postal receipt or by calling record of post office – In absence of postal receipt no presumption can be drawn in favour of applicant for sending said notice through registered post – Acknowledgement due receipt without any letter number or postal receipt number mentioned in it – Not having any seal of post office either at the time of sending to addressee or at the time of returning to the sender, cannot be accepted as compliance with provisions of sec 138 (b) of the Act.AIR 2007 (DOC) 253 (M.P.); 2007 (51) AIC 239BLANK CHEQUERespondent issued a blank cheque without mentioning the date and amount and sent it with a letter requesting complainant to present it after a month – Question whether blank cheque will come within the definition of cheque? – If the cheque is not drawn for a specified amount it would not fall within a definition of bill of exchange – Act of complainant in filling up amount portion and date was a material change and it could not be enforced even though it was issued for a legal liability – Alteration without the consent of the party who issued the cheque rendered cheque invalid.2004 (1) CRIMES 567 (AP)Admission of signature on the cheque is not equivalent with admission of execution – Right of the accused to contend that a blank signed cheque was mis-utilised by the payee cannot be taken away by such mere admission of signature.AIR 2007 (DOC) 195 (KER.); 2007 (1) KLT 525 (KER)Accused entered into security arrangement with complainant for sale of its product – Accused issued blank cheques as security to security agency agreement – No debt or liability existed when cheques were handed over to drawee complainant – Complaint based on blank cheque issued towards security is not maintainable.AIR 2007 (DOC) 269 (DEL); 2 (2007) B C 69PRESUMPTION UNDER SECTION 139 NI ACTSection 139 Negotiable Instruments Act provides:139. Presumption in favour of holder:It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.“The effect of these presumptions is to place the evidential burden on the accused of proving that the cheque was not received by the complainant towards the discharge of any liability. Because both sections 138 and 139 require that the court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn…it is obligatory on the courts to raise this presumption in every case where the factual basis for the raising of this presumption had been established. It introduced an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused.”AIR 2001 SUPREME COURT 3897(C) By S. Chopra for Vakilno1.comDishonour of Cheque – Section 138 of the Negotiable instruments Act

It is not compulsory but advisable.YC combinator say that themselves in the application form (faq questions). in fact, I did the work for you, let me quote what exactly they have to say about that:Yes. We regularly accept solo founders. That said, our advice remains that one-person startups are tough and you're more likely to succeed with a cofounderThere is one famous solo founder that successfully applied and then went on to successfully run his startup to stardom. Yes, the great Drew Houston from Dropbox.Drew later accepted Paul Graham’s advise and got himself a “co-founder” to start the 2007 cycle at YC.We strongly encouraged Drew to get a cofounder, and he found Arash before the summer 2007 cycle began. Arash turned out to be the perfect cofounder. (1)My startup had a solo founder too, and we applied for the 2014 batch, with me as a “co-founder”.Did not get accepted unfortunately.I read Drew Houston’s application for inspiration then, and I still remember the answer Drew gave on the last question of the form:Please tell us something surprising or amusing that one of you has discovered.(The answer need not be related to your project.)The ridiculous things people name their documents to do versioning, like "proposal v2 good revised NEW 11-15-06.doc", continue to crack me up.He’s the kind of example of thinking out of the box inside the box, and it’s no wonder why he got accepted even though he started “solo”.So, yeah, apply if that’s what you like, but make sure you have a vision like Drew’s and it can be distilled throughout the questions, even the silly ones.

1. Google X:Google X was a version of the Google home page modeled specifically for Apple Mac users. The bottom of the page read, “Roses are read, Violets are blue. OS X Rocks. Home page to you”. Its hard to imagine Google crafting anything to Apple today, unless it’s a court document, and in fact Google X only survived for one day.2. Google Catalog:Google Catalogs, a search engine for print catalogs, languished in Beta from 2001 until 2009, when Google put it out of its misery, finally realizing the uselessness of a product that puts catalogs online, when only people who can’t use the Internet still use catalogs.3. Web Accelerator:Google’s downloadable Web Accelerator (a proxy server used to reduce web access time via caching technologies) had some terrible bugs and privacy issues. Let’s start with a simple example; it prevented users from watching YouTube videos. Google closed it in 2008.4. Google Video Player:Google Video player was a standalone desktop application for playing Google video files. Google hasn’t fared well at entering a market late unless it offers a clear improvement on existing products, and it turned out the world didn’t need yet another video player with no real improvements.5. Google Answers:Google’s answer to Yahoo Answers, literally. Google employed paid researchers and asked users to bid for a response to their questions. But users, it seems, preferred their information free, even if free isn’t always best.6. Google Wave:Google Wave was supposed to reinvent email; bringing old-fashioned electronic mail together with new technologies like instant messaging and social media. It launched to huge hype, but users found it overly complicated and it died shortly after.7. Wiki Search:SearchWiki turned Google Search into a Wiki – logged-in users could move results up and down or delete results they didn’t like. Searchers can still start a result to mark it as a favorite, but the other wiki options went to the chopping block. Let’s see if they will be reintroduced in Google +1 updates.8. Google Audio Ads:Google Audio Ads, a radio-based advertising platform, which would offer the powerful metrics of search-based advertising to broadcasters, however, measuring performance proved difficult which led Google to close it down in 2009.9. Dodgeball:Google bought Dodgeball; a mobile search networking services in 2005. The founder went on to leave Google and form Foursquare, now the leader in the location-based check-ins and social location advertising. Dodgeball closed down, FourSquare is booming, and Google has recently launched a new mobile app; Latitude. However, Latitude does not seem to be gaining popularity and is now being overshadowed by Facebook Check-In as well.10. Jaiku:Jaiku is to Twitter as Dodgeball is to FourSquare. Google purchased the micro-blogging services in 2007 but It failed to take off. This was not the first time in history that a market leader was missing the next technology bus.11. Google Notebook:Google notebook was a browser based application that allowed users to cut, paste, save and share text, links and images from the web to personal “notebook”. This functionality has been replaced by Google Docs.12. Google Page Creator:Google page creator was a tool to help users to create web pages, which were hosted on Google’s Servers. Google canned the product in 2008 to focus on Google Sites (not the first time it suffered from feature overlap).13. Google Buzz:In another attempt to keep up with Twitter and Facebook, Google launched this social network as an opt-out service for Gmail users, many of whom reacted angrily. Can Buzz overcome privacy concerns and slow growth? With the integration of Google +1, only time will tell.From : Failed Google ProjectsHere's an infographic : Google Flops & Failures - The Failed Google Graveyard