Legal Question in Civil Litigation in India

Case: I had kept Four cheques for my wife�s medical treatment in the month of August 2012, Amount was written on the cheques and it was duly signed.However name of bearer was not written on it.In the month of September 2012 those cheques were stolen by a known person who used to come to our house .As soon as I got to know about the stolen cheques I immediately blocked it in the bank but did not complaint to police.Later in the month of April 2013 that cheque was presented to bank for encashment by writing someone�s name.Sufficient amount was present in my account for encashment but since cheques were locked bank dishonoured cheque for the reason that it is blocked.Then that person presented it to court for filing case under section INA 138 and also presented rest of the 3 cheques in the similar way with through various other persons as bearer.When I got to know that he has given these cheques to court,I filied a complaint to police through post.No action was taken by police.I would like to know about following points:

1.Since the reason of dishonor of cheques by bank was locking of cheques and sufficient amount was present in the account,does this come under section 138.

2.Since writing of name was not written by me it will have a writing difference. Can it be proven that it is not issued to that person.

3.That person has shown that I had purchased some material from his shop against these cheques.He has shown some vouchers/bills for the same which does not have my signatures.will it be considered.

4.Whether our case is weak or strong.

5.We should negotiate or fight the case.

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