CHEQUE BOUNCE-- help me

A central govt. employee gives 5 signed blank cheques to a family friend to secure a bank loan in the year 2005.  Loan not secured, friend says cheques lost. Now in March 2008, he deposits one of those cheques for an amount of Rs.1,20,000/- when the account has already been closed.  Sends a lawyer's notice saying the cheque was given to him now in March, 2008 and the same was returned by the bank stating PAYMENT STOPPED BY THE DRAWER.  So the drawer would be prosecuted under the Negotiable Instruments Act if the said cheque amount is not paid within 15 days ?. What can be done ? Please help.