Negotiable Instruments Act judiciary-2

CEO not liable for cheque dishounoured which was issued after her resignation

Smt. Dharna Goyal @ Dharna Garg Vs Aryan Infratech Pvt. Ltd. (Delhi High Court)

Smt. Dharna Goyal @ Dharna Garg Vs Aryan Infratech Pvt. Ltd. (Delhi High Court) Perusal of the complaint shows that the allegation of issuing the cheque is against accused No.1 from the account maintained by accused No. 1 and allegations of signing are against accused No. 2, as authorized signatory of accused No.1. The allegation [&hellip...

Read More

Dishonour of Cheque: Drawee need not wait for 15 days if intention of drawer to not pay is clear

Ravi Dixit Vs State of U.P. and Another (Allahabad High Court)

Ravi Dixit Vs State of U.P. and Another (Allahabad High Court) Learned counsel for the petitioner has submitted that the summoning order is without compliance of provisions of Section 138 of the Act, 1881; the application has been falsely implicated due to enmity and financial dispute with the complainant and that cheques were dishonoured...

Read More

SC explains Territorial jurisdiction in a cheque bouncing case

Himalaya Self Farming Group & ANR. Vs. Goyal Feed Suppliers (Supreme Court of India)

Supreme Court states that as per section 142(2)(a) of the Negotiable Instrument Act, the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated, will have jurisdiction to try the offence, if the cheque is delivered for collection through an account....

Read More

Director not responsible for cheque issued & Dishonoured post his retirement

Alibaba Nabibasha Vs Small farmers agri-busines Consortium & ORS (Delhi High Court)

Alibaba Nabibasha Vs Small farmers agri-busines Consortium & ORS (Delhi High Court) The Petitioner ceased to be the director of the respondent No. 2 with effect from 27th October 2010. The resignation of the petitioner was also notified to MCA. The cheques, totaling to INR 45 Lakhs, were issued on 31st December 2018 by respondent [&he...

Read More

HC upheld conviction in Cheque Bouncing Case

Rakesh Kumar Vs Jasbir Singh and another (Punjab and Haryana High Court)

Bouncing of Cheque Considered as Offence Under NI Act which leads to Imprisonment upto 2 Years alongwith compensation amount of cheque alongwith interest @9%...

Read More

No Prosecution u/s 138 of NI Act for Dishonour of Cheque due to Difference in Figures & Words

Shree Tyres Vs State (Patiala House Court of Delhi)

The issue under consideration is whether prosecution u/s 138 of Negotiable Instrument Act can be levied for dishonour of a cheque on cheque having difference in the amount in figures and words?...

Read More

Cheque not a Valid Instrument if Amount is not Specified

M/s. Shree Tyres Vs. State (Patiala House Courts : New Delhi)

Delhi High Court has held that an instrument cannot be termed as a 'Cheque' if it does not specify a certain amount of money to be paid to a certain person. Thus, if the amount written on the instrument is 'absurd', the same cannot be called a 'cheque' and will not draw any legal consequences under the Negotiable Instruments Act....

Read More

SC refuses to interfere with period of validity of cheque

In re Cognizance for Extension of Limitation (Supreme Court)

In re Cognizance for Extension of Limitation (Supreme Court) With reference to the prayer, that the period of validity of a cheque be extended, we find that the said  period has  not  been  prescribed by  any Statute but  it  is  a  period  prescribed by the Reserve Bank of India under Section 35A of the Banking […]...

Read More

No Prosecution of Chairman/Director without Impleading Company as Accused – Section 138 NI Act

Bhupendra Suryawanshi Vs Sai Traders (Madhya Pradesh)

Bhupendra Suryawanshi Vs Sai Traders (Madhya Pradesh) The proviso to Section 138, however, is all important and stipulates three distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable. The first condition is that the cheque ought to have been presented to the...

Read More

Covid 19- SC extends limitation prescribed under Arbitration & NI Act

In re Cognizance for Extension of Limitation (Supreme Court)

It  is hereby ordered that all periods of limitation  prescribed  under  the  Arbitration  and  Conciliation  Act, 1996 and under section 138 of the Negotiable Instruments Act 1881 shall  be  extended  with  effect  from  15.03.2020  till  further  orders to be passed by this Court in the present proceedings....

Read More

NI Act: No mandatory requirement of notice to directors of Company

Krishna Texport & Capital Markets Ltd. Vs ILA A. Agrawal & Ors. (Supreme Court)

According to Section 138, where any cheque drawn by a person on an account maintained by him is returned by the Bank unpaid for reasons mentioned u/s-138, such person shall be deemed to have committed an offence....

Read More

NI Act | Section 138 Proceedings Not Maintainable against Independent Non-Executive Directors

Sunita Palta & Ors. Vs Kit Marketing Pvt. Ltd. (Madras High Court)

Sunita Palta & Ors. Vs. Kit Marketing Pvt. Ltd. (Madras High Court) Non-Executive Directors are, therefore, persons who are not involved in the day-to-day affairs of the running of the company and are not in charge of and not responsible for the conduct of the business of the company.’ Admittedly, the petitioners are neither the...

Read More

Production of Books not Relevant in Cheque Bounce Cases | Section 138 | NI Act

D. K. Chandel Vs Wockhardt Ltd. & Anr. (Supreme Court)

D. K. Chandel Vs Wockhardt Ltd. & Anr. (Supreme Court) The Supreme Court has observed that the production of the account books/cash book may not be relevant in a criminal case filed under Section 138 of the Negotiable Instruments Act. As held by the Trial Court as well as by the High Court that the […]...

Read More

Section 138 Prosecution not hit by bar created by Section 69(2) of Partnership Act

Narendra Vs Balbirsingh (Bombay High Court)

The prosecution of an accused under Section 138 of the Negotiable Instruments Act, 1888, is not hit by the bar created by sub-section (2) of Section 69 of the Indian Partnership Act, 1932....

Read More

Sec 138 NI Act case cannot be quashed for mere Acceptance of Corporate Insolvency Resolution

Ajay Kumar Bishnoi Vs Tap Engineering (Madras High Court)

Where the proceedings under Section 138 of the Act had already commenced and during the pendency, the company gets dissolved, the directors and the other accused cannot escape by citing its dissolution. What is dissolved is only the company, not the personal penal liability of the accused covered under Section 141 of the Negotiable Instru...

Read More

NI Act: Section 148 is Retrospective, but 143A is Prospective: SC

Surinder Singh Deswal Vs Virender Gandhi & Anr.  (Supreme Court)

Surinder Singh Deswal Vs Virender Gandhi & Anr.  (Supreme Court) Court  was considering provisions of Section 143A of the N.I. Act which was inserted by the same Amendment Act 20 of 2018 by which Section 148 of the N.I. Act  has been inserted. This Court took the view that Section 143A is prospective in nature […]...

Read More

Section 138 NI Act: Legal Heirs Can Challenge Conviction of deceased Convict

M. Abbas Haji Vs. T.N. Channakeshava (Supreme Court of India)

The legal heirs, in such a case, are neither liable to pay the fine or to undergo imprisonment. However, they have a right to challenge the conviction of their predecessor only for the purpose that he was not guilty of any offence....

Read More

Sec. 138 NI Act Proceedings cannot be quashed for mere non service of notice within Statutory Period

Kishore Sharma Vs Sachin Dubey (Supreme Court of India)

Kishore Sharma Vs Sachin Dubey (Supreme Court of India) The present appeal takes exception to the order dated 15th November, 2018 passed by the High Court of Madhya Pradesh, Indore Bench, thereby it allowed the application filed by the respondent for quashing of proceedings instituted against him under Section 138 of the Negotiable Instru...

Read More

NI Act: Section 143A is prospective in nature: SC

G.J. Raja Vs Tejraj Surana (Supreme Court in India)

G.J. Raja Vs Tejraj Surana (Supreme Court in India) The provisions contained in Section 143A have two dimensions. First, the Section creates a liability in that an accused can be ordered to pay over upto 20% of the cheque amount to the complainant. Such an order can be passed while the complaint is not yet […]...

Read More

Company includes partnership firm | Section 141 | Negotiable Instruments Act

G Ramesh Vs Kanike Harish Kumar Ujwal & Anr. (Supreme Court of India)

G Ramesh Vs Kanike Harish Kumar Ujwal & Anr. (Supreme Court of India) In terms of the explanation to Section 141, the expression ‘company’ has been defined to mean any body corporate and to include a firm or other association of Sub-section (1) of Section 141 postulates that where an offence is committed under Section [&he...

Read More

Negotiable Instrument Act covers not only debt but also covers Later Liability

Madan Tiwari Vs Yashwant Kumar Sahu (Chhattisgarh High Court)

Madan Tiwari Vs State of Chhattisgarh (Chhattisgarh High Court) Purport of the special law under the Negotiable Instruments Act is to ensure that the promise to pay is abided by the person so promising. The provision under Section 139 of the NI Act is that it shall be presumed that the holder of a cheque […]...

Read More

Section 143A is effective prospectively & s. 148 is effective retrospectively to pending cases

M/s. Ginni Garments and anr. Vs M/s Sethi Garments (Punjab & Haryana High Court)

If the provisions are substantive in nature then the same cannot be applied Retrospectively to the pending cases. However, if the provisions are procedural in nature then the same has to be applied to all the cases, including the one pending before the Court....

Read More

Non-Filing of I-T Returns not necessarily mean no source of Income

Shrimati Ragini Gupta Vs. Piyush Dutt Sharma (Madhya Pradesh High Court)

Non-filing of Income Tax Return by itself would not mean that the complainant had no source of income and thus, no adverse inference can be drawn in this regard only because of absence of Income Tax Return....

Read More

Test of Proportionality must guide in determining if presumption under Sec.139 was rebutted

Anss Rajashekar Vs Augustus Jeba Ananth (Supreme Court)

It was held that in determining whether the presumption has been rebutted, the test of proportionality must guide the determination. The standard of proof for rebuttal of the presumption u/s 139 is guided by a preponderance of probabilities. ...

Read More

Once Presumption U/s 139 is drawn, Complainant need not prove source of fund till accused discharges his burden

Rohitbhai Jivanlal Patel Vs State of Gujarat & Anr. (Supreme Court)

SC held that once the court has drawn presumption of existence of legally enforceable debt as per Section 139 of the NI Act, factors like source of funds are not relevant if the accused has not been able to rebut the presumption....

Read More

Unregistered Partnership Firm can file Suit against Dishonour of Cheque: Delhi HC

M/S. Hindustan Infrastructure Construction Corporation Limited & Anr. Vs M/S. R.S. Woods International & Ors. (Delhi High Court)

In the instant case, the respondent is seeking enforcement of the liability of the petitioners created under Section 30 and 37 of the Negotiable Instruments Act, 1881 as the cause of action for the plaint is based on the dishonour of the said cheques. Since, the suit is not based on any contract between the parties, the bar under Section ...

Read More

SC on Rebuttal by Accused against Presumption in Cheque Bounce Cases

Kishan Rao Vs Shankargouda (Supreme Court Of India)

Kishan Rao Vs Shankargouda (Supreme Court Of India) In the present case, the trial court as well as the Appellate Court having found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank of the presumption under Section 139 was rightly raised which was not […]...

Read More

Advocate Fees based on a share in subject matter is professional misconduct & cannot be the basis of a Complaint U/s. 138 of NI Act: SC

B. Sunitha Vs. The State Of Telangana & Anr. (Supreme Court of India)

Mere issuance of cheque by the client may not debar him from contesting the liability. If liability is disputed, the advocate has to independently prove the contract. Claim based on percentage of subject matter in litigation cannot be the basis of a complaint under Section 138 of the Act....

Read More

Cheque dishonour – Section 138 complaint not maintainable if Bank A/c was locked by statutory authority

Ceasefire Industries Ltd. Vs State & Ors. (Delhi High Court)

The provision contained in section 138 of the N.I. Act makes it clear that it is not every return of a cheque unpaid which leads to prosecution of an offence under the said provision of law. ...

Read More

Compensation recoverable in Cheque Bounce case even If ‘Default Sentence’ Has Been Suffered: SC

Kumaran Vs State of Kerala & Anr. (Supreme Court of India)

So long as compensation has been directed to be paid, albeit under Section 357(3), Section 431, Section 70 IPC and Section 421(1) proviso would make it clear that by a legal fiction, even though a default sentence has been suffered, yet, compensation would be recoverable in the manner provided under Section 421(1)....

Read More

Husband Not Liable For Cheque Issued By Wife U/s 138 of NI Act, 1881

Harshad Manubhai Malavaiya Vs. State Of Gujarat (Gujarat High Court at Ahmedabad)

As the applicant is not a signatory to the cheque, no liability can be fastened upon him for the dishonour of the cheque under Section 138 of the Negotiable Instruments Act....

Read More

NI Act: Order Imprisoning for Default to Pay Compensation Appealable

P.S. Mitra Partha Sarathi Mitra Vs Manor Travels Private Limited and Another (Calcutta High Court)

The short question which falls for decision in this case is whether a judgment and order of conviction and sentence of imprisonment till the rising of the Court and an order of compensation imposed under Section 357(3) of the Code of Criminal Procedure with a direction to undergo imprisonment in default of payment of such compensation is ...

Read More

Sec.138 of N.I.Act – Prosecution to be launched in Jurisdiction of court where cheque was dishonored- SC

Dashrath Rupsingh Rathod Vs State of Maharashtra & Anr. (Supreme Court of India)

Honourable Supreme Court has held in the case of Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. that all the pending cases of cheque bouncing under Negotiable Instrument Act to be transferred to the place from the cheque is issued....

Read More

Revised SC guideline in Cheque Bounce Cases U/s. Section 138 (NI Act)

Indian Bank Association and Others Vs Union of India (Supreme Court of India)

Notice via email also- MM/JM should adopt a pragmatic and realistic approach while issuing summons. Summons must be properly addressed and sent by post as well as by e-mail address got from the complainant....

Read More

In case of Joint account only drawer of cheque liable for prosecution U/s. of N.I. Act : SC

Mrs. Aparna A. Shah Vs M/s Sheth Developers Pvt. Ltd. & Anr. (Supreme Court of India)

Under these circumstances, the appeal deserves to be allowed and process in Criminal Case No. 1171/SS/2009 pending before the Court of learned Metropolitan Magistrate 13th Court, Dadar, Mumbai deserves to be quashed, accordingly, quashed against the appellant herein. The appeal is allowed....

Read More

Appeal not maintainable if complaint filed for dishonour of cheque was not authentic –SC

Vijay Vs Laxman & Anr. (Supreme Court of India)

Thus, we are of the view that although the cheque might have been duly obtained from its lawful owner i.e. the respondent-accused, it was used for unlawful reason as it appears to have been submitted for encashment on a date when it was not meant to be presented as in that event the respondent would have had no reason to ask for a loan fr...

Read More

Complaint u/s. 138 without signature is maintainable if complaint is verified by Magistrate

Indra Kumar Patodia Vs Reliance Industries Ltd. (Supreme Court of India)

complaint under section 138 of the Act without signature is maintainable when such complaint is verified by the complainant and the process is issued by the Magistrate after due verification. The prosecution of such complaint is maintainable and we agree with the conclusion arrived at by the Division Bench of the High Court. Consequently,...

Read More

Cheque signature mismatch may lead to criminal proceedings – SC

M/s Laxmi Dyechem Vs State of Gujarat & Ors.(Supreme Court of India)

SCset aside verdict of GujaratHC which had held that criminal proceedings for dishonouring of cheque can be initiated only when the cheque is dishonoured because of lack of sufficient amount in the bank account and not in case where a cheque is returned due to mismatch of signature of account holder....

Read More

If company did not dispute claim of creditor-bank, winding up petition against company is to be admitted

Vikash Metal and Power Ltd. Vs Corporation Bank (Calcutta High Court)

A creditor can maintain a winding up petition if he complies with the provisions of Sections 433, 434 and 439 of the said Act of 1956. In the present case, the respondent-Bank was admittedly a creditor of the company. The company did not dispute such relationship. The company did not dispute receipt of the notice, hence, the winding up pe...

Read More

Prosecution based on second or successive dishonour of cheque is permissible -SC

MSR Leahers Vs S. Palaniappan & ANR.(Supreme Court of India)

We overrule the decision in Sadanandan Bhadran’s case (supra) and hold that prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. ...

Read More

Prosecution for dishonoured cheques possible against Company & its functionaries – SC

Aneeta Hada Vs. M/s. Godfather Travels & Tours Pvt. Ltd. (Supreme Court of India)

If the offence is by a Company, arraigning of a company as an accused is imperative: the company can have criminal liability and further, if a group of persons that guide the business of the companies have the criminal intent, that would be imputed to the body corporate. In this backdrop, Section 141 of the Act has to be understood. The s...

Read More

Can a Person be tried twice for same offence?

Sangeetaben Mahendrabhai Patel Vs State of Gujarat & Anr. (Supreme Court of India)

Learned counsel for the appellant has further placed reliance on the judgment in G. Sagar Suri & Anr. v. State of U.P. & Ors., (2000) 2 SCC 636, wherein during the pendency of the proceedings under Section 138 N.I. Act, prosecution under Sections 406/420 IPC had been launched. This Court quashed the criminal proceedings under Sections 406...

Read More

Demand to return amount essential ingredient to constitute offence punishable u/s. 138 of NI Act

Brainobrain Kids Academy P. Ltd & Anr Vs Continental Advertising P. Ltd. (Delhi High Court)

The Delhi high court has stated that while issuing a notice under Section 138 of the Negotiable Instruments Act, an omnibus notice without specifying the amount due under the dishonoured cheque, not even calling upon the alleged accused to pay the amount of cheque, will not meet the requirement of the law. Quashing the complaint in the ca...

Read More

Proceedings in bounced cheque cases under Negotiable Instruments Act will continue even if there is a scheme to revive the sick company

JIK Industries Limited & Ors. Vs. Amarlal V. Jumani (Supreme Court of India)

JIK Industries Limited & Ors. Vs. Amarlal V. Jumani (Supreme Court)- It was held that cases of bounced cheque are independent of the revival bid of a sick company. Proceedings in bounced cheque cases under the Negotiable Instruments Act will continue even if there is a scheme to revive the sick company. The revival attempt under the Comp...

Read More

SC Sympathy in bounced cheque case

B. Chandramathi Vs. N. Prakash (Supreme Court of India)

B. Chandramathi Vs. N. Prakash (SC)- Appellant is about 51 years of age. She is a poor widow who is eking out a living for herself and her family by making jowar rotis and selling them. She is the only earning member of her family. She has two children to look after. It appears that the appellant is unwell. She is stated to have suffered ...

Read More

In case of bounced cheque the magistrate in the place where the cheque was drawn and where the drawee bank is situated has jurisdiction to deal with the complaint

Shree Raj Travels & Tours Ltd. & Ors. Vs Destination Of The World (Subcontinent) Private Ltd (Delhi High Court)

In a case of bounced cheque, the Delhi high court has ruled that the magistrate in the place where the cheque was drawn and where the drawee bank is situated has jurisdiction to deal with the complaint. The power under the Negotiable Instruments Act is not with the magistrate where the cheque was presented or from where the notice was iss...

Read More

New partners can not be held guilty for cheque issued by old partners – SC

Sarojben Ashwinkumar Shah etc. Vs. State of Gujarat & ANR. (Supreme Court of India)

Sarojben Ashwinkumar Shah etc. Vs. State of Gujarat & ANR. (Supreme Court of India)- In this case, a firm issued cheques to a person but it was returned by the bank as the account had been closed. The payee filed a criminal complaint under Section 138 of the Negotiable Instruments Act against the firm and two partners. During the trial, t...

Read More

Negotiable Instrument Act – No case made out if cheque issued for Security Deposit

Joseph Vilangadan. Vs. Phenomenal Health Care Services Ltd. & Anr. (Bombay High Court)

Joseph Vilangadan. v. Phenomenal Health Care Services Ltd. & Anr. - As per the said contract, Contractors deposited the sum of Rs. 10 lacs by undated cheque no.027840 drawn against South Indian Bank Ltd., Palarivattom Branch, Cochin branch with the respondent no.1 as refundable security deposit for the due performance of the agreement. T...

Read More

Partners have burden of proof in cheque bouncing cases that they were not in charge of the daily affairs of the firm

Rallis India Ltd. Vs. Poduru Vidya Bhusan & Ors. (Supreme Court of India)

Rallis India Ltd. Vs. Poduru Vidya Bhusan & Ors. (Supreme Court) - When partners of a firm issue cheques which are dishonoured, it is presumed that they were responsible for issuing them unless they prove that they were not in charge of the daily affairs of the firm. They have to discharge the burden during the trial under the Negotiable ...

Read More

Section 139 of NI Act does presume existence of a legally enforceable debt or liability

Rangappa Vs. Sri Mohan (Supreme Court of India)

In the present case, the trial court had acquitted the appellant-accused in a case related to the dishonour of a cheque under Section 138 of the Negotiable Instruments Act, 1881. This finding of acquittal had been made by the Addl. JMFC at Ranebennur, Karnataka in Criminal Case No. 993/2001, by way of a judgment dated 30-5-2005. On appeal...

Read More

Section 141 of Negotiable Instrument Act, 1881 does not make all the Directors liable for Dishonour of cheques

National Small Industries Corp. Ltd. Vs Harmeet Singh Paintal (Supreme Court of India)

Section 291 of the Companies Act provides that subject to the provisions of that Act, the Board of Directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do. A company, though a legal entity, can act only through its Board of Directors. The set...

Read More

Browse All Categories

CA, CS, CMA (5,053)
Company Law (6,720)
Custom Duty (8,087)
DGFT (4,389)
Excise Duty (4,411)
Fema / RBI (4,438)
Finance (4,699)
Income Tax (35,128)
SEBI (3,757)
Service Tax (3,627)

Search Posts by Date

December 2020
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
28293031