SC Resolves Conflict Between NI Act & IBC

Rainbow Papers Limited sought loans from Tourism Finance Corporation of India Limited and issued post-dated cheques which stood dishonoured. Criminal Complaint was filed before Chief Metropolitan Magistrate, Saket Courts, New Delhi. Neeraj Paper Agencies Limited requested initiation of Corporate Insolvency Resolution Process against Rainbow Papers Limited. The scope of nature of proceedings are quite different. […]

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A Legally Enforceable Debt IV

Though a post-dated cheque might be drawn to represent a legally enforceable debt at the time of its drawing, the cheque must represent the legally enforceable debt at the time of encashment.    The sum, as represented in the cheque at the time of encashment, was not owed. Since the cheque did not represent the […]

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Burden of Proof

It is trite to refer to tenets laid down in Palermo and Vienna Conventions. There has been a consensus, acquisition-possession-use-concealing or disguising illicit origin of illegitimately obtained money to evade legal consequences would be money-laundering. However, growth of jurisprudence in this law did not stop or end…    _____ We hold, Section 24 of The […]

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Banker’s Protection, The NI Act

Elucidation on aspect of ‘care’ required to seek statutory protection under Section 131 is to be found in Indian Overseas Bank v. Industrial Chain Concern, (1990) 1 SCC 484. We must be realistic and pragmatic not to narrow down Banker’s protection under Section 131 to make Banker’s position vulnerable. Officers of Banks are not required […]

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Vicarious Liability

Girdhari Lal Gupta v. D.H. Mehta, (1971) 3 SCC 189; State of Karnataka v. Pratap Chand, (1981) 2 SCC 335; Municipal Corporation of Delhi v. Ram Kishan Rohtagi, (1983) 1 SCC 1; Municipal Corporation of Delhi v. Purshotam Dass Jhunjunwala, (1983) 1 SCC 9; National Small Industries Corporation Limited v. Harmeet Singh Paintal, (2010) 3 […]

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Settlement Deed Cheque

This is a case of cheques, issued pursuant to a deed of compromise, being dishonoured. The dishonour of cheques, issued subsequent to a settlement agreement, would give rise to a fresh cause of action attracting liability under Section 138 and other remedies under civil law and criminal law. A contrary interpretation would lead to contradictory […]

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Section 141, The NI Act II

In light of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 in addition to asserting Directors are in-charge and responsible for conduct of business, if statutory compliance of Section 141 has been made – it is not open for High Courts to interfere under Section 482, CrPC unless it comes across some unimpeachable, incontrovertible […]

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Same Transaction

Offences that are committed as part of the ‘same transaction’ can be tried jointly as per Section 220 of The Code of Criminal Procedure, 1973. What is meant by ‘same transaction’ is not defined and it seems to us to be a difficult task to undertake a definition. We have not come across a single […]

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Civil Sheep & Criminal Wolf

A reading [State of Assam v. Ranga Mahammad, (1967) 1 SCR 454; Jagdish Chander Gupta v. Kajaria Traders (India) Ltd., (1964) 8 SCR 50; Rajasthan State Electricity Board v. Mohan Lal, (1967) 3 SCR 377; CBI v. Braj Bhushan Prasad, (2001) 9 SCC 432; Godfrey Phillips India Ltd. v. State of U.P., (2005) 2 SCC […]

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Rebuttable Presumption III

Trial Court completely overlooked and failed to appreciate the statutory presumption drawn under Section 118 and Section 139. The point of law has been crystalized in Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106. Trial Court ought to have presumed, the cheque was issued as consideration for a legally enforceable debt, once […]

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Section 141, The NI Act I

“S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 had occasion to consider the requirements of Section 141. “What is required is that the persons who are sought to be made criminally liable under Section 141 should be at the time the offence was committed, in charge of and responsible to the company for […]

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Rebuttable Presumption II

“We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and […]

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Cheque Bounce Acquittal

The legal heirs of someone deceased, convicted under Section 138, are neither liable to pay the fine or undergo imprisonment. However, they have a right to challenge the conviction of their predecessor. Trial Court had acquitted the (now) deceased on basis of an opinion of a handwriting expert. High Court considered, the opinion was inconclusive. […]

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Section 143A, The NI Act

“With effect from 01.09.2018, Section 143A was inserted in The Negotiable Instruments Act, 1881 by Amendment Act No. 20/2018. We are concerned in the present case only with the issue regarding applicability of said Section 143A to offences under Section 138, committed before the insertion of said Section 143A. Section 143A not only creates a […]

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Section 148, The NI Act

Considering, Statement of Objects and Reasons of Amendment, Amended Section 148 of The N.I. Act is applicable w.r.t. Appeals against Orders of Conviction and Sentence for the Offence under Section 138, even where Criminal Complaints for the Offence are filed prior to Amendment Act No. 20/2018 [01.09.2018]. “If such a purposive interpretation is not adopted, […]

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Rebuttable Presumption I

The presumption under Section 139 is a rebuttable presumption; Section 139 is an example of a reverse onus and the test of proportionality should guide the construction and interpretation of reverse onus clauses on the accused and the accused cannot be expected to discharge an unduly high standard of proof; the standard of proof for […]

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