“We are of view, whenever accused has questioned financial capacity of complainant in support of his probable defence, despite presumption under Section 139 about presumption of a legally enforceable debt and such presumption is rebuttable, thereafter onus shifts again on complainant to prove his financial capacity and complainant is required to lead evidence to prove […]
Read more "Rebuttable Presumption II"“The principal issue involved in the matter is whether a Charitable Trust could maintain an action under the provisions of The Consumer Protection Act, 1986. The reliance was placed on Pratibha Pratisthan, (2017) 3 SCC 712 to hold that a Trust would not be a ‘person’ and consequently not a ‘consumer’. The definition of ‘person’ in terms […]
Read more "Referred to Larger Bench XIX: Trusts Not Consumers"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. […]
Read more "Cheque Bounce Acquittal"“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 only with applicability of said Section 143A to offences under Section 138, committed before insertion of said Section 143A. Section 143A not only creates a new disability or an obligation but also exposes […]
Read more "Section 143A, 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, […]
Read more "Section 148, The NI Act"The presumption under Section 139 is a rebuttable presumption; Section 139 is an example of a reverse onus and test of proportionality should guide construction and interpretation of reverse onus clauses on accused and accused cannot be expected to discharge an unduly high standard of proof; standard of proof for rebutting is of preponderance of […]
Read more "Rebuttable Presumption I"Appellant-Director [Himanshu] cannot not be prosecuted for a Company-Issued, Director-Signed Cheque Bounce without Company [M/s. Lakshmi Cement and Industries Ltd.] being named/arraigned as an Accused. Three-Judge Bench in Aneeta Hada, (2012) 5 SCC 661 governs area of dispute. Three-Judge Bench has since been followed by a Two-Judge Bench in Charanjit Pal Jindal vs. L.N. Metalics, […]
Read more "Notice to Directors II"“The correctness of the decision in Sadanandan’s case was doubted. Three-Judge Bench of this Court in MSR Leathers v. S. Palaniappan held that there is nothing in the provisions of Section 138 of The Act that forbids the holder of the cheque to make successive presentation of the cheque and institute the criminal complaint based […]
Read more "Successive Presentations of Cheque"Advocate represented its Client before a Motor Accident Claims Tribunal and charged a fee of Rs. 10,00,000 [Rupees Ten Lakhs]. Tribunal awarded compensation. Client was compelled to sign a further cheque, in favour of Advocate, towards payment of a certain percentage of decretal amount. That cheque stood dishonoured and Advocate in due time initiated proceedings […]
Read more "A Legally Enforceable Debt III"Recently in M/s. Meters and Instruments Private Ltd. v. Kanchan Mehta, [Criminal Appeal No. 1731 of 2017] Goel and Lalit JJ observed: “There appears to be need to consider categories of cases which can be partly or entirely concluded ‘online’ without physical presence of the parties by simplifying procedures where seriously disputed questions are not required […]
Read more "Video Conferencing in Matrimonial (Cheque) Disputes II (I)"To commit an offence, within the meaning of Section 138 of The Negotiable Instruments Act, 1881 there must be a legally enforceable debt or other liability subsisting on the date of drawal of the cheque. This is important to point out for sometimes cheques are post-dated. Notably, in Indus Airways Pvt. Ltd. v. Magnum Aviation […]
Read more "A Legally Enforceable Debt II"It is widely known, Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129 gave rise to further ‘territorial jurisdiction conundrum’. In Bridgestone India, 2015 (13) SCALE 155 decided on 24.11.2015, “in order to overcome the legal position declared by Court in Dashrath,” attention was drawn to The Negotiable Instruments (Amendment) Second Ordinance, 2015. […]
Read more "Negotiable Instruments (Amendment) Second Ordinance, 2015"You do not need an Advocate to draft a Section 138(b), NI Act notice. A hand written note mentioning, i) the amount under subject, ii) cheque nos., iii) dates of issue, iv) bank particulars, v) details of dishonor, with a demand for repayment, is valid for the purposes of calculating relevant limitation periods. In Pawan […]
Read more "Section 138 Notice I"“The notice under Section 138 is required to be given to the ‘drawer’ of the cheque so as to give the drawer an opportunity to make the payment and escape the penal consequences. There is nothing in Section 138 which may even remotely suggest issuance of notice to anyone other than the drawer. The opportunity […]
Read more "Notice to Directors I"A person is deemed to have committed an offence, within the meaning of Section 138 of The Negotiable Instruments Act, 1881 when any cheque drawn by him, on an account maintained by him with a banker, for payment of any amount of money to another person, in whole or partial discharge of a legally enforceable […]
Read more "A Legally Enforceable Debt I"Dashrath Bench cleverly interpreted the Harman Approach and its effect on the Bhaskaran Ratio. It was fairly concluded by SC, the “offence in contemplation of Section 138 of The NI Act was the dishonor of the cheque alone”; and that so far as the commission of the offence itself is concerned the proviso had no role to […]
Read more "The Foresight of Hon’ble Justice Lodha"The chain of five events: i) the drawal of the cheque, ii) the presentation of the cheque, iii) the returning of the cheque as unpaid, iv) the giving of notice and v) the failure to make the payment within 15 days of receiving the notice – complete the commission of the offence, described under Section […]
Read more "Dashrath Rupsingh Rathod, (2014) 9 SCC 129"A person is deemed to have committed an offence, within the meaning of Section 138 of The Negotiable Instruments Act, 1881 when any cheque drawn by him, on an account maintained by him with a banker, for payment of any amount of money to another person, in whole or partial discharge of a legally enforceable […]
Read more "The British Month and The NI Act"Section 138 of The Negotiable Instrument Act, 1881 encapsulates the situation of dishonour of a cheque due to insufficiency of funds in the drawer’s account. Subsequent to the dishonour, Section 138 enjoins that the payee must give a notice to the drawer, in writing, demanding payment of money. More often than not, however, the drawer […]
Read more "MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177"
