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advocatemmmohan

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advocatemmmohan has written 175 posts for ARTICLES & CHEQUE BOUNCE CASES Etc.,& other courts

Sec.138 – cheque bounce case – General Clauses Act sec.27 – Evidence Act Sec.114 – Presumption of service of notice when the address is found correct when the cover / acknowledgement not returned – on receiving of summons, the accused paid the amount – objection for quashing the cheque bounce case as the offence was committed in earlier point of time – payment made later never cured – High court held that the statutory presumption is no more available in view of the Judgment of Apex court held in C.C.ALAVI HAJI it was observed that if the petitioner/drawer claims that he did not receive the notice sent by the drawee by post, if the drawer pays the money covered by the cheque within 15 days from the date of receipt of summons in the case, it would be tantamount to complying with the payment of cheque and that the cause of action for the offence under Section 138 of the N.I. Act would no more survive. and high court held that when the accused claimed that no notice was served on him and his payment after receiving summons is nothing but compliance of condition made in sec.138 of N.I. Act – remaining the case pending despite of compliance is not maintainable and as such the case is liable to be quashed = Criminal Petition No.740 of 2014 05-8-2014 B.Ram Mohan Reddy Petitioner/Accused C.V.Subba Rao and another Respondents/Complainant = 2014 – Aug. Month- http://judis.nic.in/judis_andhra/filename=11803

Sec.138 – cheque bounce case – General Clauses Act sec.27 – Evidence Act Sec.114 – Presumption of service of notice when the address is found correct when the cover / acknowledgement not returned – on receiving of summons,  the accused paid the amount – objection for quashing the cheque bounce case as the offence was committed … Continue reading

SEC. 138 OF N.I.ACT – whether the post-dated cheques issued by the appellants (hereinafter referred to as ‘purchasers’) as an advance payment in respect of purchase orders could be considered in discharge of legally enforceable debt or other liability, and, if so, whether the dishonour of such cheques amounts to an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the N.I. Act’). The Delhi High Court in the impugned order has held that to be so. – APEX COURT HELD THAT if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability.If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. = M/s. Indus Airways Pvt. Ltd. & Ors. … Appellants Versus M/s. Magnum Aviation Pvt. Ltd. & Anr. … Respondents = 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41392

   SEC. 138 OF N.I.ACT – whether  the  post-dated  cheques  issued  by   the appellants (hereinafter referred to as ‘purchasers’) as an  advance  payment in respect of purchase orders could be considered in  discharge  of  legally enforceable debt or other liability, and, if so, whether  the  dishonour  of such cheques amounts to an offence  under  Section  138  of  the  Negotiable Instruments Act, … Continue reading

Cheque bounce case – Discharge petition stating that the cheque was drawn on 31-12-2005 but the cheque was presented on 30-6-2006 beyond 6 months – not valid – Apex court held that the day 31-12-2005 is to be excluded – so the limitation starts from 1-1-2006 from there 6 months comes to 31-06-2006 is to be included and the day on 30-06-2006 – is with in 6 months – not barred by limitation = RAMESHCHANDRA AMBALAL JOSHI ….Appellant – VERSUS-THE STATE OF GUJARAT AND ANR. ….RESPONDENTS = 2014 ( Feb.Part) judis.nic.in/supremecourt/filename=41233

Cheque bounce case – Discharge petition stating that the cheque was drawn on 31-12-2005 but the cheque was presented on 30-6-2006 beyond 6 months – not valid – Apex court held that the day 31-12-2005 is to be excluded – so the limitation starts from 1-1-2006  from there  6 months comes to 31-06-2006 is to … Continue reading

Sec.138 ,sec.141 N.I.Act – Partnership Firm – issued cheque – cheque bounced – firm not made as accused – fatal to the prosecution – firm registration form filed by accused can be considered even at preliminary stage against the general rule no document filed by accused can be considered – no issue of reply notice is not fatal for receiving the document filed by accused – complaint was quashed as not maintainable = Smt. Bommidipati Madhavi….Petitioner/accused The State of Andhra Pradesh rep.by Public Prosecutor, High Court of A.P., Hyderabad and another….Respondents = published in judis.nic.in/judis_andhra/filename=10600

Sec.138 ,sec.141 N.I.Act – Partnership Firm – issued cheque – cheque bounced – firm not made as accused – fatal to the prosecution –  firm registration form  filed by accused can be considered even at preliminary stage against the general rule no document filed by accused can be considered – no issue of reply notice is not fatal … Continue reading

Sec.138 ,139 and sec. 118 of N.I.Act – Burden of proof – when the complainant not able to say the date when the amount was given – when failed to produce source of income – when gave contradictory statement about filling of cheque whether by accused or by himself – when there is no pleading that cheque was filled with the consent of accused – mere lack of issuing a reply notice and mere non putting a suggestion that the cheque was a blank cheque are not countable points to over throw the positive admissions made by the complainant – Lower court rightly dismissed the complaint – High court wrongly with out assigning valid reasons convict the accused – Apex court set aside the high court orders = John K. Abraham …. Appellant VERSUS Simon C. Abraham & Another …. Respondents = published in http://judis.nic.in/supremecourt/imgst.aspx?filename=41045

 Sec.138 ,139 and sec. 118 of N.I.Act – Burden of proof  – when the     complainant not able to say the date when the amount was given – when failed to produce source of income – when gave contradictory statement about filling of cheque whether by accused or by himself – when there is … Continue reading

Sec.138 N.I.Act – Sec.201 of Cr.p.c. – Power of magistrate to recall it’s orders – Jurisdiction of court for cheque bounce case = (i) Whether the Magistrate after having found sufficient ground for proceeding in case and issued summons under Section 204 Cr.P.C. has the jurisdiction to recall or review the order by exercising its power under Section 201 Cr.P.C.; = Apex court held – No. (ii) Whether the petition under Section 138 of the N.I. Act was maintainable at Mumbai on the ground that goods were supplied from Mumbai to Delhi and cheques were handed over at Mumbai and legal notice was issued from Mumbai. = Apex court held – Yes = DEVENDRA KISHANLAL DAGALIA … APPELLANT VERUS DWARKESH DIAMONDS PVT. LTD. AND ORS. … RESPONDENTS = published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40991

Sec.138 N.I.Act – Sec.201 of Cr.p.c. – Power of magistrate to recall it’s orders – Jurisdiction of court for cheque bounce case = (i)   Whether the Magistrate after having found sufficient ground  for       proceeding in case and issued summons under Section  204  Cr.P.C.  has       the jurisdiction to recall or review … Continue reading

Sec. 53 of Insolvency Act = Whether the Courts can order adjudicating the transferor as insolvent and ordering to administer schedule property by the official receiver and distribute the sale proceeds among the petitioners is sustainable?

Whether the Courts can order adjudicating the transferor as insolvent and ordering to administer schedule property by the official receiver and distribute the sale proceeds among the petitioners is sustainable? Image by John Leech, from: The Comic History of Rome by Gilbert Abbott A Beckett. Bradbury, Evans & Co, London, 1850s Debtor and Creditor. Seizure … Continue reading

whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 (for brevity ‘the Act’) without the company being arraigned as an accused. -apex court held No = “141. Offences by companies. – (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly; Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a Company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act, has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.” 16. On a reading of the said provision, it is plain as day that if a person who commits offence under Section 138 of the Act is a company, the company as well as every person in charge of and responsible to the company for the conduct of business of the company at the time of commission of offence is deemed to be guilty of the offence. The first proviso carves out under what circumstances the criminal liability would not be fastened. Sub-section (2) enlarges the criminal liability by incorporating the concepts of connivance, negligence and consent that engulfs many categories of officers. It is worth noting that in both the provisions, there is a ‘deemed’ concept of criminal liability.- Resultantly, the Criminal Appeal Nos. 838 of 2008 and 842 of 2008 are allowed and the proceedings initiated under Section 138 of the Act are quashed. 46. Presently, we shall advert to the other two appeals, i.e., Criminal Appeal Nos. 1483 of 2009 and 1484 of 2009 wherein the offence is under Section 67 read with Section 85 of the 2000 Act. In Criminal Appeal No. 1483 of 2009, the director of the company is the appellant and in Criminal Appeal No. 1484 of 2009, the company. Both of them have called in question the legal substantiality of the same order passed by the High Court. In the said case, the High Court followed the decision in Sheoratan Agarwal (supra) and, while dealing with the application under Section 482 of the Code of Criminal Procedure at the instance of Avnish Bajaj, the Managing Director of the company, quashed the charges under Sections 292 and 294 of the Indian Penal Code and directed the offences under Section 67 read with Section 85 of the 2000 Act to continue. It is apt to note that the learned single Judge has observed that a prima facie case for the offence under Sections 292(2)(a) and 292(2)(b) of the Indian Penal Code is also made out against the company. 47. Section 85 of the 2000 Act is as under: – “85. Offences by companies – (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made there under has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.” 48. Keeping in view the anatomy of the aforesaid provision, our analysis pertaining to Section 141 of the Act would squarely apply to the 2000 enactment. Thus adjudged, the director could not have been held liable for the offence under Section 85 of the 2000 Act. Resultantly, the Criminal Appeal No. 1483 of 2009 is allowed and the proceeding against the appellant is quashed. As far as the company is concerned, it was not arraigned as an accused. Ergo, the proceeding as initiated in the existing incarnation is not maintainable either against the company or against the director. As a logical sequeter, the appeals are allowed and the proceedings initiated against Avnish Bajaj as well as the company in the present form are quashed. 49. Before we part with the case, we must record our uninhibited and unreserved appreciation for the able assistance rendered by the learned counsel for the parties and the learned amicus curiae. 50. In the ultimate analysis, all the appeals are allowed.

   published in   http://judis.nic.in/supremecourt/imgst.aspx?filename=39265 IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 838 OF 2008   Aneeta Hada …..……..Appellant Versus M/s. Godfather Travels & Tours Pvt. Ltd. ………Respondent WITH CRIMINAL APPEAL NO. 842 OF 2008 Anil Hada …………Appellant Versus M/s. Godfather Travels & Tours Pvt. Ltd. ………Respondent WITH CRIMINAL APPEAL NO. … Continue reading

Cheque dishonor case = under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to dishonour of a cheque can, in no case “except in case of Section 141 of the N.I. Act” be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act.

published in http://judis.nic.in/supremecourt/filename=40479 Page 1 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL No. 813 OF 2013 (Arising out of S.L.P. (Crl.) No. 9794 of 2010) Mrs. Aparna A. Shah …. Appellant(s) Versus M/s Sheth Developers Pvt. Ltd. & Anr. …. Respondent(s) J U D G M E N T P.Sathasivam,J. 1) Leave granted. 2) … Continue reading

whether the Court, where a cheque is deposited for collection, would have territorial jurisdiction to try the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short “the N.I.Act”) or would it be only the Court exercising territorial jurisdiction over the drawee bank or the bank on which the cheque is drawn? = whether the sending of notice from Delhi itself would give rise to a cause of action in taking cognizance under the N.I. Act. In such circumstances, we are of the view that Harman Electronics (supra) is only an authority on the question where a court will have jurisdiction because only notice is issued from the place which falls within its jurisdiction and it does not deviate from the other principles laid down in K. Bhaskaran (supra). This Court has accepted that the place where the cheque was presented and dishonoured has jurisdiction to try the complaint. In this way, this Court concluded that issuance of notice would not by itself give rise to a cause of action but communication of the notice would. In other words, the court clarified only on the service in such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days, thereafter, the commission of an offence completes. We are of the view that this Court in Harman Electronics (supra) affirmed what it had said in K. Bhaskaran (supra) that court within whose jurisdiction the cheque is presented and in whose jurisdiction there is failure to make payment within 15 days of the receipt of notice can have jurisdiction to try the offence under Section 138 of the N.I. Act. It is also relevant to point out that while holding that the Chandigarh Court has jurisdiction, this Court in Harman Electronics (supra) observed that in the case before it, the complaint was silent as to whether the said cheque was presented at Delhi. In the case on hand, it is categorically stated that the cheque was presented at Bhiwani whereas in Harman Electronics (supra) the dishonour had taken place at Chandigarh and this fact was taken into account while holding that Chandigarh court has jurisdiction. In the complaint in question, it is specifically stated that the dishonour took place at Bhiwani. We are also satisfied that nothing said in Harman Electronics (supra) had adverse impact on the complainant’s case in the present case. we must note that in K. Bhaskaran (supra), this Court has held that Section 178 of the Code has widened the scope of jurisdiction of a criminal court and Section 179 of the Code has stretched it to still a wider horizon. Further, for the sake of repetition, we reiterate that the judgment in Ishar Alloy (supra) does not affect the ratio in K. Bhaskaran (supra) which provides jurisdiction at the place of residence of the payer and the payee. We are satisfied that in the facts and circumstances and even on merits, the High Court rightly refused to exercise its extraordinary jurisdiction under Section 482 of the Code and dismissed the petition filed by the appellantaccused. In the light of the above discussion, we hold that the ratio laid down in K.Bhaskaran (supra) squarely applies to the case on hand. The said principle was correctly applied by the learned Sessions Judge as well as the High Court. Consequently, the appeal fails and the same is dismissed. In view of the dismissal of the appeal, the interim order granted by this Court on 09.12.2011 shall stand vacated.

published in http://judis.nic.in/supremecourt/filename=40477 Page 1 Page 1 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL No. 808 OF 2013 (Arising out of S.L.P. (Crl.) No. 9434 of 2011) Nishant Aggarwal …. Appellant(s) Versus Kailash Kumar Sharma …. Respondent(s) J U D G M E N T P.Sathasivam,J. 1) Leave granted. 2) The question … Continue reading