Rebutting the presumption against accused in Section 138, N I Act #indianlaws

Feb
13
2017


Delhi High Court in the matter of Mukesh Kumar Vs. State Crl. L P 555/2017 decided on 2nd Feburary, 2017 held the fact that the cheque has been signed by the accused is not denied by the accused, itself raises a presumption against the accused under Section 139 of Negotiable Instruments Act that the cheque had been issued in respect of an outstanding debt or for consideration.  The presumption under Section 139 of Negotiable Instruments Act is a rebuttable presumption, and the standard of proof required to rebut the said presumption is on preponderance of probabilities.




Cheque given as ‘Security’ is covered within the ambit of Section 138 of N.I Act #indianlaws

Dec
14
2016


The Supreme Court in a judgment delivered in September has held that the dishonour of a post-dated cheque given for repayment of loan installment which is also described as "security" in the loan agreement is covered by Section 138 of the Negotiable Instruments Act. Contention of the Appellant in support of his case was that the cheques were given by way of security as mentioned in the agreement and that on the date the cheques were issued, no debt or liability was due.




For quashing of proceedings against a Director u/s 138/141 of the Act it must be shown that no offence is made out against him and quashing is not to be granted merely on asking #indianlaws

May
9
2016


When in view of the basic averment process is issued, the complaint must proceed against the Directors. But, if any Director of a company wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he is really not concerned with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case that making him stand the trial would be an abuse of process of court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trial and it could be argued that his further role could be brought out in the trial.




Arraigning of Partnership firm imperative to prosecute partner U/s.141 of the NI Act #indianlaws

Feb
25
2016


There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous. Therefore for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. It was accordingly held that for maintaining prosecution against a partner under section 141 of the NI Act, arraigning of partnership firm as an accused is imperative.




There is a presumption that a negotiable instrument is supported by consideration #indianlaws

Feb
10
2016


The Hon'ble Court held that there is a presumption that a negotiable instrument is supported by consideration. There was no dispute that such a consideration existed in as much as the cheques were issued in connection with the discharge of the outstanding liability against Respondent. Mentioning of date that the cheques can be presented for encashment after certain date clearly showed that the cheques issued by him were not ornamental but were meant to be presented if the amount in question was not paid within the extended period. 




Notice under Section 138 is required to be given to the ‘drawer’ of the cheque and not to any other person#indianlaws

Sep
24
2015


Notice under Section 138 N I Act 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. No other person is contemplated by Section 138 as being entitled to be issued such notice.

 




Director signing cheque in personal capacity is liable in a cheque dishonor case#indianlaws

Jul
23
2015


Where the cheque is drawn by the employee of the appellant company on his personal account, even if it be for discharging dues of the appellant-company and its Directors, the appellant-company and its Directors cannot be made liable under Section 138. This is so that the Section itself makes the drawer liable and no other person. 




Proposed amendment in Negotiable Instruments Act 1881 in some way would create further chaos

May
21
2015


Amendment in Negotiable Instrument Act 1881 may bring some positive changes, while it will create chaos for the existing cases.




No need to issue notice to Directors of the accused company in proceedings under Section 138 N I Act #indianlaws

May
11
2015


Section 138 of the N I Act does not admit of any necessity or scope for reading into it the requirement that the directors of the Company in question must also be issued individual notices under Section 138 of the Act. Such directors who are in charge of affairs of the Company and responsible for the affairs of the Company would be aware of the receipt of notice by the Company under Section 138.




Cheque dishonour proceedings upon reaching the stage of Section 145(2) of NI Act or beyond to continue in Court conducting trial

Jan
19
2015


It is only when the stage of proceedings in cases filed under Section 138 of the Act has reached the stage of Section 145(2) of the Act or beyond thereof, such case shall continue to be dealt with by the Court where it is pending trial.




Inchoate instruments are also valid and legally enforceable

Dec
11
2014


Once the execution of Cheque is admitted, it shall be taken that the cheque was issued by the accused in favour of the complainant towards the discharge of the liability. 




In cheque dishonor cases there exists a rebuttable presumption of a legally enforceable debt to be proved by Accused

Nov
24
2014


Presumption mandated by Section 139 of the Act includes a presumption that there exists a legally enforceable debt or liability and that is a rebuttable presumption.




Complaint under Section 138 N I Act against a Director may be quashed, if the High Court finds no specific allegations against the Directors.

Nov
3
2014


Where on an overall reading of the complaint under Section 138 N I Act, the High Court may quash the Complaint against the Director in the absence of more particularls about role of the Director in the Complaint.




Complaint for dishonour of cheque could be filed through the Power of Attorney #indianlaws

Oct
10
2014


In the light of section 145 of NI Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the NI Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant or his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the NI Act.




Pre-mature filing of complaint under Section 138 N I Act is liable to be dismissed #indianlaws

Sep
28
2014


 Any complaint before the expiry of 15 days from the date on which the notice has been served on the drawer/accused is no complaint at all in the eye of law. It is not the question of prematurity of the complaint where it is filed before expiry of 15 days from the date on which notice has been served on him, it is infact no complaint at all under law




laws of pleading in complaint under Section 138 Negotiable Instruments Act #indianlaws

Sep
10
2014


It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.




Complaint against dishonor of cheque payable AT PAR can be filed where the cheque was dishonored #indianlaws

Aug
30
2014


By the present judgment, the Bombay High Court drawn a distinction or rather clarified that cheques payable at par if gets dishonored, the complaint filed against commission of such offence punishable under Section 138 of the NI Act can be filed before the territorial jurisdiction of such concerned Court within which the cheque was dishonored by one of the branches of the drawee’s bank.




Cheque dishonoured due to Stop Payment instructions may or may not be covered under Section 138 of NI Act #indianlaws

Aug
30
2014


If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence Under Section 138 would not be made out.




Issue of complaint under Section 138 N I Act being barred by time has to be raised before the Trial Court #indianlaws

Aug
21
2014


High Court should consider the provisions of condonation of delay inserted as proviso to clause (b) of Section 142 of the NI Act before dismissing the complaint being barred by limitation




A hand written note intimating about dishonour of cheque satisfying all mandatory requirements is a valid legal notice #indianlaws

Aug
21
2014


Hand written note about dishonour of cheque can be considered a notice under Section 138




law relating to jurisdiction of presenting complaint under Section 138 N I Act revised again. #indianlaws

Aug
11
2014


Cheque dishonor complaint to be filed before the Court within whose territorial jurisdiction cheque drawn was dishonored




Prosecution of Directors under Section 138 of the N I Act requires impleadment of Company #indianlaws

Jun
30
2014


The irresistible conclusion for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself




Mere denial of liability in Cheque dishonour is not sufficent shift burden on complainant #indianlaws

Jun
19
2014


Mere distorted version or mere taking up the plea or the defence that accused is not liable to pay any amount or be discharged the amount are not sufficient to put back the burden on to the complainant to prove his case beyond reasonable doubt.
 




Pay up dishonoured cheque amount within 15 days of receipt of Court summons to free your-self from penal consequences

May
21
2014


Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court can make payment of the cheque amount




Directions to Criminal Courts for faster disposal of Cheque bounce cases #indianlaws

May
2
2014


Delay in disposal of cheque bounce cases by the Courts of Law




All Directors in the Company are not vicariously liable to face prosecution in proceedings under Section 138 #Indianlaws

Apr
10
2014


It was observed in the present matter that despite the legal position duly settled with number of judgments passed by the Supreme Court, the trend in complaints for dishonour of cheque against a Company that still prevails is – implead all directors, company secretaries etc. as accused, no matter whether they were actually involved in the offence.




Dishonoured Cheque if only towards an advance indicates that there was no existing liability #indianlaws

Apr
10
2014


The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.




Criminal liability for dishonour of cheques under Section 138 of Negotiable Instruments Act.

Feb
27
2014


It is only the "drawer" of the cheque who can be made liable for the penal action under the provisions of the N.I. Act and as law is well settled, a strict interpretation is required to be given to penal statutes.




Date on which cause of action arose for filing complaint for dishonour of cheque is to be excluded for the purposes of limitation

Oct
26
2013


While calculating the period of one month as prescribed under Section 142(b) of the Negotiable Instruments Act, 1881 for filing a criminal complaint on the ground of dishonour of cheque, the period is to be reckoned by excluding or including the date on which the cause of action arose?




Dishonour of Cheques-Vicarious liability of Directors

Oct
17
2013


The Hon'ble Supreme Court in a matter dealt with the issue of vicarious liability of Directors in the offence of dishonour of cheque.








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