Negotiable Instruments Act: All India Annual Digest 2024

SUPREME COURTDirector of the company not responsible for its day-to-day affairs cannot be held liable for dishonour of cheque. (Para 10) Susela Padmavathy Amma v. Bharti Airtel Ltd., 2024 LiveLaw (SC) 237Section 138 – Maintainability of suit – Criminal law can be set in motion by anyone, even by a stranger or legal heir. A complaint under Section 138, preferred by the Power of Attorney Holder is held maintainable and also that such Power of Attorney Holder can depose as complainant. (Para 11) Rajesh Kumar v. Anand Kumar, 2024 LiveLaw (SC) 407Section 138 – Civil and Criminal course adopted on same issue – Whether, a criminal proceeding can be initiated and the accused therein held guilty, in connection with a transaction, in respect of which a decree by a competent Court of civil jurisdiction, already stands passed? Held, civil court judgments are not binding on criminal courts, but the ratio of the civil proceedings would be binding on criminal proceedings for certain limited purposes such as sentence or damages imposed by the criminal court. The Court in criminal jurisdiction would be bound by the civil Court having declared the cheque to be only for the purposes of security. The civil Court having declared the cheque (subject matter of dispute) to be only for the purposes of security, the criminal proceedings for cheque dishonour under Section 138 of the Negotiable Instruments Act would be unsustainable in law and, therefore liable to be quashed and set aside. The damages as imposed by the Courts must be returned to the appellant. (Para 8, 11 & 12) Prem Raj v. Poonamma Menon, 2024 LiveLaw (SC) 272 : (2024) 6 SCC 143Section 138 – Dishonouring of cheque – Held, existence of any “enforceable debt or other liability” not found. Petitioner's case not made out. (Para 11) Rajco Steel Enterprises v. Kavita Saraff, 2024 LiveLaw (SC) 306 : AIR 2024 SC 2105Section 138 - Amendment of Complaint - Cheque Date - Typographical Error - The appellant challenged the High Court's decision permitting the respondent to amend the complaint to correct the date on a cheque from 22.07.2010 to 22.07.2012. The application for amendment was filed after evidence had been tendered, and the learned Magistrate rejected the amendment on the grounds that the date had been consistently recorded as 22.07.2010 in both the complaint and the evidence. The legal notice issued before the complaint also mentioned the date 22.07.2010. The High Court allowed the amendment, but the Supreme Court found that the amendment was not justified since the original date was crucial for compliance with the statutory time frame and the financial status of the account. The High Court's order permitting the amendment was set aside, and the appeal was allowed. Munish Kumar Gupta v. Mittal Trading Company, 2024 LiveLaw (SC) 339Section 138 – Requirement of 'consent' in compounding of offence under section 138 – Even though compensation is duly paid by the accused, yet if the complainant does not agree for the compounding of the offence, the courts cannot compel the complainant to give 'consent' for compounding of the matter. Held, as the complainant has compensated the complainant and has already been in jail for more than 1 year, even though the complainant is unwilling to compound the case, the proceedings must come to an end. (Para 12 & 14) Raj Reddy Kallem v. State of Haryana, 2024 LiveLaw (SC) 336Section 147 & 138 – Compoundable offence – All offences punishable under the Negotiable Instruments Act are compoundable – In cases of section 138 the accused must try for compounding at the initial stages instead of the later stage, however, there is no bar to seek the compounding of the offence at later stages of criminal proceedings including after conviction. (Para 12) Raj Reddy Kallem v. State of Haryana, 2024 LiveLaw (SC) 336Section 143A - Mere filing of the cheque dishonor complaint under the Negotiable Instruments Act would not grant a right to a complainant to seek interim compensation under Section 143A (1) of the N.I. Act, as the power of the court to grant interim compensation, isn't mandatory but discretionary and needs to be decided after prima facie evaluating the merits of the case. (Para 14) Rakesh Ranjan Shrivastava v. State of Jharkhand, 2024 LiveLaw (SC) 235 : (2024) 4 SCC 419Section 118 r/w. 139 - Even if a blank cheque leaf is voluntarily signed and handed over by the accused towards some payment would attract the presumption under Section 139 of the Act and in the absence of any cogent evidence to show that the cheque was not issued in discharge of the debt, the presumption would hold good. (Para 5) K. Ramesh v. K. Kothandaraman, 2024 LiveLaw (SC) 145Section 118 r/w. 139 - Accused has signed the cheque. The only dispute is with regard to the age of the ink used in making the signature on the cheque and the age of the signature and contents of the cheque. It is immaterial that the cheque may have been filled in by any person other than the drawer, ...

Negotiable Instruments Act: All India Annual Digest 2024

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