Sec.138 Negotiable Instruments Act- Important Supreme Court & High Court Judgments of 2023

Supreme Court Judgments- Section 138 Negotiable Instruments Act, 1881Sec 138 NI Act - Accused Relies On Income Tax Returns To Show Complainant Did Not Have Financial Capacity; Supreme Court Affirms Acquittal Case Title: Rajaram Sriramulu Naidu (D) vs Maruthachalam (D), 2023 LiveLaw (SC) 46 Coram: Justices B R Gavai and M M Sundresh The Supreme Court reiterated that the standard of proof for rebutting the presumption under Section 139 of the N.I. Act is that of preponderance of probabilities. Reliance was placed upon Basalingappa v. Mudibasappa. The Court noted that the certified copies of the Income Tax Returns established that the complainant had not declared that he had lent Rs.3 lakh to the accused. Besides this, the Court also observed that the complainant(s) did not have the financial capacity to lend money as alleged. (Para 24-31) Section 138 NI Act | Conviction Cannot Be Confirmed Overriding Agreement Between Parties To Compound The Offence : Supreme Court Case Title: BV Seshaiah vs State of Telangana & B Vamsi Krishna vs State of Telangana., 2023 LiveLaw (SC) 75 Coram: Justices Krishna Murari and V Ramasubramanian The Supreme Court, while setting aside a conviction in a cheque dishonour case, held that when parties to a litigation proceeding have entered into an agreement to compound a compoundable offence, High Courts cannot override such compounding and impose their will on the parties. (Para 11) NI Act | In Cheque Case Against Company, Persons Can't Be Made Accused Only Because They're Managing Company's Business : Supreme Court Case Title: Ashok Shewakramani V. State Of Andhra Pradesh., 2023 LiveLaw (SC) 622 Coram: Justices Abhay S Oka and Sanjay Karol The Supreme Court held that under Section 141 of the N.I. Act, a person will become vicariously liable when a company is accused of the offence under Section 138 of the Act, only if such a person was "in charge of" and was "responsible to the company for the conduct of the business of the company" at the time the offence was committed. Merely because somebody is managing the affairs of the company, per se, he does not become in charge of the conduct of the business of the company or the person responsible for the company conduct of the business of the company, the Court said. (Para 19 and 20) S.141 NI Act - Only That Person Who Was Responsible For Conduct Of Company's Affairs At The Time Of Cheque Dishonour Is Liable: Supreme Court Case Title: Siby Thomas v. Somany Ceramics Ltd., 2023 LiveLaw (SC) 869 Coram: Justices CT Ravikumar and PV Sanjay Kumar The Supreme Court, while quashing a criminal complaint for cheque under Section 138 read with Section 141 N.I. Act, opined that: “A bare perusal of Section 141(1) of the NI Act, would reveal that only that 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 alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished.” Pertinently, the complaint was registered against the a partner of the partnership firm which issued the cheque. (Para 16) S.138 NI Act | Availability Of Funds In Other Bank Accounts Not A Defence; Cheque Dishonour Relates To Specific Account: Supreme Court Case Title: Harpal Singh Vs. The State of Haryana., 2023 LiveLaw (SC) 1046 Coram: Justices Hrishikesh Roy and Sanjay Karol. The Supreme Court held that in proceedings initiated for bounced cheques, the defence that there are sufficient funds in the other bank accounts cannot be appreciated. The Court explained: “In a proceeding under Section 138 of the Negotiable Instruments Act, the accused cannot rely upon other bank accounts for the dishonoured cheque which relates to specific bank account of the accused.” (Para 6) High Court Judgments- Section 138 Negotiable Instruments Act, 1881 Complainant U/S 138 NI Act Must Specifically Assert That Power Of Attorney Holder Has Knowledge Of Impugned Transaction: Kerala High Court Case Title: Razak Mether v. State of Kerala and Anr., 2023 LiveLaw (Ker) 24 Coram: Justice A. Badharudeen The Kerela High Court, while placing its reliance upon A.C.Narayanan v. State of Maharashtra &anr, reiterated that a complaint filed under Section 138 of the Negotiable Instruments Act through power of attorney holder is perfectly legal and competent. However, it observed that the power of attorney holder can depose and verify on oath before the Court, for proving the contents of a complaint, only when he has witnessed the transaction as an agent of the payee/ holder in due course or possess due knowledge regarding the said transactions. The Court further opined that the complainant has to make specific assertions as to the knowledge of the power of attorney in the said transaction explicitly in the complaint....

Sec.138 Negotiable Instruments Act- Important Supreme Court & High Court Judgments of 2023

Gyanvi Khanna

Tags