Supreme Court Annual Digest 2023- Negotiable Instruments Act

Negotiable Instruments Act 1881 - Section 138, 147 - The nature of offence under section 138 of the N.I Act is primarily related to a civil wrong and is a compoundable offence. (Para 10) 2023 LiveLaw (SC) 75Negotiable Instruments Act 1881; Section 138 - Approval of resolution plan of corporate debtor will not extinguish the liability of erstwhile director for dishonour of cheque. (Para 17, 18 & 47, 52) 2023 LiveLaw (SC) 195Negotiable Instruments Act 1881; Section 138 - In a proceeding under Section 138 of the N.I. Act, the accused cannot rely upon other bank accounts for the dishonoured cheque which relates to specific bank account of the accused. (Para 6) 2023 LiveLaw (SC) 1046Negotiable Instruments Act 1881; Section 138 - Where the proceedings under Section 138 of the NI Act had already commenced and during the pendency the plan is approved or the company gets dissolved, the directors and the other accused cannot escape from their liability by citing its dissolution. (Para 52) 2023 LiveLaw (SC) 195Negotiable Instruments Act 1881; Section 141 (1) - It is not averred anywhere in the complaint that the appellant was in charge of the conduct of the business of the company at the relevant time when the offence was committed. What is stated in the complaint is only that the accused being the partners are responsible for the day-to-day conduct and business of the company. It is also relevant to note that an overall reading of the complaint would not disclose any clear and specific role of the appellant. The appellant has also got a contention that he retired from the partnership firm much prior to the issuance of the cheque in question. Held, that the averments in the complaint filed by the respondent are not sufficient to satisfy the mandatory requirements under Section 141(1) of the NI Act. Since the averments in the complaint are insufficient to attract the provisions under Section 141(1) of the NI Act, to create vicarious liability upon the appellant, he is entitled to succeed in this appeal. The appellant has made out a case for quashing the criminal complaint in relation to him, in exercise of the jurisdiction under Section 482 of Cr.PC. (Para 17) 2023 LiveLaw (SC) 869Negotiable Instruments Act 1881; Section 141 (1) - 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. (Para 16) 2023 LiveLaw (SC) 869Negotiable Instruments Act, 1881 - Once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. (Para 45) 2023 LiveLaw (SC) 866Negotiable Instruments Act, 1881 - Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly. (Para 55) 2023 LiveLaw (SC) 866Negotiable Instruments Act, 1881 - The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque. (Para 62) 2023 LiveLaw (SC) 866Negotiable Instruments Act, 1881 - When the Courts have concluded that the signature in the cheque ...

Supreme Court Annual Digest 2023- Negotiable Instruments Act

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