S. 138 NI Act- no date of demand & advancement of loan mentioned in complaint nor in affidavit -

S. 138 NI Act- no date of demand & advancement of loan mentioned in complaint nor in affidavit - No receipt was taken  No security document executed  rightly held by Court below that presumption u/s 139 NI Act duly rebutted by accused. Sanjeev v. Sumit, Crl. Misc. A-1639/15, 12.1.17 P&Hwww.ilfsu.in

Supreme Court Changes ground rule under Section 138 of Negotiable Instruments Act to prosecute a person who had presented the cheque which bounced for insufficiency of funds.

Supreme Court Changes ground rule under Section 138 of Negotiable Instruments Act to prosecute a person who had presented the cheque which bounced for insufficiency of funds. Through this judgment, SC provides relief to the holders of bounced cheques under the provisions of the Negotiable Instruments Act What is a Negotiable Instrument? The word negotiable means ‘transferable by delivery’ and the word instrument means ‘a written document by which a right is created in favour of some person’. The transfer should be unrestricted and in good faith. Therefore, a negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document. It is an indebtedness to pay an amount and the negotiable instrument is an unconditional guarantee for the same. Some Examples of Negotiable instruments are Promissory notes, Cheques, Bills of Exchange, bearer bonds, bank notes etc. The Indian law on Negotiable instruments is governed by the Negotiable Instruments Act of 1881. About the Act The Negotiable Instruments Act 1881 was passed in 1882 and was amended in 1989 and 2002, Before 1988 there was no provision to restrain the person issuing the Cheque without having sufficient funds in his account. The only remedy against a Dishonoured cheque was a civil liability accrued. In order to ensure promptitude and remedy against the defaulters of the Negotiable Instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 by amending it with Negotiable Instruments Act, 1988. The second noteworthy amendment was when the parliament enacted the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 which is intended to plug the loopholes. This amendment Act inserts five new sections from 143 to 147 touching various limbs of the parent Act. This act is applicable to the whole of India including the state of Jammu and Kashmir, which was brought under the purview of the act in 1956. Objective The objective of the act is to define the various negotiable instruments such a, promissory notes, bills of exchange, cheque etc. Also to prescribe the liability in case of a failure of the instrument to fulfill its debt due to the default on the part of the payer or to curb scrupulous practices adopted to escape liability in respect of negotiable instruments. However, Section 138 in regard to dishonor of cheque attracts criminal liability. Law on Negotiable Instrument, Section 138 It is manifest that to constitute an offense under Section 138 of the Act; the following ingredients are required to be fulfilled a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability; that cheque has been presented to bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier; that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank; the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice; READ MORE : PROCEDURE FOR A CHEQUE BOUNCE CASE To put it in simpler terms the law stated that the person must owe some amount of money to another and draws a cheque in that regard to fulfil that liability, the cheque be drawn on an account in a bank by him. The cheque was then presented to the bank within 3 months of the date on which it is drawn. However due to insufficiency of funds the cheque is returned by the bank unpaid. The payee (the bank) makes a demand for payment of said amount which the person owed within 30 days of the information received by him (the person who owed the money) that the cheque was returned unpaid; and thereafter the person fails to pay the amount within 15 days of the notice by the bank. Latest Law By a landmark judgment, Dashrath Roopsingh Rathod Vs. Stae of Maharashtra & Anr. In this case, the Supreme Court has changed the basic criteria under Section 138 of Negotiable Instruments Act which is to prosecute a person who had presented the cheque which had been returned due to insufficiency of funds or if the amount exceeds the amount in the bank of the payer. Earlier, a case under Section 138 could be initiated by the holder of the cheque at his place of business or residence. But, a bench of justices TS Thakur, Vikramjit Sen and C Nagappan ruled that the case has to be initiated at the place where the branch of the bank on which the cheque was drawn is located. And the judgment would apply retrospectively. This means, lakhs of cases pending in various courts across the country would witness a interstate transfer of cheque bouncing cases. The bench said: “In this analysis, we hold that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located.” Looking for more clients? Register - free Example: Mr. X who resides in Chennai owes Rs. 1 Lakh to Mr. B who resides in Chandigarh, Mr. X issues a cheque in delhi in favour of Mr. B. The cheque bounces in Ludhiana (place of bank where the cheque is given by Mr. B) for insufficiency of funds. According to the earlier law Mr. X could have chosen any of the four places. But by the recent judgment the only place for institution of case would be Ludhiana, i.e. where the cheque has dishonored at the payee bank which is located in Ludhiana in this example. Reasons for passing the new law The rationale behind this change is that the payers majority being businessmen and traders were using extending credit recklessly and due to the leniency in the provision of Section 138, it was being misused in regards to the place of institution, as sometime the payer had no concern with the place where the cheque was issued and to unnecessarily harass the payee cause hardship of place of institution of case according to their convenience. To curb this practice this judgment aims to get to the root of the issue and resolve it by a strict approach so as to discourage the payer from misusing or carelessly issuing cheques. The hardship of traveling to the location of drawee bank is now on the payer. The change in the existing law shifts the inconvenience and hardship on the payer because now he would have to travel to the place of the drawee bank where the cheque gets dishonored due to insufficiency of funds. Hence, guaranteeing more precaution by the payer at the time of issuing the cheque. http://www.vakilno1.com/legalviews/landmark-supreme-court-judgment-sec-138-negotiable-instruments-act.html Note:- We try our level best to avoid any kind of abusive content posted by users. Kindly report to us if you notice any. This report may be copied from a news/channel/magazine/blog/site for knowledge sharing, where PathLegal DISCLAIM any ownership of the content posted and offer NO

Dishonour-of-post-dated-cheques-is-not-an-offence-under-NI-

http://www.lawyersclubindia.com/judiciary/SC-Dishonour-of-post-dated-cheques-is-not-an-offence-under-NI-Act-3984.asp

Amendment To Negotiable Instruments Act, 1881

Hon'ble Supreme Court in its judgment dated August 1, 2014 in the case of Dashrath Rupsingh Rathod vs. State of Maharashtra and another (Criminal Appeal No. 2287 of 2009) inter alia held that the territorial jurisdiction for dishonor of cheques is restricted to the Court within whose local jurisdiction the offense was committed i.e. where the cheque is dishonoured by the Bank on which it is drawn.

Pursuant to the said judgment of the Supreme Court number of pending proceedings under Section 138 of the NI Act, were transferred to the Courts having jurisdiction as per the said judgment. Further, various representations were made to the Government, inter alia by industry associations and financial institutions expressing their concerns about the wide impact of the said judgment on the business interest since the same would offer undue protection to defaulters at the expense of the Complainants.

Considering various aspects and to address the difficulties faced by the payee of cheques in filing the case under section 138 of the NI Act, the bill No. 151-C of 2015 ("Earlier Bill") was introduced to amend the provisions of NI Act, which was passed by Lok Sabha on May 13, 2015. In said amendment bill it was inter alia proposed to amend the section 142 of NI Act, and following sub-section was proposed to be inserted:

"... The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction, the bank branch of the payee, where the payee presents the cheque for payment, is situated..."

Since the aforesaid bill was pending for consideration before Rajya Sabha and Parliament was not in Session, the Negotiable Instruments (Amendment) Ordinance, 2015 has been promulgated by the President on 15 June, 2015 ("said Ordinance") which, inter alia, provides the following amendment in relation to the territorial jurisdiction of the Court to try and entertain a complaint filed under Section 138 of the NI Act. The said Ordinance is currently in force.

In the principal Act, Section 142 shall be numbered as sub-section (1) thereof and after sub-section (1) as so numbered, the following sub-section shall be inserted, namely:

"(2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction-

1. If the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or
2. If the cheque is presented for payment by the payee or holder in due course otherwise through an account, the branch of the drawee bank where the drawer maintains the account, situated.

Explanation: For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account".

Further, to inter-alia clarify the position regarding the pending/transferred cases, the said Ordinance, provides for insertion of new Section 142A.

"142A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any judgement, decree, order or directions of any court, all cases arising out of section 138 which were pending in any court, whether filed before it, or transferred to it, before the commencement of the Negotiable Instruments (Amendment) Ordinance, 2015 shall be transferred to the court having jurisdiction under sub-section (2) of section 142 as if that sub-section had been in force at all material times.

(2) Notwithstanding anything contained in sub-section c(2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under subsection (1), and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.

(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Ordinance , 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142 before which the first case was filed and is pending, as if that sub-section had been in force at all material times."

The Earlier Bill dated 6th May, 2015 has been withdrawn on 24th July, 2015 and a new Bill No. 186 of 2015 to amend the NI Act, on similar lines of provisions of said Ordinance, was introduced in Lok Sabha on 27th July, 2015 and was passed by Lok Sabha on 6th August, 2015. The said new bill is pending to be introduced in Rajya Sabha.

Conclusion:

Pending the passing of said new bill, the said Ordinance holds the field and is now in force. The jurisdiction for filing and transfer of complaints under Section 138 of NI Act is currently governed by the said Ordinance i.e. jurisdiction depends on the place where the payee maintains the bank account.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Landmark Supreme Court Judgment on Sec 138 of Negotiable Instruments Act

Supreme Court Changes ground rule under Section 138 of Negotiable Instruments Act to prosecute a person who had presented the cheque which bounced for insufficiency of funds. Through this judgment, SC provides relief to the holders of bounced cheques under the provisions of the Negotiable Instruments Act

What is a Negotiable Instrument?

The word negotiable means ‘transferable by delivery’ and the word instrument means ‘a written document by which a right is created in favour of some person’. The transfer should be unrestricted and in good faith.
Therefore, a negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document. It is an indebtedness to pay an amount and the negotiable instrument is an unconditional guarantee for the same.

Some Examples of Negotiable instruments are Promissory notes, Cheques, Bills of Exchange, bearer bonds, bank notes etc.

The Indian law on Negotiable instruments is governed by the Negotiable Instruments Act of 1881.

About the Act

The Negotiable Instruments Act 1881 was passed in 1882 and was amended in 1989 and 2002, Before 1988 there was no provision to restrain the person issuing the Cheque without having sufficient funds in his account. The only remedy against a Dishonoured cheque was a civil liability accrued. In order to ensure promptitude and remedy against the defaulters of the Negotiable Instrument a criminal remedy of penalty was inserted in Negotiable Instruments Act, 1881 by amending it with Negotiable Instruments Act, 1988. The second noteworthy amendment was when the parliament enacted the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 which is intended to plug the loopholes. This amendment Act inserts five new sections from 143 to 147 touching various limbs of the parent Act. This act is applicable to the whole of India including the state of Jammu and Kashmir, which was brought under the purview of the act in 1956.

Objective

The objective of the act is to define the various negotiable instruments such a, promissory notes, bills of exchange, cheque etc. Also to prescribe the liability in case of a failure of the instrument to fulfill its debt due to the default on the part of the payer or to curb scrupulous practices adopted to escape liability in respect of negotiable instruments. However, Section 138 in regard to dishonor of cheque attracts criminal liability.

Law on Negotiable Instrument, Section 138

It is manifest that to constitute an offense under Section 138 of the Act; the following ingredients are required to be fulfilled[1]

1. a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account
2. the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
3. that cheque has been presented to bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
4. that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
5. the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
6. the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;

To put it in simpler terms the law stated that the person must owe some amount of money to another and draws a cheque in that regard to fulfil that liability, the cheque be drawn on an account in a bank by him. The cheque was then presented to the bank within 3 months of the date on which it is drawn. However due to insufficiency of funds the cheque is returned by the bank unpaid. The payee (the bank) makes a demand for payment of said amount which the person owed within 30 days of the information received by him (the person who owed the money) that the cheque was returned unpaid; and thereafter the person fails to pay the amount within 15 days of the notice by the bank.

Latest Law

By a landmark judgment, Dashrath Roopsingh Rathod Vs. Stae of Maharashtra & Anr.

In this case, the Supreme Court has changed the basic criteria under Section 138 of Negotiable Instruments Act which is to prosecute a person who had presented the cheque which had been returned due to insufficiency of funds or if the amount exceeds the amount in the bank of the payer.

Earlier, a case under Section 138 could be initiated by the holder of the cheque at his place of business or residence. But, a bench of justices TS Thakur, Vikramjit Sen and C Nagappan ruled that the case has to be initiated at the place where the branch of the bank on which the cheque was drawn is located.

And the judgment would apply retrospectively. This means, lakhs of cases pending in various courts across the country would witness a interstate transfer of cheque bouncing cases.

The bench said: “In this analysis, we hold that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located.”

Example: Mr. X who resides in Chennai owes Rs. 1 Lakh to Mr. B who resides in Chandigarh, Mr. X issues a cheque in delhi in favour of Mr. B. The cheque bounces in Ludhiana (place of bank where the cheque is given by Mr. B) for insufficiency of funds.

According to the earlier law Mr. X could have chosen any of the four places. But by the recent judgment the only place for institution of case would be Ludhiana, i.e. where the cheque has dishonored at the payee bank which is located in Ludhiana in this example.

Reasons for passing the new law

The rationale behind this change is that the payers majority being businessmen and traders were using extending credit recklessly and due to the leniency in the provision of Section 138, it was being misused in regards to the place of institution, as sometime the payer had no concern with the place where the cheque was issued and to unnecessarily harass the payee cause hardship of place of institution of case according to their convenience. To curb this practice this judgment aims to get to the root of the issue and resolve it by a strict approach so as to discourage the payer from misusing or carelessly issuing cheques. The hardship of traveling to the location of drawee bank is now on the payer.

The change in the existing law shifts the inconvenience and hardship on the payer because now he would have to travel to the place of the drawee bank where the cheque gets dishonored due to insufficiency of funds. Hence, guaranteeing more precaution by the payer at the time of issuing the cheque.

Govt to amend NI Act to deal with cheque bounce cases

Finance Minister Arun Jaitley today said the government is considering further amending the Negotiable Instrument (NI) Act to effectively deal with lakhs of cheque bounce cases by reducing timeframe for resolution of such disputes.

"As we move faster on the path of digital transactions and cheque payments, we need to ensure the payees of dishonoured cheques are able to realise the payments. The government is therefore considering the option of amending the Negotiable Instruments Act suitably," Finance Minister Arun Jaitley said while presenting the Budget in Parliament.

"After cheque bounce, the litigation process is very complex and takes time. So, for traders with a bounced cheque, litigation takes a long time to recover the money," he said.

The Department of Financial Services is working on amendment of the NI Act to ensure the time taken to redress the cheque bounce cases is compressed, the finance minister said.

There are some suggestions that the persons whose cheque bounces should be allowed to defend the case only after depositing the money in the court first, he said.

In 2015, Parliament passed amendment to the Negotiable Instrument Act providing for filing of cheque bounce cases at the place where a cheque is presented for clearance and not the place of issue.

The amendments in the Act had implications for over 18 lakh cheque bounce cases pending in various courts.

When security cheques would fall within purview of S 138 of NI Act?

When security cheques would fall within purview of S 138 of NI Act?

http://www.lawweb.in/2015/09/when-security-cheques-would-fall-within.html?m=1

Negotiable Instruments Act (1881), Ss. 141,138 - Offence by company - Complaint against non-signatory directors -

JUDGEMENTOF THE DAY*
*⭐S.138 NI Act, all Directors can't be liable:*
*Negotiable Instruments Act (1881), Ss. 141,138 - Offence by company - Complaint against non-signatory directors - Maintainability - Bald averment that accused directors are also liable for day-to-day business of Company along with Managing Director - However, there is no material averment in complaint as to how they are liable - Mere serving of notice and their silence even with no reply, does not make them liable - Cognizance taken by Magistrate in case of said directors, not sustainable, liable to be Quashed*.
Case:
*Narendra Urarngi Vs. Greenmint India Agritech Pvt. Ltd.*
Citation:
*2016 ALL MR(Cri) JOURNAL 449*

Signed Cheque given to complaint, who entered his name as payee without instructions from accused -

138-NIA Acquittal Criminal-Cases High-Court Kerala

Signed Cheque given to complaint, who entered his name as payee without instructions from accused - Dishonour of cheque - Accused not liable Puneet Batish Advocate 6:21 pm Share to: URL Download Pdf Print KERALA HIGH COURT Before :- K. Hema, J. Crl.RP No. 4487 & 3275 of 2006. D/d. 21.03.2007. Jose - Petitioner Versus P.C. Joy - Respondent For the Petitioner :- R. Santhosh Babu, Advocate. For the Respondent :- Pirappancode V.S. Sudheer, Advocate.

One day delay in issuing demand notice to the accused persons by the original complainant as provided under Sec. 138(B) of the NI Act. such complaint is not maintainable and criminal case are hereby quashed and set aside.

One day delay in issuing demand notice to the accused persons by the original complainant as provided under Sec. 138(B) of the NI Act. such complaint is not maintainable and criminal case are hereby quashed and set aside.

Published by  admin at  December 10, 2016

ચેક રીટર્નના કેસમાં ડીમાંડ નોટીશ મોકલાવવામાં એક દિવસનું ડીલે થયેલ.જેથી નેગોશીએબલ ઇન્શટ્રુમેન્ટ એક્ટની કલમ ૧૩૮ અન્વયે આવી ફરિયાદ મેઇન્ટેનેબલ ન હોય ક્રિમીનલ કેસ રદ થવાને પાત્ર છે.

GUJARAT HIGH COURT

B.K.Sarkar Vs State Of Gujarat

Criminal Miscellaneous Application No. 9909 of 2007. Date :- 12/9/ 2007

M.R.Shah, J.

JUDGMENT :-

1 Rule. Mr.P.P.Majmudar, learned Advocate waives service of rule on behalf of respondent No.2. Mr.K.T.Dave, learned APP waives service of rule on behalf of respondent No.1.

2 By way of this application under Sec. 482 of the Criminal Procedure Code, the petitioners ” original accused have prayed for an appropriate order to quash and set aside the Criminal Case being No. 506/2005 pending in the Court of learned Chief Judicial Magistrate, Surendranagar under Sec. 138 of the Negotiable Instrument Act (‘N.I.Act’ for short).

3 A criminal case has been filed by respondent No.2 ” original complainant in the Court of Chief Judicial Magistrate, Surendranagar against the petitioners under Sections 138 read with Sec. 142 of the N.I.Act alleging inter-alia that the petitioners have given cheque No. 131423 dated 08.01.2005 for an amount of Rs.2,37,160/-. The said cheque was deposited in the Bank and same was returned by the Bank by written memo dated 19.01.2005 with an endorsement ‘insufficient funds’. It is the case on behalf of the complainant in the complaint that the original complainant received intimation with regard to the return of the cheque vide communication dated 22.01.2005 and statutory notice was send to the accused persons on 22.02.2005 by RPAD as well as by UPC. Said notice was received and/or served upon the accused persons on 01.03.2005 and accused persons gave evasive reply vide reply dated 11.03.2005. It is further averred in the complaint that as the petitioners’ contract work was in progress at Palanpur one day delay has been caused in giving notices. Therefore, it is requested to condone the delay of one day. Learned Chief Judicial Magistrate, Surnedranagar vide order 02.04.2005 issued summons upon the petitioners for the offences punishable under Section 138 of the NIAct by condoning the delay of one day in issuing the notice as contemplated under Sec. 138(b) of the NIAct. Being aggrieved and dissatisfied with the order passed by the learned Chief Judicial Magistrate, Surendranagar in issuing the summons upon the petitioners under Sec. 138 of the NIAct by condoning delay of one day in issuing notice as contemplated under Section 138 of the NIAct, the petitioners ” original accused have preferred the present application under Sec. 482 of the Cr.P.C.

4 Mr.D.K.Dave, learned Advocate appearing on behalf of the petitioners has vehemently submitted that the learned Chief Judicial Magistrate, Surendranagar has materially erred in issuing the summons upon the petitioners by condoning the delay of one day in issuing notice as contemplated under Sec. 138(b) of the Act. It is submitted by Mr.Dave, learned Advocate that notice as contemplated under Sec. 138(b) of the NIAct was not issued within a period of one month from the date of intimation from the Bank with regard to return of the cheque, therefore, the complaint itself is not maintainable. It is further submitted by him that under the provisions of the NIAct more particularly Section 138 read with Sec. 142 of the NI Act, there is no power with the learned Magistrate to condone the delay in issuing notice as contemplated under Section 138 of the NI Act. It is submitted that therefore, condonation of delay of one day under Sec. 138 of the NIAct, is without jurisdiction and issuance of summons upon the petitioners by condoning delay of one day in issuing notice under Sec. 138(b) of the NI Act, requires to be quashed and set aside. It is also further submitted that consequently the impugned complaint / criminal case itself requires to be quashed and set aside as the same is not maintainable. It is further submitted by him that provisions of NIAct more particularly Section 138 of the NIAct and time limit prescribed / stipulated in Sec. 138 of the NIAct are to be complied with strictly. Unless there are any powers to condone the same, no such condonation is permissible. Under the circumstances, it is requested to allow the present application and quash and set aside the impugned complaint / criminal case as the same is not maintainable.

5 On the other hand, Mr.P.P.Majmudar, learned Advocate appearing on behalf of respondent No.2 ” original complainant has relied upon under Sec. 142 of the NIAct, and has submitted that the learned Magistrate has got powers to condone the delay in filing the complaint within one month as provided in Sec. 142 of the NI Act more particularly Sec. 142(b) of the NI Act; it is to be presumed that the learned Magistrate is always having powers to condone other delays also such as delay in issuing notice as contemplated in Sec. 138 of the NIAct. He has further submitted that statue is to be read as whole. He has submitted that the complaint should not be quashed on technical ground looking to the object and purpose of enactment of Sec. 138 of the NIAct. He has further submitted that when the learned Magistrate has exercised discretion in condoning delay of one day in issuing notice as contemplated under Sec. 138 of the NI Act, same is not required to be interfered by this Court in exercise of inherent jurisdiction under Sec. 482 of the Cr.P.C. Under the circumstances, it is requested to dismiss present application.

6 Mr.K.T.Dave, learned APP has requested to pass an appropriate order by submitting that as such there are no powers vested with the learned Magistrate to condone delay in issuing notice as contemplated under Sec. 138(b) of the NIAct. Therefore, issuance of summons by the learned trial Court by condoning delay in one day in issuing notice as contemplated under Sec. 138(B) of the Act is without jurisdiction. He has also further submitted that provisions of Section 138 of the NIAct are to be construed and followed strictly.

7 Heard the learned Advocates appearing on behalf of the respective parties.

8 It is an admitted position that there is delay of one day in issuing notice by the complainant as contemplated under Sec. 138 of the NI Act. As per Section 138(b) of the Act, a complainant and/or person holder in due course of the cheque is required to issue notice upon the accused persons within 30 days of intimation from the Bank of dishonor of cheque/ instrument. There is no power to condone delay in issuing notice as contemplated under Sec. 138(b) of the Act. Sec. 138 of the NIAct reads as under:

“Section 138 : Dishonour of cheque for insufficiency, etc., of funds in the account- Where any cheque drawn by a persons on an account maintained by him with a banker for payment of any amount of money to another persons from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said account of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.”

The only power under the NIAct to condone delay is provided under Sec. 142 of the NI Act, whereby it is provided that criminal complaint/case is required to be filed before the learned Magistrate within one month after completion of 15 days i.e. time limit as provided under Sec. 138 of the NI Act. However, for some reasons the complaint could not be filed within one month, the learned Magistrate is empowered to condone delay on sufficient grounds. Under the circumstances, whenever the Legislature has intended to condone the delay, same is provided and no such condondation of delay is provided in Sec. 138 of the NIAct. Under the circumstances, to condone delay in issuance of notice as contemplated under Sec. 138(b) of the NIAct would be to supplement to something what is not provided by the Legislature. Something which is not provided by the Legislature cannot be read in between. The provisions of statue, more particularly Sec. 138 of the NIAct is required to be complied with strictly and any deviation would entail consequences of non-maintainability of complaint. Under the circumstances, the contention on behalf of respondent No.2 ” original complainant to read powers of the learned Magistrate to condone the delay by issuing notice under Sec. 138(b) of the NIAct considering provisions of Sec. 142 cannot be accepted. Power to condone delay as provided under Section 142 of the NIAct is to be read and considered only with regard to delay in filing the complaint within period of one month and it cannot be extended to condone delay with regard to other lapses more particularly delay in issuing notice as contemplated under Sec. 138(b) of the NIAct.

The contention on behalf of respondent No.2 that the complaint should not be quashed on technical ground is concerned, it is required to be noted that whenever statue provides something to be done within stipulated time, same must be construed and compiled with strictly and any deviation would be considered acting contrary to the legislative intent and/or contrary to the statue. Under the circumstances, when it is provided under Sec. 138(b) of the NIAct that notice must be issued within a period of one month from the date of intimation from the Bank with regard to dishonour of cheque/instrument, same must be construed strictly and to dismiss the complaint and/or non-maintainability of the complaint if notice is not issued within stipulated time as provided under Section 138(b) of the NI Act is concerned, it cannot be said that the complainant is not non-suited on technical ground. On the contrary same would be in consonance with the provisions of the statue and legislative intent. Under the circumstances, the learned Chief Judicial Magistrate, Surendranagar has committed error in issuing summons upon the petitioners for the offences punishable under Sec. 138 of the NIAct by condoning delay of one day in issuing notice by the original complainant as provided under Sec. 138(B) of the NIAct. When the notice has not been issued beyond 30 days of receipt of intimation from the Bank, complaint under Sec. 138 of the NIAct is not maintainable. Under the circumstances, impugned complaint/criminal case itself is not maintainable, and the same requires to be quashed and set aside by exercising powers under Sec. 482 of the Cr.P.C.

9 For the reasons stated above, the petition succeeds. The impugned complaint / criminal case No. 506 of 2005 pending in the Court of learned Chief Judicial Magistrate, Surendranagar as well as summons issued by the learned C.J.M., Surendranagar in the aforesaid criminal case are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. However, it is made clear that it is always open for the original complainant to avail other remedies available to him for releasing of the cheque amount if it is permissible under any other law.

When cheque amount is more than actual debt,offence u/s 138 of NI Act is not made out

When cheque amount is more than actual debt,offence u/s 138 of NI Act is not made out

Based on the entire evidence on record the learned trial court has come to the conclusion that the complainant could not prove his case beyond doubt and the accused could rebut the presumption. Considering the case of the accused and testing the same on the touchstone of entire evidence on record, I am of the view that by preponderance of probabilities, the accused has been able to prove that the cheque amount is more than the actual debt. In such circumstances, it cannot be said that the trial Court committed an error in holding that the complainant could not prove his case. The accused has therefore, been rightly acquitted of the offence punishable under Section 138 of the Act. No interference with the impugned judgment and order is called for, even if it is felt that another view is possible. In the result, the appeal is dismissed.

IN THE HIGH COURT OF BOMBAY (PANJI BENCH)

Criminal Miscellaneous Application No. 54 of 2013 in Stamp Number Main No. 292 of 2013

Decided On: 04.12.2013

Appellants: Mr. Anant Bondre
Vs.
Respondent: Mr. Alfred David Fernandes and Anr.

Hon'ble Judges/Coram:U.V. Bakre, J.

Citation;2014(2)Crimes 33 Bom

Dishonour of cheque _ Power to stop proceedings _ Provisions of section 258 of Cr.P.C. not applicable to the summons case instituted upon a complaint

Dishonour of cheque _ Power to stop proceedings _ Provisions of section 258 of Cr.P.C. not applicable to the summons case instituted upon a complaint _ Not clear as to under what provisions of law, the Magistrate passed an order of dropping the proceedings _ Being a private complaint, the provisions u/s 258 of Cr.P.C. are not applicable.
2016 (12) LJSOFT  69

RBI spelling should be written as LAKH not LAC on cheques

IMP UPDATE FROM RBI.....

As per new guidelines given by RBI spelling should be written as LAKH  not LAC on cheques
1) One lakh rupees is right
2) not to write One lac rupees..it may get dishonoured

Pls share with Ur  friends & clients...

Negotiable Instruments Act (1881), Ss. 141,138 - Offence by company - Complaint against non-signatory directors -

JUDGEMENTOF THE DAY*
*⭐S.138 NI Act, all Directors can't be liable:*
*Negotiable Instruments Act (1881), Ss. 141,138 - Offence by company - Complaint against non-signatory directors - Maintainability - Bald averment that accused directors are also liable for day-to-day business of Company along with Managing Director - However, there is no material averment in complaint as to how they are liable - Mere serving of notice and their silence even with no reply, does not make them liable - Cognizance taken by Magistrate in case of said directors, not sustainable, liable to be Quashed*.
Case:
*Narendra Urarngi Vs. Greenmint India Agritech Pvt. Ltd.*
Citation:
*2016 ALL MR(Cri) JOURNAL 449*

Over writing on the figureson the cheque