Case Laws-NI-High Courts

Once the signature of an accused on the cheque/negotiable instrument is established, the “reverse onus” clauses become operative and in such situation, obligation shifts upon the accused to discharge the presumption imposed upon him – Wipro Ltd., Cuttack Vs. Prasanna Kumar Baral – Orissa High Court

Section 139 of NI Act which speaks about presumption in favour of holder of cheque in the following terms that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. A plain reading of aforesaid statutory presumptions relating to dishonor of cheque makes it ample clear that the complainant has to establish by way of leading evidence that he or she is the holder of cheque and the cheque was issued by the accused, but when the same was presented got dishonored. Once these facts are established by the complainant, the burden turns to the accused to rebut the presumption that the cheque was issued not for any debt or other liability. In other words, once the complainant establishes that the cheque was issued by the accused and the same got dishonored on presentation, the accused has to establish through evidence to rebut the statutory presumption attached for dishonor of cheque, which was issued by him, was issued not for discharge of any debt or other liability.

Once the signature of an accused on the cheque/negotiable instrument is established, the “reverse onus” clauses become operative and in such situation, obligation shifts upon the accused to discharge the presumption imposed upon him – Wipro Ltd., Cuttack Vs. Prasanna Kumar Baral – Orissa High Court Read Post »

It is mandatory under Sections 143(A) and 148(3) of Negotiable Instruments Act, 1881, on the part of the Trial Court as well as the First Appellate Court to impose interim compensation payable by the accused persons while challenging the case and judgment of sentence in the appeals – Sri. Lakshminarayana Vs. Sri. Lokesh L. – Karnataka High Court

Hon’ble High Court held that the order passed by the First Appellate Court is not correct, as it is settled position of law under Sections 143(A) and 148(3) of NI Act, it is mandatory on the part of the Trial Court as well as the First Appellate Court to impose interim compensation payable by the accused persons while challenging the case and judgment of sentence in the appeals. Even on perusal of Section 148 of the Act, a proviso is also there that this fine amount imposed by the First  Appellate Court is also in addition to the interim compensation paid by the appellant under Section 143(A) of the NI Act and there is time limit also prescribed by the Legislature to deposit the said amount within 60 days and another 30 days, if any delay is condoned if sufficient cause shown and Sub Section (3) of Section 148 clearly reveals that the Appellate Court may direct to release the amount deposited by the appellant to the complainant at any time during the pendency of the appeals. However, the proviso also states that if the accused succeed in the appeal, there shall be an order of refund of the said amount with interest prescribed by the R.B.I at the relevant time of the final order

It is mandatory under Sections 143(A) and 148(3) of Negotiable Instruments Act, 1881, on the part of the Trial Court as well as the First Appellate Court to impose interim compensation payable by the accused persons while challenging the case and judgment of sentence in the appeals – Sri. Lakshminarayana Vs. Sri. Lokesh L. – Karnataka High Court Read Post »

In complaints under Section 138 of Negotiable Instruments Act, 1881, the Court has to presume that the cheque had been issued for a debt or liability – Sri Pradip Patangia Vs. Dr. Tarulata Saikia – Gauhati High Court

Hon’ble High Court held that in the present case and considering that the petitioners have not denied their signatures on the cheques in question and that even according to the petitioners, agreement was made between the parties for cancellation of execution of deed for sale of land, there is a presumption under Section 139 of the NI Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature and the same could only be done by adducing evidence at trial, but at this stage as the minute appreciation of evidence is not to be done complaint could not be quashed on this score. Therefore, at this stage of trial, the respondent/complainant is entitled for the presumption as provided under Section 139 of the NI Act.

In complaints under Section 138 of Negotiable Instruments Act, 1881, the Court has to presume that the cheque had been issued for a debt or liability – Sri Pradip Patangia Vs. Dr. Tarulata Saikia – Gauhati High Court Read Post »

Company’s authorized signatory of cheque is not drawer in terms of Sec. 143A of the Negotiable Instruments Act, 1881 and cannot be directed to pay interim compensation u/s 143A & A deposit of a minimum sum of 20% of the fine or compensation is not necessary in an appeal u/s 148 filed by persons other than “drawer”, however, power to direct such deposit is available u/s 389 of CrPC – Lyka Labs Ltd. & Anr. Vs. The State of Maharashtra & Anr. – Bombay High Court

In this case, questions of law before the Hon’ble High Court are (i) Whether the signatory of the cheque, authorized by the Company, is the “drawer” and whether such signatory could be directed to pay interim compensation in terms of section 143A of the Negotiable Instruments Act, 1881 (NI Act) living aside the company.
(ii) Whether a deposit of a minimum sum of 20% of the fine or compensation is necessary under Section 148 of NI Act in an appeal filed by persons other than “drawer” against the conviction and sentence under section 138 of the NI Act.
Hon’ble High Court held that:
(i) The signatory of the cheque, authorized by the “Company”, is not the drawer in terms of section 143A of the NI Act and cannot be directed to pay interim compensation under section 143A. (ii) In an appeal under section 148 of NI Act filed by persons other than “drawer” against the conviction under section 138 of the NI Act, a deposit of a minimum sum of 20% of the fine or compensation is not necessary. (iii) However, in an appeal filed by persons other than “drawer” against the conviction under section 138 of the NI Act such power to direct deposit of compensation is available with the Appellate Court while suspending sentence under section 389 of code of criminal procedure.

Company’s authorized signatory of cheque is not drawer in terms of Sec. 143A of the Negotiable Instruments Act, 1881 and cannot be directed to pay interim compensation u/s 143A & A deposit of a minimum sum of 20% of the fine or compensation is not necessary in an appeal u/s 148 filed by persons other than “drawer”, however, power to direct such deposit is available u/s 389 of CrPC – Lyka Labs Ltd. & Anr. Vs. The State of Maharashtra & Anr. – Bombay High Court Read Post »

In order to make a person vicariously liable for an offence committed by company under Section 138 of Negotiable Instruments Act, 1881, the first and foremost pre-condition is that the said person should either be a signatory of the cheque or should be holding a position in the company and should also be responsible for the conduct of the business of the company while holding such designation – Ridhima Jain Vs. M/s Interarch Building Products Pvt. Ltd. – Delhi High Court

Hon’ble High Court held that if an offence has been committed by a company, then every person, who at the time when the offence was committed, was In-Charge of and was responsible to the company in the conduct of the business, is liable to be proceeded against and punished accordingly. In order to make a person vicariously liable for an offence committed by company under Section 138 of the NI Act, the first and foremost pre-condition is that the said person should either be a signatory of the cheque or should be holding a position in the company and should also be responsible for the conduct of the business of the company while holding such designation. The complainant also has to plead the exact role and the manner by which the said person is alleged to be responsible for the commission of the alleged offence.

In order to make a person vicariously liable for an offence committed by company under Section 138 of Negotiable Instruments Act, 1881, the first and foremost pre-condition is that the said person should either be a signatory of the cheque or should be holding a position in the company and should also be responsible for the conduct of the business of the company while holding such designation – Ridhima Jain Vs. M/s Interarch Building Products Pvt. Ltd. – Delhi High Court Read Post »

Whether on account of non-payment of the amount as directed under Section 148 of the Negotiable Instruments Act, 1881, suspension of sentence granted to the appellant can be automatically or consequentially cancelled? – Amarjit Singh Vs. State of Punjab and another – Punjab & Haryana High Court

I. Case Reference Case Citation : (2023) ibclaw.in 35 HC Case Name : Amarjit Singh Vs. State of Punjab and

Whether on account of non-payment of the amount as directed under Section 148 of the Negotiable Instruments Act, 1881, suspension of sentence granted to the appellant can be automatically or consequentially cancelled? – Amarjit Singh Vs. State of Punjab and another – Punjab & Haryana High Court Read Post »

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