Case Laws-NI-Supreme Court

A mere designation as a director does not conclusively establish liability under section 138 read with section 141 of the Negotiable Instruments Act, 1881 (NI Act) – Kamalkishor Shrigopal Taparia Vs. India Ener-Gen Pvt. Ltd. and Anr. – Supreme Court

The Hon’ble Supreme Court held that:

(i) A mere designation as a director does not conclusively establish liability under section 138 read with section 141 of the Negotiable Instruments Act, 1881 (NI Act). Liability is contingent upon specific allegations demonstrating the director’s active involvement in the company’s affairs at the relevant time.
(ii) Mere directorship does not create automatic liability under the Act.
(iii) Non-executive directors cannot be held liable under section 138 NI Act unless specific evidence proves their active involvement.

A mere designation as a director does not conclusively establish liability under section 138 read with section 141 of the Negotiable Instruments Act, 1881 (NI Act) – Kamalkishor Shrigopal Taparia Vs. India Ener-Gen Pvt. Ltd. and Anr. – Supreme Court Read Post »

Can the benefit of the condonable period, which expired during the Court’s vacation, be granted when the petition is filed immediately after the reopening of the Court, in exercise of the power under Section 4 of the Limitation Act, 1963? – My Preferred Transformation & Hospitality Pvt. Ltd. and Anr. Vs. Faridabad Implements Pvt. Ltd. – Supreme Court

The Hon’ble Supreme Court has held that in light of the current position of law, the Section 34 application preferred by the appellant is barred by limitation based on the following conclusions:
(i) There is no wholesale exclusion of Sections 4 to 24 of the Limitation Act when calculating the limitation period under Section 34(3) of the ACA.
(ii) Section 4 of the Limitation Act applies to Section 34(3) of the ACA only to the extent when the 3-month period expires on a court holiday. It does not aid the applicant when the 30-day condonable period expires on a court holiday.
(iii) In view of the applicability of Section 4 of the Limitation Act to Section 34 proceedings, Section 10 of the GCA does not apply and will not benefit the applicant when the 30- day condonable period expires on a court holiday.

Can the benefit of the condonable period, which expired during the Court’s vacation, be granted when the petition is filed immediately after the reopening of the Court, in exercise of the power under Section 4 of the Limitation Act, 1963? – My Preferred Transformation & Hospitality Pvt. Ltd. and Anr. Vs. Faridabad Implements Pvt. Ltd. – Supreme Court Read Post »

To maintain a complaint and to frame a charge under Section 138 of the NI Act, there must be a specific averment against the person concerned that he was in-charge of, and responsible for the company concerned in the matter of conduct of its business – Ravi Dhingra Vs. State of NCT of Delhi and Anr. – Supreme Court

The law enunciated in the decision in Ashok Shewakramani & Ors. Vs. State of Andhra Pradesh & Anr. (2023) ibclaw.in 87 SC is that to maintain a complaint and to frame a charge under Section 138 of the NI Act, there must be a specific averment against the person concerned that he was in-charge of, and responsible for the company concerned in the matter of conduct of its business. This position is now well settled and is being followed with alacrity.

To maintain a complaint and to frame a charge under Section 138 of the NI Act, there must be a specific averment against the person concerned that he was in-charge of, and responsible for the company concerned in the matter of conduct of its business – Ravi Dhingra Vs. State of NCT of Delhi and Anr. – Supreme Court Read Post »

Legal validity of a complaint under Section 138 of Negotiable Instruments Act, 1881 (NI Act), filed by a Power of Attorney Holder on behalf of an Individual/ Proprietor – Naresh Potteries Vs. Aarti Industries and Anr. – Supreme Court

This judgment covers the following issues:

A. Section 142 of the NI Act creates a legal bar on the court from taking cognizance of any offence punishable under Section 138 of the NI Act
B. Who can file a complaint under Section 138 of NI Act, on behalf of an incorporated body
C. The legal validity of a complaint u/s 138 of NI filed by the power of attorney holder of an incorporated body
D. The power of attorney issued by the ‘payee’ who is an individual

Legal validity of a complaint under Section 138 of Negotiable Instruments Act, 1881 (NI Act), filed by a Power of Attorney Holder on behalf of an Individual/ Proprietor – Naresh Potteries Vs. Aarti Industries and Anr. – Supreme Court Read Post »

Circumstances when a sale of property by auction or other means may be set-aside after its confirmation | Henderson Principle | Applicability of Lis Pendens in case of subsequent transfer of the property sold under auction – Celir LLP v. Mr. Sumati Prasad Bafna and Ors. – Supreme Court

In this judgment, Hon’ble Supreme Court deals with the following points:
(i) Concept of Abuse of Process of Court and Collateral challenge to judgments that have attained finality.
(ii) Scope of Section 17 of the SARFAESI Act, 2002.
(iii) Once Borrower has elected to move the High Court for the very same cause of action and underlying prayers, the Borrower was precluded from pursuing its remedies before the DRT.
(iv) The ‘Henderson’ Principle as a corollary of Constructive Res-Judicata.
(v) Four situations where in second proceedings between the same parties doctrine res judicata as a corollary of the principle of abuse of process may be invoked
(vi) Applicability of Lis Pendens in the absence of any registration as required under the State Amendment to Section 52 of the Transfer of Property Act, 1882.
(vii) Interpretation of the Higher Court decisions.
(viii) Circumstances when a sale of property by auction or other means under the SARFAESI Act may be set-aside after its confirmation.

Circumstances when a sale of property by auction or other means may be set-aside after its confirmation | Henderson Principle | Applicability of Lis Pendens in case of subsequent transfer of the property sold under auction – Celir LLP v. Mr. Sumati Prasad Bafna and Ors. – Supreme Court Read Post »

The Appellate Court cannot reverse the order of acquittal only because another view could have been possibly taken based on the evidence on record – Susheela Yogish Bungle and Anr. Vs. V.T. Impex Ltd. and Anr. – Supreme Court

Hon’ble Supreme Court held that the law relating to interference in an appeal against acquittal is well-settled. The Appellate Court cannot reverse the order of acquittal only because another view could have been possibly taken based on the evidence on record. It is open for the Appellate Court to interfere with an order of acquittal only if, after re-appreciation of evidence, the Appellate Court concludes that the only possible finding which could be arrived at is that the guilt of the accused was established beyond a reasonable doubt.

The Appellate Court cannot reverse the order of acquittal only because another view could have been possibly taken based on the evidence on record – Susheela Yogish Bungle and Anr. Vs. V.T. Impex Ltd. and Anr. – Supreme Court Read Post »

Presumption under Negotiable Instruments Act, 1881 and Principles underlining the exercise of power to adjudicate a challenge against acquittal bolstered by concurrent findings – Sri Dattatraya Vs. Sharanappa – Supreme Court

This judgment covers:

A. Proceedings under Section 138 of the NI Act 1881 can be initiated even if the cheque was originally issued as security
B. Essential conditions under Section 138 of the NI Act, 1881
C. Cause of action
D.1 Presumption under Section 118 of NI Act
D.2 Presumption under Section 139 of NI Act
D.3 A reverse onus clause
D.4 Conclusion: Presumption under NI Act
D.5 Adducing evidence for rebuttal of the statutory presumption
E. Broad Principles: Adjudicate a challenge against concurrent findings

Presumption under Negotiable Instruments Act, 1881 and Principles underlining the exercise of power to adjudicate a challenge against acquittal bolstered by concurrent findings – Sri Dattatraya Vs. Sharanappa – Supreme Court Read Post »

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