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Company Director or Authorised Signatory of cheque is not a Drawer in terms of Section 143A of NI Act and cannot be directed to pay interim compensation under Section 143A – Shri Gurudatta Sugars Marketing Pvt. Ltd. Vs. Prithviraj Sayajirao Deshmukh and Ors. – Supreme Court

In this Landmark Judgment, the Hon’ble Supreme Court upheld the ratio of Lyka Labs Limited and Anr. v. The State of Maharashtra and Anr. (2023) ibclaw.in 131 HC and held that:

(i) The general rule against vicarious liability in criminal law underscores that individuals are not typically held criminally liable for acts committed by others unless specific statutory provisions extend such liability.
(ii) The High Court rightly emphasized that liability under Section 141 arises from the conduct or omission of the individual involved, not merely their position within the company.
(iii) The distinction between legal entities and individuals acting as authorized signatories is crucial.
(iv) This principle, fundamental to corporate law, ensures that while authorized signatories can bind the company through their actions, they do not merge their legal status with that of the company.
(v) The drawer under Section 143A of NI Act refers specifically to the issuer of the cheque, not the authorized signatories.
(vi) The judgment in Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd. (2017) ibclaw.in 821 SC nowhere lays down that directors or authorised signatories would come under the ambit of ‘drawer’ for the purposes of Section 143A.
(vii) An authorized signatory is not a drawer of the cheque, as established in N. Harihara Krishnan Vs. J. Thomas (2017) ibclaw.in 964 SC.

Company Director or Authorised Signatory of cheque is not a Drawer in terms of Section 143A of NI Act and cannot be directed to pay interim compensation under Section 143A – Shri Gurudatta Sugars Marketing Pvt. Ltd. Vs. Prithviraj Sayajirao Deshmukh and Ors. – Supreme Court Read Post »

When a statute provides an alternative remedy, the petitioner cannot be permitted to circumvent such remedy and approach this Court under Article 226 of the Constitution of India only in order to avoid the pre-deposit which is the hallmark of Rule 61 of the II Schedule of the Income Tax Act, 1961 and/or Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 – Paritran Medical College and Hospital Vs. Punjab National Bank and Ors. – Jharkhand High Court

Hon’ble High Court held that when a statute provides an alternative remedy, the petitioner cannot be permitted to circumvent such remedy and approach this Court under Article 226 of the Constitution of India only in order to avoid the pre-deposit which is the hallmark of Rule 61 of the II Schedule of the Income Tax Act, 1961 and/or Section 30 of the Recovery of Debts and Bankruptcy Act, 1993

When a statute provides an alternative remedy, the petitioner cannot be permitted to circumvent such remedy and approach this Court under Article 226 of the Constitution of India only in order to avoid the pre-deposit which is the hallmark of Rule 61 of the II Schedule of the Income Tax Act, 1961 and/or Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 – Paritran Medical College and Hospital Vs. Punjab National Bank and Ors. – Jharkhand High Court Read Post »

Whether the trial court has jurisdiction to entertain the application under Section 9 of Arbitration and Conciliation Act, 1996 and to pass an interim injunction on the said application or not – Welspun Enterprises Ltd. Vs. Ravi Infrabuild Projects Pvt. Ltd. – Rajasthan High Court

Hon’ble High Court held that Section 9 of the Arbitration and Conciliation Act, 1996 enables a party to apply to a court before or during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced for an interim measure of protection in respect of certain matters, which includes securing the amount in dispute in the arbitration. We are of the opinion that the case of the respondent No.1 is covered under Section 9(1)(b) of the Act of 1996. Section 37 of the Act of 1996 starts with a non-obstante clause and provides that an appeal shall lie against certain orders to the Court authorised by law to hear appeals and that includes the granting or refusing to grant any measure under Section 9 of the Act of 1996. We have no hesitation in holding that the trial court has no jurisdiction to entertain the application under Section 9 of the Act of 1996 preferred on behalf of the respondent No.1 and has erred in passing the impugned order.

Whether the trial court has jurisdiction to entertain the application under Section 9 of Arbitration and Conciliation Act, 1996 and to pass an interim injunction on the said application or not – Welspun Enterprises Ltd. Vs. Ravi Infrabuild Projects Pvt. Ltd. – Rajasthan High Court Read Post »

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