Negotiable instrument

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The Banking Public Financial Institutions and Negotiable Instruments (Amendment) Act, 1988 – Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact. 23. In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary = the absence of any details of the date on which the loan was advanced as also the absence of any documentary or other evidence to show that any such loan transaction had indeed taken place between the parties is a significant circumstance. So also the fact that the cheque was presented on the day following the altercation between the parties is a circumstance that cannot be brushed away. The version of the respondent that the cheque was not returned to him and the complainant presented the same to wreak vengeance against him is a circumstance that cannot be easily rejected. Super added to all this is the testimony of DW1, Jeevan Guru according to whom the accounts were settled between the father of the complainant and the accused in his presence and upon settlement the accused had demanded return of this cheque 27Page 28 given in lieu of the advance. It was further stated by the witness that the complainant’s father had avoided to return the cheque and promised to do so on some other day. There is no reason much less a cogent one suggested to us for rejecting the deposition of this witness who has testified that after the incident of altercation between the two parties the accused has been supplying milk to the witness as he is also in the same business. Non-examination of the father of the complainant who was said to be present outside the Court hall on the date the complainant’s statement was recorded also assumes importance. It gives rise to an inference that the non-examination was a deliberate attempt of the prosecution to keep him away from the court for otherwise he would have to accept that the accused was actually supplying milk to him and that the accused was given the price of the milk in advance as per the trade practice in acknowledgement and by way of security for which amount the accused had issued a cheque in question.

Page 1 Reportable IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 261 2013 (Arising out of SLP (Crl.) 6761/2010) VIJAY ..Appellant Versus LAXMAN & ANR. ..Respondents J U D G M E N T GYAN SUDHA MISRA, J. Leave granted. 2. This appeal by special leave which was heard at length at … Continue reading

scope and interpretation of sec.145[2] of N.I.Act=whether the petitioners/accused were not entitled to cross examine the complainant as regard to the entire facts contained in the affidavit of evidence of the complainant or their (petitioners‟) right of such a cross examination of the witness of the affidavit was limited to certain facts or their defences=In view of my above discussion, the impugned orders are modified to the extent that the cross examination of the complainant would not remain limited to the contents of Para 4 and 6 of the applications of the complainant, but shall also extend to the facts in addition to their defences, as may be deemed and essential by the learned Magistrate relevant in the facts and circumstances of the case keeping in view the object and scheme of the Act and particularly, provisions of Sections 139, 143 of the Act and Section 106 of Evidence Act.

Crl.M.Cs.3089/2011 & 3090/2011 Page 1 of 9 * THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 02.01.2012 Pronounced on: 11.01.2012 + CRL.M.C. NO. 3089/2011 M/S. SUKHDATA CHITS PVT. LTD. & ORS. …… Petitioner Through: Mr. Diwan Singh Chauhan, Advocate Versus SHRI RAJENDER PRASAD GUPTA …… Respondent Through: WITH CRL.M.C. NO. 3090/2011 PREM KUMAR … Continue reading

Negotiable Instruments Act, 1881-ss.141 & 138: Dishonour of cheque issued by proprietorship firm-Complaint against its employee-Held: Proprietary concern is not a company within meaning of s.141-Hence employee of such a concern cannot be proceeded against-Code of Criminal Procedure, 1973-s.482. Officence by company-Vicarious liability of the Director. Code of Civil Procedure, 1908-Order XXX, Rules 1 and 10-Partnership firm and proprietorship firm-Distinction between-Re-iterated. Respondent No. 1 filed complaint petition alleging commission of offence under Section 138 of the Negotiable Instruments Act. It was alleged that a cheque was issued by accused nos.2 to 6 for a sum of Rs. 2 Lakhs which on presentation was dishonoured. Accused no.1 was described as a business concern. Appellant arrayed as accused no. 3 was described as In charge, Manager, Director of accused no. 1. The Metropolitan Magistrate issued summons to the accused persons. Appellant filed application before High Court u/s. 482 CrPC for quashing the summons issued to him. The application was dismissed. Hence the present appeal. =Allowing the appeal, the Court HELD: 1. The concept of vicarious liability was introduced in penal statutes like Negotiable Instruments Act to make the Directors, partners or other persons, in charge of and control of the business of the Company or otherwise responsible for its affairs; the Company itself being a juristic person. [Para 8] [889-d] 2. A bare perusal of the complaint petition would show that the accused No. 1 was described therein as `a business concern’. It was not described as Company or a partnership firm or an Association of Persons. The description of the accused in the complaint petition is absolutely vague. A juristic person can be a Company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Indian Partnership Act, 1932 or an association of persons which ordinarily would mean a body of persons which is not incorporated under any statute. A proprietary concern, however, stands absolutely on a different footing. A person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs. A proprietary concern is not a Company. Company in terms of the explanation appended to Section 141 of the Negotiable Instruments Act, means any body- corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a Company, incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Indian Partnership Act. In view of the said description of “Director”, other than a person who comes within the purview thereof, nobody else can be prosecuted by way of his vicarious liability in such a capacity. If the offence has not been committed by a Company, the question of there being a Director or his being vicariously liable, therefore, would not arise. [Paras 7, 9 and 10] [889-c; E-g; 890-A] 3. Appellant categorically contended that accused No. 1 was a proprietary concern of the accused No. 2 and he was merely an employee thereof. If accused No. 1 was not a Company within the meaning of Section 141 of the Negotiable Instruments Act, the question of an employee being proceeded against in terms thereof would not arise. Respondent was aware of the difference between a `partnership firm’ and a `business concern’ as would be evident from the fact that it described itself as a partnership firm and the accused No. 1, as a business concern. Significantly, Respondent deliberately or otherwise did not state as to in which capacity the appellant had been serving the said business concern. It described him as in charge, Manager and Director of the accused No. 1. A person ordinarily cannot serve both in the capacity of a Manager and a Director of a Company. [Paras 11 and 12] [890-b-d] 4. The distinction between partnership firm and a proprietary concern is well known. It is evident from Order XXX Rule 1 and Order XXX Rule 10 of the Code of Civil Procedure. It is trite that a proprietary concern would not answer the description of either a Company incorporated under the Indian Companies Act or a firm within the meaning of the provisions of Section 4 of the Indian Partnership Act. [Paras 13 and14] [890-e; 891-d] S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, A.I.R. (2005) SC 3512, followed. Sahitha Ramamurthy & Anr. v. R.B.S. Channabasavaradhya, A.I.R. (2006) SC 3086 and S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2007) 3 SCALE 245, relied on. M/s. Ashok Transport Agency v. Awadhesh Kumar and Anr., [1998] 5 SCC 567, referred to. 5. For the reasons aforementioned, this Court is unable to agree with the High Court that no case had been made out for exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure. The complaint case against the appellant is quashed. [Paras 16 and 17] [891-f] G. Sivabalamurugan, Y. Arvnagiri and L.K. Pandey for the Appellant. Tatini Basu (for Sudhir Nandrajog) for the Respondent.

CASE NO.: Appeal (crl.) 485 of 2007 PETITIONER: Raghu Lakshminarayanan RESPONDENT: M/s. Fine Tubes DATE OF JUDGMENT: 05/04/2007 BENCH: S.B. Sinha & Markandey Katju JUDGMENT: J U D G M E N T CRIMINAL APPEAL NO. 485 2007 [Arising out of S.L.P. (Crl.) No. 4211 of 2006] S.B. SINHA, J. Leave granted. Appellant before us … Continue reading

Provincial Insolvency Act (5 of 1920), ss. 33, 75(1) and 80- Negotiable Instruments Act (26 of 1881), s. 118- Official Receiver-If bound to rely upon statutory presumption-High Court-Jurisdiction under s. 75(1) of the Insolvency Act.


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