Dihonour of cheque supreme court of

In other words, this provision of law is hailed by the lenders whereas the borrowers dread it the most as the dishonour of cheques may lead to months of imprisonment. The fact that an offence is complete need not necessarily lead to launch of prosecution especially when the offence is not a cognizable one.

The ruling in Bhaskaran was diluted in Harman Electronics Pvt. 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.

Holder — Of the cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. The Court further held that if the concept of successive causes of action were to be accepted the same would make the limitation under Section b otiose.

See Mosaraf Hossain Khan v. Properties of the Accused will be attached and will be sold by public auction. The ruling in Bhaskaran was diluted in Harman Electronics Pvt. Four cheques for a total sum of rupees ten lakhs were issued by the respondent-company on 14th August, in favour of the appellant which were presented to the bank for collection on 21st November, It was held that upon the completion of the offence, any Court, within whose jurisdiction, any one of the five acts took place, would have the requisite jurisdiction to try such case.

Supreme Court on Dishonour of Post-Dated Cheques Issued as Security

But once he gives a notice under clause b of Sectionhe forfeits such right for in case of failure of the drawer to pay the money within the stipulated time, he would be liable for offence and the cause of action for filing the complaint will arise. This Act provides that, once the cheque has been dishonoured, a notice needs to be issued by registered A.

For the prosecution of an offence under Section of the NI Act, the principal would not have to be present in person and the Attorney holder could testify on his behalf.

Supreme Court clarifies territorial jurisdiction The Supreme Court has: However, for day to day transactions, cheque is the most widely used negotiable instrument in businesses today. Filing a complaint under Section of the Act For filing a complaint, the complainant needs to follow these steps; 1.

A notice under clause b of proviso to Section was then issued by the appellant to the respondent on 8th January, demanding payment of the amount covered by the cheques.

Supreme Court on Prosecuting a Company for Cheque Dishonour

ISSUE Acknowledging the fact that it had become commonplace for the courts to encounter a notice issued under Section of the Negotiable Instruments Act,from a place that had no connection with the accused or with any facet of the transaction, the Court stated that misemployment insofar as the choice of place of suing now calls for a stricter interpretation of the statute.

Commission of Offence Relying on the decision in Harman, the Court held that the offence is committed when a cheque is drawn by an accused in discharge of debt or liability and such cheque is returned unpaid for insufficiency of funds or the amount exceeds the arrangement made with the bank.

The complainant will be required to file the complaint before the appropriate court within 30 days of such return. At that stage, it will not be a question of waiver of the right of the payee to prosecute the drawer but of absolution of the drawer of an offence, which stands already committed by him and which cannot Dihonour of cheque supreme court of committed by him again.

Having said that, we must add that one of the salutary principles of interpretation of statutes is to adopt an interpretation which promotes and advances the object sought to be achieved by the legislation, in preference to an interpretation which defeats such object.

The complaint should also be accompanied with all the important attachments i. The decision gives three distinct reasons why that should be so.

Therefore, in Section cases, the jurisdiction of the court to try the offence should be based on where the cheque was dishonoured and not where the notice was issued as it would not be the location of the offence; Supreme Court further has provided the following approach should be followed for pending Section Cases: The cheques were accordingly presented for the second time to the bank on 21st January, and were dishonoured for a second time in terms of a memo dated 22nd January, once again on the ground of insufficiency of funds.

The court held that, the new Ordinance vests jurisdiction for initiating proceedings under Sectioninter alia, in territorial jurisdiction of court where cheque is delivered for collection through an account of branch of bank where payee or holder in due course maintains an account. Yashpal Singh and Anr.

Click to Login as an existing user or Register so you can print this article. Shamsher Singh Gogi 9 where the court had set out the essential ingredients for an offence under Section of the NI Act 10 and on the basis of those principles held that it was legally impermissible to attribute criminal liability to a person because of the actions of a third person.

Pending Cases Having decided the issue of appropriate territorial jurisdiction, the Court considered the various options available in regard to the cases that are pending before the various Courts in India. The post-dated cheque is not payable till the date which is shown on the face of the said document.

When the cheque was dishonoured, the complainant, Mr.Saxons Farms, the Supreme Court held that the object of the notice is to give a chance to the drawer of cheque to rectify his omission and also to protect an honest drawer.

The service of notice of demand in clause (B) of Section is a condition precedent for filing a complaint u/Section of NI Act.

Cheque Dishonour

Trial of cheque dishonour pending for nearly a decade- Direction by Supreme Court that if the appellants file applications in terms of Section of the Code for dispensing with their personal attendance, the trial court will do to take note of the same and dispense with the personal attendance by stipulating conditions in terms of Section (2) of the Code.

Aug 29,  · The Supreme Court ("Court") has, in its recent decision in Dashrath Rupsingh Rathod v.

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State of Maharashtra & Anr. 1, held that in cases of dishonour of cheque, only those courts within whose territorial limits the drawee bank is situated would have the jurisdiction to try the case.

Dihonour of Cheque Supreme Court of India Ruling Essay Sample

to have application of dishonour of post-dated cheques given as security. The Supreme Court has extensively dealt with this question in the case Sampelly Satyanarayana. Supreme Court has held time and again that a cause of action for filing a complaint under section accrues to the drawee of a cheque only after a notice is issued to the drawer within the prescribed period after receipt of information by him regarding the dishonour of cheque and the subsequent failure of the drawer to make the cheque payment.

(1) LAW HERALD (SC) IN THE SUPREME COURT OF INDIA Before The Hon’ble Mr. Justice S.B. Sinha The Hon’ble Mr. Justice Harjit Singh Bedi Criminal Appeal No.

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Dihonour of cheque supreme court of
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