Legal Reference Library

In RITVI VIRAT SHAH Versus STATE OF GUJARAT, the Hon'ble Gujarat High Court held that "under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the case on hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in-chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque. 23. We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no a...

The Calcutta High Court, in M.K. Products vs. Blue Ocean Exports (P) Ltd. & Ors., has said that a complainant cannot challenge the order of acquittal before the Sessions Court under the proviso to Section 372 of the Code of Criminal Procedure, in a case under Section 138 of the Negotiable Instruments Act. The judgement delivered by Justice Sankar Acharyya dealt with the question of whether an acquittal in a case of dishonour of cheque, instituted on a complaint, could be challenged at Sessions Court without the grant of special leave by the High Court. Relying on the Kerala High Court decision in Omana Jose vs. State of Kerala and Others (which in turn discusses the principles in case Subhash Chand vs. State (Delhi Administration), the court reached the decision to uphold the impugned order. The relevant observations from the Kerala High Court’s judgement in that matter which the Calcutta High Court relied upon were: After the introduction of the definition of ‘victim’ in Secti...

The Madras High Court bench has refused to interfere in a cheque bounce case, saying private complainants cannot prefer appeals against acquittal of the accused directly before it without approaching the sessions court concerned. Justice P Devadoss dismissed the appeal by one K Sudhakar against acquittal of the accused, by a judicial magistrate in Tiruchirapalli, saying the criminal appeal against the acquittal of the proprietor of a Chennai-based company was not maintainable. He said a Full Bench (comprising three judges) had laid down norms relating to the rights of victims and complainants on the issue of preferring appeals and also procedures to be adopted in cases where the complainant was also the victim. A victim of the crime, who had prosecuted an accused, had the right of appeal before the court before which such appeal would normally lie under the Criminal Procedure Act, he said. In a private complaint, even if the victim was not a complainant, he had a right to appea...

The Supreme Court of India has held in a recent judgment Mainuddin Abdul Sattar Shaikh vs. Vijay D Salvi (Criminal Appeal No. 1472 of 2009), that the accused in a proceeding under Section 138 of the Negotiable Instruments Act can be made liable there under even if the Company had not been named in the notice or the complaint, as on facts it held that there was no necessity for the complainant to prove that the said accused was in charge of the affairs of the company, by virtue of the position he held. The Court drew and applied the analogy from the proposition of law laid down in P.J. Agro Tech Limited and Ors.  Vs. Water Base Limited [(2010) 12 SCC 146] that ‘where the cheque is drawn by the employee of the appellant company on his personal account, even if it be for discharging dues of the appellant-company and its Directors, the appellant-company and its Directors cannot be made liable under Section 138’ The aforesaid ruling of the Apex Court came in the following fact situation...

A 3 Judge Bench of the Supreme Court in Econ Antri Ltd. Vs. Rom Industries Ltd. & Anr. has recently answered a reference whether for calculating the period of one month which is prescribed under Section 142(b) of the Negotiable Instruments Act, the period has to be reckoned by excluding the date on which the cause of action arose?. While answering the reference, the Supreme Court held as under: On 13/10/2006, while granting leave in Special Leave Petition (Criminal) No.211 of 2005, this Court passed the following order: “In our view, the judgment relied upon by the counsel for the appellant in the case of Saketh India Ltd. & Ors. v. India Securities Ltd. (1999) 3 SCC 1 requires reconsideration. Orders of the Hon’ble the Chief Justice may be obtained for placing this matter before a larger Bench.” Pursuant to the above order, this appeal is placed before us. 2. Since the referral order states that the judgment of this Court in Saketh India Ltd. & Ors. v. India Securiti...

The Supreme Court in  MSR Leathers Vs. S. Palaniappan  has  held that prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. The present case overrules  Sadanandan Bhadran v. Madhavan Sunil Kumar (1998) 6 SCC 514  which laid down that cause of action under Section 138 arose only once and  if the concept of successive causes of action were to be accepted the same would make the limitation under Section 142(b) otiose. In  Sadanandan Bhadran v. Madhavan Sunil Kumar  (1998) 6 SCC 514, this Court was dealing with a case under Section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as ‘the Act’) in which the complainant had, after dishonour of a cheque issued in his favour, taken steps to serve upon the accused-drawer of the cheque a notice under clause (b) of proviso to...