INTRODUCTION

With the kind blessings of the Almighty above and great motivation of Hon'ble Mr. Justice Prakash Krishna, Sri Chandra Bhal Srivastava, District Judge, Allahabad and all Judicial Officers of the Allahabad Judgeship, a small effort in the field of the Negotiable Instruments Act has been made to collect and compile important cases of Hon'ble Supreme Court and various High Courts on the subject. Sections 138 to 142, Chapter XVII, was inserted in the Negotiable Instruments Act, 1881 by an Amending Act, Act 66 of 1988. These sections came into force w.e.f. 29.3.1989. These sections provide for speedy disposal of cases relating to dishonoured cheques. By the incorporation of these provisions in the Negotiable Instruments Act, dealing by way of cheques in India has gained confidence amongst the businessmen community. These provisions deals with procedure, trial, cognizance, defence and punishment relating to offences of dishonour of cheques. Dishonour of a cheque is by it self not an offence u/s 138 of Negotiable Instruments Act. To come within the ambit of offence in such a case following elements have to be fulfilled : 1. Drawing the cheque. 2. Presentation of the cheque to the Bank. 3. Returning the cheque unpaid by the drawee Bank. 4. Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount. 5. Failure of the drawer to make payment within 15 days of the receipt of notice. The offence of dishonour of cheque has been made cognizable only on a written complaint by the payee or holder in due course. Sections 138 to 147 of Negotiable Instruments Act as inserted by the Amendment Act 2002, further lay down a kind of complete Code for trial of offences under the Negotiable Instruments Act.

Thus, if the provision of Negotiable Instruments Act specially sections 138 to 147 are followed strictly by the Courts, a large number of such cases will reach their final fate within a fair and reasonable time. These provisions have been incorporated with a view to encourage the culture of use of cheques and enhancing credibility of the Instrument. We have made every sincere attempt in compiling the case law relating to Negotiable Instruments Act and principles laid therein. We are also extremely grateful for the guidance given to us by our respected District Judge. We crave the indulgence of readers for any mistake that might have inadvertently crept in spite of our best effort to avoid them.

Date : 6.5.2010.

SMT. CHHAYA NAIN, A.C.J.M.,ALLAHABAD. VIKASH KUMAR, J.M., ALLAHABAD.

Last moments addition: DISHONOUR OF CHEQUES, NOW, PAY MORE FOR DELAY A Bench comprising Chief Justice K.G. Bal Krishnan and Justice P. Sathasivam and J. M. Panchal during the hearing the section 138 case between Damodar S. Prabhu and Saiyad Baba Lal on Monday dated 5, May 2010 took this radical step through a pioneering judgment which aims to curb the tendency amongst defaulters to sit over the amount tendered through a bounced cheque, laid down guidelines for early settlement in cheques dishonour of cheques u/s N.I.Act. The penalty for delay settlement of the cheques amount, after conviction in the trial Court would rise steadily from 10% in District Court, 15% in High Courts to a whopping 20% in the Supreme Court. The Bench observed that there had been an enormous rush of cases after cheque bounce was made a penal offence in 1989, followed by the amendment in 2002 providing for summary trial for early resolution of the dispute. In most cases, the Courts spent a lot of time issuing notices and summoning the accused, and when the time comes to deliver the verdict, the parties reach a compromise and seek compounding of offences, the Bench said. By Courtesy

The Times of India '

Wednesday, May, 5, 2010.

Topic Index
Chapters 1. Condonation of delay :(Sec. 138, 142 N.I. Act)
When can be condoned When cannot be condoned 2.Notice (demand notice): (Sec. 138 N.I. Act) When served When not served 3. Evidence on Affidavit: (Sec. 145 N.I.Act) Affidavit for u/s 200 Cr.P.C. Affidavit for examination in chief 4. Compounding of offence When compounded (Sec.147 N.I.Act)When Can not be compounded 5. Punishment (Sec. 138, 143 N.I. Act) Appeal against acquittal Suitable sentence Mode of recovery of fine from accused Release of accused on probation 6. Procedure: Sec. 143 N.I.Act. Summarily Trial 20 21 - 24 25 26 28 - 33 13 14, 15 16 - 19 16, 17, 18 19 20 - 27 8, 9,10 11, 12 13 -15 4,5 6,7 8 - 12

Page Nos. 4-7

Death of accused as revisionist in appeal - 27

(Sec. 262 to 265. Cr.P.C) Substituted service-exparte Without service of summons warrant of arrest and process u/s 82-83 Cr.P.C. should not be issued Mode of service of summons Issuing notice straight way by way of paper publication 7. Retrospective effect/ Prospective effect 8. Jurisdiction 9. Cognizance ( Sec. 142 N.I. Act) Summoning of accused on photocopies.Repeated presentation of cheque Combining cause of action. 10. Complaint (U/s 141 N.I. Act) Against Company Through Company 11. Complaint through Authorisation 12. Cheque towards Security, any debt or other liability (Sec. 139 N.I.Act) 13. Miscellaneous Nonappearance of Complainant Bar on second trial Discharge application Endorsement refused -

28 - 30 31

31 32 33 34,35 36,37 38 - 42 38,39 40 41 42 43 - 50 43 - 48 49 - 50 51 - 53

54 - 57 58 - 77 58 - 60 61 62 63

Account closed/Stop payment Signature of Complainant for Expert Opinion Cutting on Cheque Endorsement on Cheque without knowledge of complainant Disputed Signature Loss of Cheque Death of person issuing cheque Complaint filed by Private Part, for false complaint so cause notice to complainant is illegal Complainant already taken recourse ArbitrationSec. 155 Cr.P.C. not maintainable Alteration of dates on Cheque Difference in amounts mentioned in words and figures on Cheque Who can file Complaints Bouncing of Cheque is an individual liability -

64 65 66 67 68 69 70

71 72 73 74 75 76 77

Chapter -1.

Condonation of Delay Limitation:

When can be Condoned: 1. Date of receipt of information from Bank is excluded to count the period of thirty days. 2008 Cri.L.J. 1246 Case referred : (2006) 9 SCC 340 ` (2005) 4 SCC 417 2. 13 Days delay in filing complaint supported by affidavit, Huge amount involved , expressed difficulties 2008Cri.L.J. 1545 Case referred :1998 Cri.L.J.906(A.P) 3. Period of one month for filing complaint from date immediately following the date on which period of 15 days from date of receipt of notice by drawee expired. 2005 Cri.L.J. 1095 Case referred: AIR 1999 SC 1090 Saket India Ltd. vs. India Securities Ltd. AIR 1999 SC 1609 Sil Import U.S.A. Vs. Exim Aides Silk Exporters 4. The day when cause of action arises would excluded and last day included, on being holiday then the next coming day will be counted. 2004 Cri.L.J. 2636 Case referred: 1999 Cri.L.J. 1822 SC Saket India Ltd. vs.India Securities Ltd. 1999 Cri.L.J. 2276 SC Sil Import U.S.A. Vs. Exim Aides Silk Exporters 5. Burden lies on the complainant to satisfy by sufficient cause to condone the extensive period for filing a complaint.

2008Cri.L.J (NOC) 947 GAU. 6. Application for recalling order is pending before the Sessions Court. Amended provision to condone delay in filing complaint would be applicable when case was still pending. 2006 Cri.L.J. 193 Case referred : AIR 1999 SC 1090 AIR 1981 SC 1106 7. Date mentioned by bank about dishonour of cheque is to be excluded for counting period of limitation. 2009 Cri.L.J. 1434 Case referred 1999 Cri.L.J. 1822. AIR 1972 SC 1293 8. Payee has right to sent cheque to bank in number of times he pleases during period of its validity. Limitation period start to run from date of last dishonour. 2009 Cri.L.J. 154 Case referred: 1995 Cri.L.J. 1384 (Kerala) (F.B.) AIR 1998 SC 3043 SC 2000 Cri.L.J. 2921 All.

When can not be condoned 1. 3 Days delay in filing complaint can't be considered without notice to accused 2007 Cri.L.J. 482 2. Acquittal of accused on basis of law then in force proper-can't be set aside when complainant has not stated a satisfactory reason for condoning delay. 2005 Cri.L.J. 1644 Case Referred : AIR 2003 SC 2434 Shiv Shakti Cooperative Housing Society vs. Swaraj Developers 3. Condonation of delay is not permitted u/s 473 Cr.P.C. without giving notice to the person who is prosecuted. 2008 Cri.L.J. (NOC) 947 (GAU) 4. Complaint filed after expiry of period about one year. Magistrate taking cognizance for condoning delay in view of amended section 142 (b)- not proper, 142 (b) does not have retrospective effect. 2007 Cri.L.J. 502 Case referred: (2005) 4 SCC 417 1999 Cri.L.J. 2276 1998 Cri.L.J. 4066 AIR 2002 SC 1715 5. One Day delay in filing complaint can't be condoned by applying 142 amended section retrospectively 2006 Cri.L.J. 3411. 6. After service of notice complaint was not filed. One month period of delay is not condoned because no application of delay condonation is filed. 2004 Cri.L.J. 1687 7. Amended Section 138 (b) making period of 15 days into 30 days, said amendment being prospective in nature and demand made after expiry of 15 days period - Dismissal of complaint proper. 2009 Cri.L.J. 3809

Case referred : AIR 2008 SC 8099 8. One month period of limitation straight from date of service of notice - Not proper. Complaint was barred by limitation. 2007 Cri.L.J. 3854 9. Complaint not filed on basis of notice within 30 days, after 15 days of service of notice - Complaint time barred. 2008 Cri.L.J. 2172. Case referred AIR 2005 SC 4284 AIR 2001 SC 3372 SC AIR 2000 SC 2946

Chapter - 2.

Demand Notice -Sec. 138 N.I. Act

Notice when served : 1. Notice to be read as a whole. In notice no cheque amount demand is made it would fall of its legal requirement. 2008 Cri.L.J. 452 SC Case referred : AIR 2003 SC 4689 AIR 2000 SC 828 2. Endorsement by postman that refusal by the applicant - presumed that notice was sufficiently served. 2005 Cri.L.J. 3035 Case referred: 2005 Cri.L.J. 127 AIR 2005 SC 109 3. Only bounced cheque amount was made in demand notice, no other amount or liability was included is legally valid notice. 2008 Cri.L.J.(NOC) 950 HP 4. Cheque amount of Rs. 50,000/- notice given for one lac complaint has correctly mentioned in his complaint the amount of this cheque and further shown in his affidavit in his examination in chief. Said discrepancy as to amount of the cheque in notice does not disentitle the complaint. 2009 Cri.L.J. 1228 Case referred AIR 2008 SC 1325 (2008) 1 SCC 258 5. E-mail sent by complainant to accused informing him about dishonour of cheque. Demand notice - no format is prescribed- would qualify to be notice contemplated u/s 138 N.I. Act. 2009 Cri.L.J. 3804 6. Specifying period of 8 Days shorter than 15 days for making payment cannot be held to be illegal while provision of Sec. 138, nowhere provides that notice should prescribed period of 15 days for making payment. 2010 Cri.L.J. 1019

Case referred 2008 Cri.L.J. 452 1999 Cri.L.J. 2010 Madras 7. If any period or no period is mentioned in notice as prescribed in section 138 proviso (C) notice shall not be invalid on that account. 2009 Cri.L.J. 154. Case referred : 1999 Cri.L.J. 2010 Madras 1998 Cri.L.J. 3273 (P & H) 8. Demand notice sent to accused through advocate, counsel failed to put his signature on certifying same as a true copy it cannot be said to be inadmissible in evidence. 2005 Cri.L.J. (NOC) 148 Kerala Case referred : AIR 1990 SC 396 9. Payee not filing complaint after service of first notice of demand on drawer cannot issue second notice of demand to drawer and file complaint thereafter. 2010 Cri.L.J. 1237 Caser referred : AIR 2009 SC 1538 (2005) 4 SCC 417 AIR 1998 SC 3043 1998 Cri.L.J. 4066 10. Fax stating about dishonour of cheque demanding payment of money within 15 days and it contained photocopy of bounced cheque and refusal endorsement of Bank- no reference of Fax message in the complaint question as regard as genuineness of Fax message, whether Fax message was sent by drawee, when it was sent and when it received in such circumstances are disputed question of fact can be decided at trail on basis of evidence - proceeding cannot be quashed. 2005 Cri.L.J. 4492 Case referred (2005) 4 SCC 417 2004 Cri.L.J. 4609

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2004 Cri.L.J. 4874. 11. Service of notice - is sine qua non for launching prosecution -Cheque was issued on behalf of company- Noticie jointly addressed and sent to Mananging Directer of the company, to the company and to the firm in one envelop- was returned by postman as refused - Would be deemed to be duly served- Refusal to accept is always considered as good service - Presumption of service of notice cannot be rebutted by accused Managing Directed by mere denial in his statement u/s 313 Cr.P.C. 2008Cri.L.J 3770

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Notice when not served : 1. Acknowledgement of notice when not received by complainant and actual date of service of notice could not mentioned in complaint. Complaint is not maintainable 2009 Cri.L.J. 154 2. Filing complaint on basis of subsequent dishonour and consequent notice without even referring to earlier dishonour and consequent notice not permissible. 2009 Cri.L.J. 3207 Case referred: 2009 AIR SCW 1044 AIR 1998 SC 3043 3. Service of notice could not be found to be not valid merely because of endorsement of postal peon- moreso, when postal peon was not at all examined. Quashing on ground that notice was not served on them liable to be set aside. 2009 Cri.L.J. 326 Case referred AIR 2005 SC 109 AIR 1999 SC 3762 4. Notice to drawer of cheque mandatory. Sec. 27 General Clauses Act refers presumption that service of notice has been effected when it is sent to the correct address by registered post. U/s 138 Proviso (b) was evaded by accused or that accused played role in return or notice unserved - not necessary in view of presumption of General Clauses Act 2007 Cri.L.J. 3214 Case referred AIR 2006 SC 2179 AIR 2005 SC 109 AIR 1999 SC 3762 (1996) 7 SCC 523 AIR 1992 SC 1604 5. Once notice under registered post and one notice under UPC were sent by complainant to accused- notice under registered post had been returned by postman by endorsing false report while notice by UPC was received by him. Notice sent by registered post thereby not served upon

12

accused, accused denied service of notice by filing affidavit. Same not controverted by filing counter affidavit. It would be deemed that there was no sufficient service. 2006 Cri.L.J. 3312 Case referred : 2005 Cri.L.J. 3029 (Foll.) (2004) 1 Crimes 567 (AP) 1995 Cri.L.J. 560 (AP) 6. Post dated cheque - return of cheque by Bank as unpaid - Payee failed to give notice in writing to company and its officer requiring them to make payment within 15 days from date of receipt of notice. In absence of such notice, mere fact that post dated cheque issued by company were dishonoured by bank would not constitute offence u/s 138 N.I. Act. 2010 Cri.L.J. 723 Case referred AIR 2009 SC 428 AIR 2009 SC 2717 AIR 2009 SC 2780 7. Cheque issued by accused petitioner was allegedly bounced - Notice issued by complainant to petitioner was returned with endorsement that he was absent for 6 to 7 days - Case of complainant was not that petition was intentionally avoiding to receive notice or address given was fictitious - Thus , no notice was served upon petitioner -Mandatory requirement of Sec. 138 N.I. Act was not fulfilled.- Conviction of accused improper. 2010Cri.L.J 983 Case referred 2006 Cri.L.J 2897

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Chapter - 3. Evidence on affidavit Sec. 145 N.I. Act

Affidavit for u/s 200 Cr.P.C. in complaint of N.I. Act. 1. Recording of evidence at issuance of process, Magistrate can dispense with recording of sworn statement of complainant and his witness by accepting their affidavits . 2004 Cri.L.J. 4566 Case referred AIR 2001 SC 3955 Note :

See text attached in the last.

2. In a case of dishonour of cheque if Magistrate take cognizance and proceed u/s 200 Cr.P.C. it is an enquiry under provision of Cr.P.C. Complainant is entitled to file affidavit in support of his evidence. 2005 Cri.L.J. 3827 3. Magistrate is duty bound to examine upon oath the complainant and his witness before issuance of process - even though solemn affirmation by complainant was present at foot of complaint provision of 200 Cr.P.C. would apply. 2007 Cri.L.J. 2207 Case referred 2006 SC 1796. 2007 Cri.L.J. 535 AIR 2004 SC 4674 AIR 2001 SC 567

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Affidavit for examination in chief Sec. 145.N.I.Act Affidavit for examination in chief : 1. Accused has an absolute right to have the complainant and any of his witnesses summoned for cross examination, but cann't ask for examination in chief again. JT 2010 (1) SC 259 Note :

See text attached in the last.

2.Complainant already submitted his affidavit his examination in chief it is not necessary to again record his examination in chief. 2006 Cri.L.J. 208 Case referred 2005 Cri.L. J 1201 Bombay (FB) AIR 2004 SC 2890 AIR 2003 SC 4195 AIR 2001 SC 676 AIR 1968 SC 647 3. Application by accused for summoning complainant for examination in chief, complainant cann't be examined in chief in respect of matters stated by him in affidavit. Court should have allowed application for enabling accused to cross examine complainant and re-examination of complainant. 2007 Cri.L.J. 892 Case referred 2006 Cri.L.J. 208 Bombay 2005 Cri.L.J. 1201 Bombay 2001 Cri.L.J. 4656 4. Provision of section 145 N.I.Act providing for recording of evidence of complainant on affidavit is purely procedural in nature. It is retrospective in operation. It will apply to complaints pending on 6.2.2003 i.e. on date of coming into force of amended provisions of sec. 145 N.I. Act. 2006 Cri.L.J. 574 Case referred

15

AIR 2000 SC 3335 AIR 1998 SC 1827 AIR 1994 SC 2623 AIR 1990 SC 209 AIR 1958 SC 915

Note : Accused has an absolute right to have the complainant and any of his witness summoned for cross examination, but cannot ask for examination- in -chief again. M/s Mandvi Cooperative Bank Ltd. Vs. Nimesh B. Thakore, JT 2010 (1) SC 259.

Note : See text attached in the last.

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Chapter - 4. Punishment-When Can Be Compounded 1. Technically provisions of sec. 320 Cr.P.C. do not apply to offences not covered by IPC. Sec. 147 N.I. Act Compounding Offence should not normally be denied. In this case High Court confirm the conviction but S.C. set aside the conviction on basis of settlement between parties. 2008 Cri.L.J. 805 Case referred 2005Cri.L.J 4878 (2005) 10 SCC 632 (2004) 13 SCC 494 2000Cri.L.J 4673 (2003) 9 SCC 214 (2000) 1 SCC 762 2. Revision against conviction - Compromise arrived at between parties - Matter can be compounded at an stage in and after dismissal of revision application. 2004Cri.L.J 3786 Case referred 1998 Cri.L.J. 4424 2003 Cri.L.J. 2028 2002 Cri.L.J. 90 1999 Cri.L.J. 1825 1964 (1) CRi.L.J. 152 3. Sec. 138, 147 N.I. Act is compoundable even at revision stage. In view of amendment inserting sec. 147 which came into force on 6.2.2008. Parties can compound offence without any further qualification or embargo- Date of offence or first conviction is not relevant. 2005 Cri.L.J. 431 Case referred (2000) 1 SCC 762 4. Conviction u/s 138 N.I.Act set aside in view of the fact that dispute is settled and amount due to complainant has been paid. 2004 Cri.L.J. 3853 SC

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Case referred 2000 (1) SCC 762 5. Sec. 138, 147 N.I. Act is compoundable notwithstanding with fact that sec. 320 Cr.P.C. does not in terms apply to sec. 138. - Compounding offence u/s 320 (1) - mater need be pending before Court - parties can enter into composition even after verdict of guilty, conviction and sentence have become final and no proceeding are pending before any Court. 2007Cri.L.J 1865 Case referred 2006 Cri.L.J. 1922 (Kerala FB) 2004 Cri.L.J 3786 2003 Cri.L.J. 2028 1990 Cri.L.J. 1599 6. Parties entered into amicable settlement - Accused paid amount he had taken as loan from complainant - Complainant waived compensation amount imposed on accused by trial court by accepting amount ant granting receipt. In view of compromise -accused is entitled to be acquitted. Granting him exemption surrendering . 2009 Cri.LJ. 1906 Case referred 2008 (1) EAST CRI C - 201 (JHAR) 7. Act of 1881 being special statute, provisions of sec. 147 of the Act will have over riding effect over provisions of Court relating to compounding of offences. - Parties settled their dispute and made application u//s 147 of the Act - offence can be allowed to be compounded even at appellate stage - conviction is liable to be set aside in view of compounding offences. 2010 Cri.L.J. 525 Case referred AIR 2008 (SC) 1005 AIR 2008 SC. 716 2006 Cri.L.J. 948 SC. Ref. 2005 Cri.L.J. 4878 Ref. 8. Employees State Insurance Act Sec. 39 - Enforceable DebtLiability to pay ESI contribution by employeer - a statutory obligation -

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and an enforceable Debt within meaning of sec. 138 N.I.Act- Cheque paid towards contribution return for reason 'exceeds agreement' - notice u/s 138 issued to accused- subsequent thereto within short span of time accused paid amount by way of demand draft and matter in relation to cheque was settled between parties- plea raised whether offence stands compounded - holding view of peculiar fact and circumstances recording of acquittal is not proper - Settlement between parties can only be recorded. 2005 Cri.L.J. 1080 Case referred 2002 Cri.L.J. 4792 2000 Cri.L.J. 4671 2000Cri.L.J 4673

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Punishment When Cannot Be Compounded 1. Complainant not willing to compromise- prayed for compounding of offence on ground that amount due was deposited in Court - cannot be allowed2009 Cri.L.J. 493 Case referred 2001 Cri.L.J. 708 2. Employees State Insurance Act Sec. 39 - Enforceable Debt- Liability to pay ESI contribution by employeer - a statutory obligation - and an enforceable Debt within meaning of sec. 138 N.I.Act- Cheque paid towards contribution return for reason 'exceeds agreement' - notice u/s 138 issued to accused- subsequent thereto within short span of time accused paid amount by way of demand draft and matter in relation to cheque was settled between parties- plea raised whether offence stands compounded - holding view of peculiar fact and circumstances recording of acquittal is not proper - Settlement between parties can only be recorded. 2005 Cri.L.J. 1080 Case referred 2002 Cri.L.J. 4792 2000 Cri.L.J. 4671 2000Cri.L.J 4673 3. Complainant not inclined to enter into any compromise with accused -compounding essentially involves compromise or agreement there can not be one way traffic - offence cannot be compounded if complainant is not willing. 2008Cri.L.J 3770 Case referred 2007 CLC 827 AIR 2007 (NOC) 975 Bombay AIR 2002 SC 3014

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Chapter -5. Punishment -Appeal against Acquittal 1. Appellate Court has full power to re-appreciate evidence - but without coming to definite conclusion that findings given by trial Court are perverse - It cannot substitute the findings of trial Court by taking a totally different perspective- complaint of dishonour of cheque -Dismissed by trial Court for want of proof of advancement of money by complainant - High Court without holding that finding of trial Court is perverse and on totally different perspective converting acquittal into conviction.-Order unsustainable 2003 Cri.L.J. 411 SC Case referred AIR 1976 SC 832 AIR 1974 SC 286 2. Complainant case that he has sent notice under registered post to accused - respondent, which was returned with endorsement refusedthere is endorsement refused but there is no signature of any of witness before whom accused person refused to take notice or any signature made by accused on said letter .- Complainant has not examined postal peon who went to deliver said letter.- Complainant has further said in his evidence that house for which cheque was given to him, did not belong to him- Complainant has failed to prove his case and also failed to comply provision of sec. 138 (c) - Order of acquittal is therefore proper. 2009 Cri.L.J. 3768 3. Appeal against acquittal - Appellate Court has full power to review the evidence upon which order of acquittal was founded- if two conclusion are possible ,Court would decline to interfere - however , if view taken by trial court is unreasonable or judgment manifestly erroneous- Court would set aside acquittal. 2008Cri.L.J 3770 AIR 2007 (NOC)975 Bombay AIR 2002 SC 3014 4. Acquittal of accused by High Court- High Court, however, found to have not examined probative value of relevant documents produced by complainant- an acceptability of evidence of complainant was also not examined- Order of acquittal set aside- Matter remitted for considering afresh. 2009 Cri.L.J. 2788 SC

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Punishment -Suitable Sentence 1. Total amount covered by cheque is involved amount of Rs. 30,000/- -Said amount had not been paid either during trial or subsequently imposition of fine RS. 1200/- was to meagre - matter remanded to Magistrate to pass suitable sentence 2006 Cri.L.J. 3806 Case referred AIR 2002 SC 681 AIR 1999 SC 3762- Magistrate can award any sum as compensation would be the reasonable amount. 357(3) Cr.P.C. (1998) 4 SCC 551 2. Court may enforce an order to pay compensation by imposing a sentence in default2002Cri.L.J 1003 SC It is open to all Courts in India to follow the said course. AIR 1988 SC 2127 Case referred AIR 2001 SC 567 3. Power to impose sentence of fine - SC is of the opinion - Sub-section (2) of Sec. 357 Cr.P.C. would be attracted even when appellant was directed to pay compensation. - The appellate however while suspending the sentence was entitled to put the appellant on terms. However no such term could be put as a condition precedent for entertaining the appeal which is a constitutional and statutory right. -The amount of compensation must be a reasonable sum. - Court while fixing such amount must have regard to all relevant factors including the one referred in sub-sec. (5) of 357 of Cr.P.C. - No unreasonable amount of compensation can be directed to paid. 2007 Cri.L.J. 2418 4. Suspension of sentence pending appeal - Appellate Court can direct to pay compensation as condition precedent for suspending sentence. 2006 Cri.L.J. 3653 Case referred

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2002 Cri.L.J. 395 (AP) AIR 2001 SC 659 5. Sentence of fine in cheque dishonour case -fine exceeding Rs. 5000/- can be imposed by Judicial Magistarte First class W.E.F. 6.2.2003.- Limitation stipulated in section 29 (2) of Cr.P.C. stands obviated by amended provision of sec. 143 N.I. Act. - Compensation - Sentence of fine also imposed along with sentence of imprisonment - certain sum of fine , if released, can be directed by the trial Court to be paid as compensation to complainant- Appellate Court while suspending sentence can order accused to deposit 25% of amount involved in cheque as fine or compensation - however , no payment shall be made to complainant before decision of appeal. 2006 Cri.L.J. 1554 Case referred AIR 2001 SC 567 6. Sentence- Court after considering evidence on record found accused guilty of offence - However imposed sentence of fine of Rs. 5000/- only - not proper - order modified and accused was sentenced to pay fine of cheque amount in addition to Rs. 5000/-. 2004 Cri.L.J. 4792 Case referred 2004Cri.L.J 3853 2001 Cri.L.J. 950. 7. Suspension of sentence - pending appeal - offence of dishonour of cheque - imposition of condition by appellate Court to deposit 50% of cheque amount for suspending order directing payment of compensation- proper Sec. 357 Cr.P.C. Order to pay compensation offence of dishonour of cheque - punishment in default of payment in compensation can be imposed. 2006 Cri.L.J. 606 Case referred AIR 2002 SC 681 AIR 2001 SC 659 AIR 2001 SC 676 8. Compensation instead of substantive sentence of fine - when can be awarded -Alleged withdraw of money from joint account by respondent- partner after dispute arising with appellant partner - cheque

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issued by respondent pursuant to compromise was dishonouredrespondent admitted his liability to extent of Rs. 7 lakhs - Cheque had been issued in discharge of debt- plea by accused that he signed cheque under threat not tenable - culpability of accused was established however there was no charge of fraudulent action against him-he also had probable defense as account were yet to be settled- in circumstance, grant of compensation of Rs. 7 lakhs instead of fine of Rs. 5000/- would be proper. 2010 Cri.L.J. 2951 Case referred AIR 2006 SC 1117 AIR 2002 SC 2710 AIR 2002 SC 2811 9. Sentence - Cheque issued by Managing Director of company to its employee under industrial settlement, was dishonoured - employee was fighting for his right since long and was compelled to initiate criminal proceedings - matter cannot be treated lightly - as payment due under cheque was made subsequently, accused directed to pay compensation of Rs. 20,000/- to complainant. 2008Cri.L.J. 3770 Case referred AIR 2007 (NOC) 975 Bombay AIR2002SC 3014 10. Sentence - No compelling circumstance available which would justify imposition of any deterrent substantive sentence of imprisonment-Leniency can shown on question of sentence - however Courts cannot ignore plight of complainant who had been compelled to fight three rounds of legal battle and to wait from 2004 for redressal of his genuine grievances. - Compensation unless amount is claimable in civil suit - direction under sec. 357 (1) or 357 (3) of Cr.P.C. for payment of compensation cannot be issued. - Entitlement - payee or holder suffers loss by reason of dishonour of cheque for which accused has been sentenced- complainant entitled for compensation. -Award for compensation direction can be given for payment of interest thereon- liable to pay interest u/s 80 also covers a cheque. -Direction for payment of interest - fixation of rate of interest - Court

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can ascertain loss which complainant would suffer on account of delay in payment and direct appropriate rate of interest. 2007 Cri.L.J. 2590 Case referred (2004 ) 8 SCC 251 AIR 2003 Ker. 213 (2002) 3 Ker. L.T. 852 11. Accused had taken loan of Rs. 85,000/-from complainant - accused himself in reply notice admitted that he issued blank cheque by way of security for prompt repayment of sum of Rs. 85,000/- - accused pleaded discharge of loan of Rs. 85,000/- no evidence in form of receipt or endorsement was produce by him- conviction of accused is proper. Sentence of two months simple imprisonment would meet end of justice. 2010Cri.L.J. 814 Case referred AIR 2009 SC 1518 AIR 2008 SC 1325 12. Sentence - allegation that cheque issued by accused for repayment of loan was dishonoured - accused, petty business facing criminal prosecution for 7 years - had paid hefty amount of compensation as penalty - as directed by trial Court.- Had earlier not committed any such or similar offence- substantive sentence of imprisonment set asideSentence of fine of 1000/- and imposition of compensation in sum of Rs. 35, 000/- maintained. 2010Cri.L.J 838 13. Award of compensation cannot be ordered without being preceded by imposing of sentence . 2007 Cri.L.J. 2502 Case referred AIR 2004 SC 1280

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Punishment -Mode of recovery of fine from accused 1. Sec. 138 N.I.Act Sec. 421, 357 Cr.P.C.-Sentence - Mode of recovery of fine from accused - Default sentence awarded - accused failing to pay portion of fine is liable to undergo default sentence- Amount liable to be paid to complainant as compensation cannot be withheld- recovery of compensation payable to complainant gets precedent over recovery of fine to be credited to government. 2006Cri.L.J. 1853 Case referred AIR 2002 SC 681 AIR 1988 SC 2127.

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Punishment- Release of accused on probation 1. Probation of offenders Act Section 4 (1) Sec. 6 (2) release of accused on probation - consideration of report of report of Probation Officer as envisaged u/s 62 - is condition precedent- record showing that no such report was called by Magistrate - to consider whether Magistrate was correct legally and factually in releasing accused - suo motu power of revision under CR.P.C. could be invoked by High Court notwithstanding revision at instance of complainant was not maintainable. -Fact that offender is first or youthful offender may not by itself be sufficient to invoke Sec. 4 (1) - Person convicted of offence u/s 138 N.I. Act - it is not expedient to release him on probation under sec. 4 (1) of Probation of Offender Act. 2009 Cri.L.J. 1703 Case referred 2005 Cri.L.J. 3077 2005Cri.L.J 4135 2000Cri.L.J 2283 AIR 1974 SC 2233

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Punishment - Death of accused as revisionist in appeal 1. Sec. 397. 401. 394 Cr.P.C. conviction -appeal against - offence of dishonour of cheque - Appellate Court reduce sentence and amount of fine - revision against by accused - During pendency of revision revision, accused died - revision petition would survive death of accused- court can pass appropriate order with regard of sentence of fine. 2006 Cri.L.J. 3864 Case referred 1962 (2) Cri.L.J. 506.

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Chapter-6. Procedure Sec. 262 -265 Cr.P.C. & 143 N.I. Act Summarily Trial : 1. Pendency of large number of dishonour of cheques, complaints steps direction given by which delay in disposal of complaints can be curtail. - Filing of complaints u/s 138 with M.M./A.M.M. -M.M. verifies the complaints and marked the same to the concerned M.M. / A.M.M. for further proceedings. - Stage of issuance or declining to issue the process. - Recording of the statement of complainant and other witnesses and their cross examination. Fixing the date of argument of complainant and accused. -Orders for summoning. -Appearance of accused (bail) -Hearing for recalling of summoning order. - Asking the accused regarding his guilt or notice u/s 251 Cr.P.C. - On his pleading not guilt, examine the and witnesses an d to permit their cross examination and recording statement of accused u/s 281 of Cr.P.C. and to ask him to lead his defence evidence. -Court must adopt all pragmatic methods of service on the accused repeated summons be sent by employing all methods encluding e-mail to ensure service of summons i.e. summon servicie through speed post courier. -Not given long dates -Process service agency attached to D.J. and the High Court to ensure effective control. -145 N.I. Act evidence on affidavit the evidence (examination in chief) of the complainant can be given on affidavit and thereafter if the accused so desire he / she request the Court to call the complainant for cross examination. 2005 Cri.L.J. 1201 Case referred AIR 2004 SC 355 AIR 1996 SC 2339 1995 Cri.L.J. 1384 Kerala (FB) 2. Dishonour of cheque provision of summarily trial sec. 262 to 265 of

29

the Code are applicable. Provisions of sec. 259 regarding warrant trial have no application. 2006 Cri.L.J.1988 Case referred 2004 Cri.L.J. 664 2002 Cri.L.J. 4392 3. Dishonour of cheque procedure case was tried as regular summon case though it was triable summarily u/s 143 N.I. Act. Magistrate trying case and recording case ceased to exercise jurisdiction - his successor Magistrate not required to hold De nova trial as contemplated u/s 326 (3) Cr.P.C. Case tried in summary way by following procedure u/s 263 264 Cr.P.C. are alone intended to be excluded from purview of sec. 326 (1) Cr.P.C. He can act on basis of evidence recorded by his predecessor and proceed further from stage of his taking over the matter 2007 Cri.L.J. 122 Case referred 2005 Cri.L.J. 1201 Bombay 1998 Cri.L.J. 2439 Raj. 1996 Cri.L.J. 1057 Raj. AIR 1992 SC 1219 4. Accused seeking trial of offence as warrant case even trial of case had not begun since maximum prescribed u/s 138 N.I. Act is two year imprisonment alleging offence u/.s 138 of t he Act cannot be tried as warred case in view of the sec. 143 (1) of the Act. 2009 Cri.L.J. 110 Case referred 2007 Cri.L.J. 122 2006 Cri.L.J. 1988 5. Acquittal of accused on ground of absence of complainant on date of posting of case and failure to take steps for proceedings against accused u/s 82 -83 Cr.P.C. not proper. Moreover Magistrate had not taken steps u/s 72- 79 Cr.P.C. before acquitting accused. Learned Magistrate ought have dismissed the case u/s 204 Cr.P.C. instead of acquitting the accused. 2005 Cri.L.J. 4756 Case referred (2005) 1 Kerala L.J. 57

30

(2005 ) 1 Kerala L.J. 1003 6. Application for production of no document filed by complainant. Complainant stated in cross examination that said document were in possession of accused subsequently taking plea that it was mistaken statement given by her.- No attempts were made to rectify the said mistaken statement. Application liable to be rejected. It is well settled the function of the criminal court is administrative of criminal justice and not to count the errors committed by the parties to find out and declare who amongst the parties performed better. Sec. 311 Cr.P.C. if it shall be seen from the fact of every case whether the party applying is trying to fill in lacuna it be so , then the application u/s 311 ought not be allowed. 2009 Cri.L.J. 443 7. Trial procedure - word may used in section 143 N.I. Act leaves option for Magistrate to choose whether case is to be tried summarily or as a summon case. Such option is not open for trial of cases under penal Code which are tried summarily. 2010 Cri.L.J. 730 Case referred 2007 Cri.L.J. 1`22 1996 Cri.L.J. 1057 Raj. AIR 1962 SC 690.

31

Procedure- Substituted service - exparte Sec. 144, 138 N.I. Act. 1. Substituted service of summons to accused in criminal trial -is permissible - fact whether accused is charged for offence u/s 138 N.I. Act or IPC.- Immaterial.Sec. 477 Cr.P.C. Presence of accused is a must. Presence of accused however could not be secured for considerable period despite sufficient service of summons to him- case against said accused can be split up in terms of rule -2 of Criminal Rule of Practice (Karnataka ) Sec. 144, 138 N.I. Act- Accused cannot be proceed exparte - no exparte decision regarding guilt of accused can be recording. 2005 Cri.L.J.3700 Case referred 2004 (4) KCCR 2216: ILR 2004 Kant. 4381 Procedure :- Without service of summons warrant arrest and process of 82-83 Cr.P.C. should not be issued 1. Order taking cognizance not interfered with however without service of summons warrant of arrest and process u/s 82-83 Cr.P.C. was issued same is liable to be set aside. Complainant sent the notice by registered post on correct address thus as per section 27 of General Clauses Act there is presumption that demand notice had been duly served upon the petitioner. 2009 Cri.L.J.4716

32

Mode of Service of Summons : (U/s 144 N.I. Act)

1. Notwithstanding anything contained in the Code of Criminal Procedure and for the purposes of this Chapter, "A Magistrate issuing a summon to an accused or a witness may direct a copy of summons to be served at the place where such accused or witness ordinary resides or carries on business or personally works; for gain by speedpost or by such courier services as are approved by a Court of Session." 2. Where an acknowledgement purporting to be signed by the accused or the witness or an endorsement purported to be made by any person authorized by the postal department or the courier services that the accused or witness refused to take delivery of summons has been received, the Court issuing the summons may declare that the summons has been duly served. Note : For the service of notice of summons on the accused person, summons should be send through speed post/ courier and its receipts should be attached in the file. By resorting to the amended provision in this regard, the greatest hurdle to service of notice of summons on the accused persons may be removed. Recently the Supreme Court had an occasion to examine the provisions of section 143, 144, 145 & 147 N.I.

M/s Mandvi Cooperative Bank Ltd. Vs. Nimesh B. Thakore, JT 2010 (1) SC 259.
Act along with their provisions in

Note : See text attached in the last.

33

Procedure :- Issuing notice straight way of paper publication . 1. Issuing notice straight way by way of paper publication cannot be said to be in compliance with statutory provisions of N.I. Act -Complaint liable to be quashed. 2006 Cri.L.J. (NOC) 369 (AP) 2. Summons could not be served on accused. Proceedings being quasi criminal in nature. Court should not avail mode of paper publication provided under C.P.C. - splitting of a case is not proper. In this case summons could not be served on company and some of its officials. Court could have directed the complainant to take all steps to effect service including provisions of CPC by way of substituted service i.e. paper publication. On non appearance of accused on such publication the accused could be proceeded exparte if it was found that accused persons or any of them were guilty of offence after trial, they would have been convicted by way of imposing fine and order to pay compensation and may also be sentenced for imprisonment, splitting of a case in respect of those accused persons was not proper. -Application for acquittal by some accused persons on ground that case was split up in respect of company and other accused and present accused - accused persons were signatories of the cheque. They cannot escape from liability unless they prove that offence was committed without knowledge and the had exercise all due diligence to prevent the commission of such offence. 2005 Cri.L.J. 1120 Case referred AIR 2000 SC 145 Anil Hadas case.

34

Chapter- 7. Retrospective effect/Prospective effect 1.Sec.142 N.I.. Act is substantive provision not retrospectively 2008 Cri.L.J. 3953 Case referred AIR 2008 SC 899 2. 142 (b) N.I. Act not intended to operate retrospectively 2008Cri.L.J 1386 SC Case referred AIR 2004 SC 4674 AIR 1984 SC 87 3. 142 (b) Provision has come into effect during the pendency of the petition (revision) could extend to the pendency of this petition . 2008 Cri.L.J. 4738 Case referred 2006 Cri.L.J. 193 4. Application for recalling is pending before Session Court- Amended provision to condone delay in filing complaint would be applicable when case was still pending 2006Cri.L.J 193 Case referred AIR 1999 SC 1090 AIR 1981 SC 1106 5. Complaint filed after expiry of one year period -Magistrate taking cognizance for condoning delay in view of amended section 142 (b) not proper. 142 (b) does not have retrospective effect. 1998 Cri.L.J. 4066 Case referred 2007 Cri.L.J. 502 (2005) 4 SCC 417 AIR 2002 SC 1715 1999 Cri.L.J. 2276 6. One delay in filing complaint cannot be condoned by applying 142 amended section retrospectively .

35

2006 Cri.L.J. 3411 7. Amendment 138 (b) making period of 15 days into 30 days, said amendment being prospective in nature and demand made after expiry of 15 days period.-Dismissal of complaint proper. 2009 Cri.L.J. 3809 Case referred AIR 2008 SC 869 8. Provision of section 145 N.I. Act providing for recording of evidence of complainant on affidavit - Is purely procedural in nature. It is retrospective in operation. It will apply to complaints pending since 2003 i.e. on dated of coming into force of amended provision of section 145 N.I. Act . 2006Cri.L.J 574 Case referred AIR 2000 SC 3335 AIR 1998 SC 1827 AIR 1994 SC 2623. AIR 1990 SC 209 AIR 1958 SC 915 9. Sec. 138, 142 N.I. Act - Sec. 142 as amended has retrospective effect applicable to pending cases- Taking cognizance in pending complaint u/ s 138 after period of limitation on ground of sufficient cause - No interference called for in exercise of inherent powers or extraordinary jurisdiction. 2007Cri.L.J 2182 Case referred 2006 AIR SCW 6130 AIR 2003 SC 2434

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Chapter - 8.

Jurisdiction

1. Most of the act such as drawing of cheque, presentation of cheque, return of cheque by drawn bank related to place 'J' but only cheque was drawn at Lucknow, complaint filed at place 'J' - not maintainable 2008Cri.L.J 2177 Case referred 2007Cri.L.J 115 2005Cri.L.J 575 2. Complaint filed before CJM at place 'K' on 26.6.1991. CJM directed to file complaint before Magistrate at place 'E'. Complaint filed before Magistrate at place 'E' on 2.4.1996 - initiation of proceeding on complaint filed 26.6.1991. 2007 Cri.L.J. 1042 Case referred 1985 Cri.L.J. 301 3. Petition to quash complaint of dishonour of cheque - cheque issued pursuant to contract for supply entered within jurisdiction of one High Court- Supply was to be made and payment was also to be made within jurisdiction of that High Court. Complaint of dishonour filed in Court under that High Court- Fact that accused had sent cheque from on his registered office is within jurisdiction of other High Court- do not form integral part of cause of action of offence of dishonour of cheque - that does not confirm jurisdiction on the other High Court to entertain petition. 2006Cri.L.J 1683 SC Case referred 2006 AIR SCW 863 (2005) 4 SCC 417 (2005) 9 SCC 161 AIR 2004 SC 2321 AIR 2005 SC 392 4. Complaint instituted Ahmadnagar Accused carried business Chandpur(Orissa) Transaction were with branch of complainant at Bhubneshwar Cheque issued by accused at Chandpur and was dishonoured with territorial jurisdiction of Court at Khurda (Orissa) Complainant issued demand notice to accused at places situated in

37

--Orissa state In absence of any written agreement to pay amount at Ahmadnagar jurisdiction cannot be assumed to be with said Court merely because it is stated in demand notice that payment shall be made there. -Court at Ahmadnagar has no jurisdiction to entertain complaint. 2009 Cri.L.J. 3220 Case referred AIR 2009 SC 1168 AIR 2009 SC 1355 2008 (3) AIR Bombay R 132 2007 Cri.L.J. 115 (Bomb) AIR 2001 SC 1161. Territorial jurisdiction Complaint not filed in Court in whose territorial jurisdiction cause of action arose. -Complainant not residing and was not working for gain within jurisdiction of Court. Complaint could be returned to be presented before proper Court. 2009 Cri.L.J. 452 Case referred 2007 Cri.L.J. 115 AIR 1999 SC 3762

38

Chapter - 9.

Cognizance

1. Accused not making payment within 15 days from date of receipt of notice, complainant entitled to file complaint within next month from date on which cause of action arose u/s c of Provisio of 138 N.I. Act. 2010 Cri.L.J. 1213 Case referred 2005 Cri.L.J. 755 All. AIR 2001 SC 2960 AIR 1976 SC 1947 AIR 1963 SC 1430 2. Cognizance taken before expiry of statutory period of 15 days accused did not make payment at all- Conviction cannot be set aside on ground of premature cognizance. 2007Cri.L.J. 2502 Case referred 1999 Cri.L.J. 2883 3. Presentation of complaint before expiry of stipulated period - trial Court should wait and allow complainant to establish his case or cognizance should be taken after expiry of stipulated period instead of dismissing the complaint. 2005 Cri.L.J. 3681 Case referred AIR 2004 SC 4674 AIR 2000 SC 2946 4. Cognizance had been taken much after expiry of 15 days of prescribed time - order dismissal of complaint on ground that it was premature- liable to be set aside. 2010Cri.L.J 706 Case referred AIR 2000 SC 2946 5. Dishonour of two cheque joint complaint - There is no legal bar to join trial of case in respect of both dishonoured cheque by means of a single complaint. 2009Cri.L.J. 154

39

6. Complaint filed before expiry of 15 days from date of service of notice would be premature and cognizance taken would be legal. 2008 Cri.L.J. 172 7. In view of the legal position it is clear that if the complaint is filed but the Magistrate does not proceed u/s 200 Cr.P.C. , it cannot be said that Magistrate has taken cognizance, but if the complaint is filed and Magistrate proceed u/s 200 Cr.P.C. and direct to register the case and even if fixes the date for taking evidence u/s 200 Cr.P.C. he take cognizance of the offence on the date of the filing of the complaint itself. 2008 Cri.L.J. 2172 Case referred AIR 2005 SC 4284 AIR 2000 SC 2946

40

Cognizance - Summoning of accused on photocopies 1. Summoning of accused on basis of photocopies is not improper. 2008 Cri.L.J. (NOC) 949

41

Cognizance on repeated presentation of cheque 1. Filing complaint on basis of subsequent dishonour and consequent notice without even referring earlier dishonour and consequent notice not permissible. 2009Cri.L.J 3207 Case referred 2009AIR SCW 1044 AIR 1998 SC 3043 2. Payee has right to sent cheque to bank in number of times he pleases during period of its validity. Limitation period start to run from date of last dishonour. 2009 Cri.L.J. 154 Case referred: 1995 Cri.L.J. 1384 (Kerala) (F.B.) AIR 1998 SC 3043 2000 Cri.L.J. 292 All.

42

Cognizance- Combining Cause of Action 1. Dishonour of cheque more than one cheque - Combining cause of action for holding single trial- Dishonour of the cheque constitute separate offence giving right rise to separate cause of action subject to condition that separate notices are issued in respect of each cheque Transaction cannot be held to be a single transaction attracting provision of section 219 of Cr.P.C.- Separate trial permissible. -Section 138, 147 N.I. Act Section 427 Cr.P.C. - Dishonour of cheque.Different trials for dishonour of different cheque and imposition of different sentences - Direction to run sentences of imprisonment concurrently - not obligatory for Court to direct for subsequent sentence shall run concurrently with previsous sentence refusal to give such direction - cannot lead to causing miscarriage of justice. 2010Cri.L.J 844 Case referred 2001Cri.L.J. 950 1999 Cri.L.J. 4606 1977 Cri.L.J. 992

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Chapter - 10.

Complaint u/s. 141 N.I. Act

Complaint against company 1. Offence by company - complaint - Averment that accused was at time of offence in charge and responsible for conduct of business of company - Is essential - Director of Company-Not deems to be vicariously liable merely by virtue of office he hold . -Managing Director, Joint Managing Director are in charge of and responsible for conduct of business of company by virtue of office they hold. They get covered u/s 141 N.I. Act - Signatory of cheque which is dishonoured is clearly responsible for incriminating act is covered u/s 141 N.I. Act. 2005Cri.L.J 4140 SC Case referred AIR 2004 SC 4274 AIR 2005 SC 354 2. Offence by company - Each and every person who has been arrayed as accused on grounds that he is concerned with business and affairs of company need not be convicted. Complaint for dishonour of cheque filed against respondent firm, its Managing partner and remaining partner - finding of trial Court that Managing partner of firm alone was responsible for commission of alleged offence u/s 138 N.I. Act is based on evidence. Fastening Criminal liability on him alone - is permissible in law despite the fact remaining partners concerned with affairs of firm were also arrayed as accused. 2009 Cri.L.J. 2497 Casereferred AIR2000SC145 AIR 1984SC 1824 3.Sec. 141 N.I. Act is comprehensive - cheque issued by firm of undivided hindu family - joint family business must deemed as juristic person like company or firm- hence cover u/s 141 N.I. Act. Term association of individual will include Hindu undivided family business . - All members of family can be roped into as drawers of cheque though signatory was one of them. Order quashing process against some of them - Would be premature . - Hindu Law - Joint family business - pattern of accounts is different

44

that of a partnership- There is unity of honourship and community of interest. 2009Cri.L.J 67 Case referred 2001 (`104) Comp. Case 290 (SC) 2001 (106) Comp) Case 489 Madras 4. Offence by Company- Requirement of Sec. 141 is that person sought to be made liable should be incharge of and responsiible for conduct of business of company at relevant time - This has to be averred as a fact. Clear averments in complaint that accused, Directors of Company are Managing affairs of Company and are responsible for act of company . Order issuing against them cannot be quashed - Complainant not showing how they are responsible for the conduct of the company nor it has been averred that the offence has been committed by them with their consent or connivance or is attributable to any neglect on their party. Order issuing process against them liable to be quashed 2009 Cri.L.J. 104 Case referred AIR 2007 SC 1662 AIR 2005 SC 3512 5. Companies Act Sec. 34 , Partnership Act - Proprietary concern is neither in company incorporated under Companies Act nor a firm within meaning of provisions of sec. 4 of Partnership Act. - Sec. 138, 141 N.I. Act quashing of complaint - In complaint appellant accused described as business concerned and not as a company or partnership firm or association of persons. - Complainant not stating as to in which capacity appellant had been serving business concern - Prima facie cases of vicarious liability against appellant not made out- Order of High Court declining to exercise jurisdiction u/ 482 to quash complaint against appellant liable to be set aside. 2007Cri.L.J 2436 SC Case referred 2007 (3) Scale 245 AIR 2006 SC 3086 AIR 2005 SC 3512

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AIR 1999 SC 1484 6. Offence by Company - Specific averment made in company that accused persons were incharge of and control of day to day affairs and management of accused company - Specific mention therein that one accused was Chairman of company and others were responsible for conduct of business of company. - Complaint thus making out case u/s 141 N.I. Act. -Order quashing process u/s 138 N.I. Act and other accused mentioned therein , proper- It cannot be said that process was issued only u/s 138 and not under section 141 N.I. Act Hence complaint cannot be proceeded against Chairman and accused persons. 2009 Cri.L.J. 995 Case referred 2008Cri.L.J 1134 2007Cri.L.J 2207 AIR 2006 SC 3086 7. Offence by company - Vicarious liability - cheque of huge amount issued by company in favour of another company - categorical allegation in complaint that payments were made after meetings held by and between representative of company and accused person which included respondents , Chairman and M.D. of drawer company. Respondent could not plead ignorance of entire transaction - allegation in complaint satisfy the ingredients of provisions of Sec. 141 N.I. Act. Process could be issued against said respondent accused. 2007Cri.L.J 2442 SC Case referred AIR 2007 SC 912 AIR 2007 SC 3512 (2005) 13 SCC 213 8. Offence by company - impleadment as accused persons. It should be shown that accused was connected with management of firm or hold any office in said firm- merely because he was son of late partner of firm cannot be ground to implead him as accused 2007Cri.L.J 2538 9. Offence by company - accused persons alleged that there was no material to show that at time of offence they were incharge of or responsible to company for conduct of business complaint would not be quashed on said ground.

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- Sec. 205 Cr.P.C. - if at any stage trial court comes to conclusion that accused persons are trying to delay completion of trial, it can refuse prayer for dispensing with personal attendance. 2005Cri.L.J 2566 SC 10. Offence by company - plea by director that he was prejudiced by mentioning of his name as was not in charge of affairs of company. Prosecution never intended to prosecute him in his individual capacity. None prosecution of Directors or Director responsible for management of affairs of company or incharge of its affairs - Is no bar to prosecute company- Company is invariably liable prosecution though there is no specific allegation against Director. 2005Cri.L.J 3805 Case referred AIR 2004 SC 4087 AIR 2004 SC 4274 AIR 2004 SC4711 11. Complaint filed against accused company and its director - Winding up proceeding against company- Criminal liability is enforced on company and Director of company for their act. No question of claiming any right our assets of company, after winding up proceeding were over - company and its Director cannot shirk their criminal liability on ground that company was already wound up and official liquidator had taken charge of affairs of company- Companies Act Sec. 446. 2005Cri.L.J 2289 Case referred 2000C.L.C. 736 (Kerlal ) 1998 Cri.L.J. 4095 Kerala AIR 1970 SC 1041 12. Quashing of proceedings - Offence by company- Quashing suit on ground that accused company is sick - purchase orders were issued after company was declared sick. Such facts not disclosed to complainantSupplier- Cheque for payment of price of material supplied - Issued by Director of accused company with full knowledge of fact- Conduct of accused indicates that right from inception, accused had no intention of paying amount for purchase made- High Court refusing to quash proceeding - No interference by Supreme Court. 2008Cri.L.J 3960 Case referred

47

AIR 2000 SC 926 AIR 2000 SC 954 13. Order summoning Chairman and Director of company - Averments in complaint showing that accused was Chairman of company Question of his responsibility for business of company not seriously challenged- Clear allegation against accused to effect that they were officers and responsible for affairs of company- Trial yet to be started. Held that it would be inappropriate to quash proceedings against accused. 2008Cri.L.J 3049 SC Case referred AIR 2007 SC 1454 AIR 2007 SC 1650 AIR 2007 SC 1682 AIR 2005 SC 3512 14. Vicarious liability of Director of Company - It is obligatory on part of complainant to make specific allegation as are required by law to make Director vicariously liable -Strict construction is necessary Merely been described as Director is not sufficient. 2007Cri.L.J 1419 SC Case referred AIR 2006 SC 3086 AIR 2005 SC 3512 15. Cheque issued on behalf of respondent - Company was returned on account of stop payment instruction- Accused persons, who were Chairman, M.D. and Joint Director by virtue of their offices can be said to be incharge of and responsible for conduct of business of company Signatory of cheques which was dishonoured was also clearly responsible for incrimination Act - There so called none involvement will have to be proved by leading evidence during trial. -Plea that complainant had not made specific averments sufficient to invoke provisions of sec./ 141 N.I. Act - Is not tenable - Further plea that complaint against accused cannot be sustained as in some of complaints Magistrate had not issued process - Is liable to be rejectedOrder discharging accused persons is improper. 2007Cri.L.J 273 Case referred

48

AIR 2005 SC 38 AIR 2005 SC 2436 AIR 2004 SC 4711 AIR 2004 SC 4674 AIR 2002 SC 182 AIR 2002 SC 985 AIR 2001 SC 289516. Offence by company quashing of proceeding - Accused one of Directors - Plea that he had intimated company of his desire to retire before cheque in question was issuedCannot be ground to be quash proceedings against him. 16. Fact that allegations against Director are genuine- Not ground to quash proceedings 2008 Cri.L.J. 4316 SC Case referred 2007 (9) J T 449 19. Sec. 138 N.I. Act and sec. 69 (2) Partnership Act- Dishonour of cheque - Private complaint for offence u/s 138 not barred qua sec. 69 (2) of Partnership Act- Amount required to be paid as price of articles of goods- Is a legitimate debt or liability and therefore it is legally enforceability debt or liability. Disability of unregistered firm under 69(2) of Partniership Act to file a suit to enforce a right arising out a contract - does not make such debt or liability, a not legally enforceable debt or liability. 2008 Cri.L.J. 498 Case referred AIR 2000 SC 2676 2000Cri.L.J 2386 (A P) 20. Sec. 138, 142 N.I. Act cheque dishonour proceedings - can be initiated against a person who has signed a cheque. Cheque of a joint account signed by two persons. Complainant can choose and either proceed against both signatories or proceed against proceed against one of signatories. Complainant cannot be compelled to proceed against both signatories. Very fact that petitioner accused having signed chequeWould establish that petitioner accused was also an active partner responsible for the day to day affairs of the accused company. Contention of the petitioner accused that he was a sleeping partner of the firm - Not tenable. 2009Cri.L.J 224

49

Complaint through company 1. Sec. 7, 138 N.I. Act - Drawer - Can be a natural person or a body of persons , whether incorporated or not. - Cheque issued by company signed by its Director - Dishonoured for insufficiency of funds - only company - Being drawer of cheque is entitled to notice u/s Proviso (b) to Sec. 138 N.I. Act its Director facing indictment because of sec. 141 or not entitled to seperate notices. 2005 Cri.L.J. 1931 Case referred AIR 2001 SC 518 2. Cheque dishonour complaint - can be made by payee or holder in due course of cheque. Complaint lodged in name and on behalf of appellant company who is payee of cheques - iis maintainable- fact that complaint was lodged by Manager or Deputy Manager who had not been authorised by Board of Directors to sign and file complaint on behalf of company- cannot be a ground for quashing complaint, since defect is curable. 2002Cri.L.J 266 Case referred (1999) 1 SCC 113 1998 Cri.L.J. 856 1998 Cri.L. 1397 3. Sec. 138, 141 N.I. Act, Sec. 256 (1), 255 (1) Cr.P.C. Dishonour of cheque - Complaint filed by partnership firm - Subsequently, complainant found stood admittedly dissolved and was taken or by a company. No application to continue prosecution was filed by company. Absence of a competent person to continue the prosecution , will stand in way of complainant firm continuing prosecution after obtaining leave from court. Acquittal on ground that complainant is absent u/s 256 (1) and not under section 255 (1) Cr.P.C. 2009Cri.L.J 305 Case referred AIR 2005 SC 48 4. Dishonour of cheque - Complainant who can be - Cheque has not been endorsed by payee in favour of anyone - it is payee alone whether corporeal or incorporeal person, who can be the complainant, if

50

company if complainant, it can be represented by any employee even by a non employee authorised person. Government company is not a public servant but every employee of such company is a public servant. Sec. 200 Proviso a. Complaint by a government company examination of complainant and witnesses - requirement as to - compliance with - Not necessary since employee representing in such company is a public servant. 2009Cri.L.J 1299 Case referred AIR 1998 SC 596 AIR 1972 SC 2639 AIR 1970 SC 7 5. Complainant - Manager in Bank, allegedly advanced loan to accused -Dates mention on cheque and rest of contents were not in same ink - It was improbable that complainant would advance money to a person who had already defaulted in repayment of loan - Evidence on record showed that complainant did not have any money with him- In fact he owed money to others defence of accused is probabilised by complainant's on evidence. Cheques were not issued for discharge of any debt - Accused is entitled to be acquitted 2009Cri.L.J 882 Case referred AIR 2008 SC 1325 (2008) 1 SCC 258

51

Chapter -11.

Complaint through authorisation

1. Complaint by manager of partnership firm- Complaint filed by a person who was neither partner nor authorised by partner to file complaint. Authorisation is necessary- Even a person who is looking after entire business affairs of firm cannot file such complaint without authorisation. In absence of authorisation complaint is liable to be dismissed. 2009 Cri.L.J. 2154 Case Referred: AIR 2009 SC 422 2002 Cri.L.J. 2142 1998 Cri.L.J. 4735 Kerala AIR 1984 SC 5. 2. Payee through his power of attorney holder is maintainable 2008 Cri.L.J. 1001 Case referred AIR 2005 SC 48. 3. Complaint not on behalf of firm or against him. Not suit to enforce right arising from a contract on behalf of any person suing as a partner of the firm, suing another partner of the firm. Sec. 69 (2) of Partnership Act will not apply. No fact of non registration of partnership firm. Complaint not liable to be dismissed for want registration of firm. 2008 Cri.L.J. 1001 Case referred AIR 2001 Kant. HCR 1213. 4. Son as a power of attorney holder can continue prosecution on behalf of his father. 2007 Cri.L.J. 2978 Case referred 2005 (1) Andh. L.D. (Cri.) 498 (FB) 5. Complaint relied on letter authorising manager firm to initiate legal proceedings with regards to cheque in dispute - Authority of manager was not proved.- Neither complainant was payee in respect of said cheque not compliant was filed in name of firm dismissal of complaint is proper. Complaint even through a manager or an authorised representative, such complaint has to be on behalf of the payee or the holder in due course and cannot be filed in personal capacity either by

52

manager or authorized representative without filing the said complaint for and on behalf of the payee of the holder in due course. 2009 Cri.L.J. 4031 Case referred 2002 Cri.L.J. 266 1984 Cri.L.J. 1 AIR 1971 SC 1865 6. The complaint can be filed through the holder of power of attorney and such power of attorney can also be examined in place of the complainant if he has personal knowledge of the transaction in question or the bills had been signed by him. Complainant in this case was not filed in the name of payee.The holder of power of attorney has projected himself as the complaint. 2009 Cri.L.J. 2186 Case referred AIR 2009 SC 422 2008 Cri.L.J. 1509 AIR 1972 SC 2639 7. Complaint by multi - state cooperative society - is to be filed by persons authorized by a resolution in their, passed by Board of Directors. Power to lodge complaint could be given to person only by a resolution of Board of Directors. 2010 Cri.L.J. 734 Case referred AIR 2009 422 2008 Cri.L.J. 998 2007 Cri.L.J. 858 2002 Cri.L.J. 266 (SC ) 8. Complaint filed by employee of the complainant firm- But no authorization was executed in his favour by firm- complaint not maintainable. 2008Cri.L.J (NOC) 951 H P 9. Unregistered firm can institute a complaint about dishonour of cheque . 2008Cri.L.J (NOC) 948 GAU. 10. Complaint lodged in name and on behalf of appellant company who

53

is payee of cheque - Is maintainable- Fact that complaint was lodged by manager of deputy manager who has not been authorised by Board of Directors to sign and file complaint on behalf of company - cannot be ground for quashing complaint, since defect is curable. 2002 Cri.L.J. 266 SC Case referred (1999) 1 SCC 113 1998 Cri.L.J. 856 1998 Cri.L.J. 1397 11. Resolution of complainant company authorising person to file complaint was not happily worded - Complaint cannot be dismissed on this ground. 2006Cri.L.J 2065 Case referred AIR 2005 SC 3512 AIR 2004 SC 4274

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Chapter - 12. Cheque toward Security any debt or other liability -Sec. 139 N.I. Act 1. If a cheque is issued for security or for any other purpose the same would not come within the purview of the sec. 138 of the Act. 2009 CRi.L.J. 4460 Case referred 2006 SC 3366 2. Security inter alia means things deposited for hypothecated as pledge for fulfillment of undertaking or payment of long to be forfeited in case of failure, security is given, not as a piece of paper to be retained by the creditor but to be enforced when the debtor fails to pay the amount. In other words, no doubt the cheque was issued as security but demand to clear the debt was made and upon failure security was enforced AIR 2009Cri.L.J 4250 Case referred AIR 2002 SC 3014 3. It may be pointed out that sec. 138 of the Act had three ingredientsthat there was a legally enforceable debt - That the cheque was drawn from the account of banker for discharge, in whole or in part, of any debt or other liability, which presupposes a legal enforceable debt, and -that the cheque so issued had been returned due insufficiency of funds. There is no quarrel or the preposition that section 139 of the Act raises a presumption in regard to IInd ingredient only. Existence of legally recoverable debt is not a matter of presumption. It merely raises presumption in favour of the holder of the cheque that the same has been issued for discharge of any debt or other liability also, once execution of the promissory note is admitted or proved the presumption u/s 118 (a) of the Act would arise that it is support by consideration. 2009 Cri.L.J. 2885 Case referred AIR 2008 SC 1325 4. Cheque issued by way of security - plea that dishonour of such cheque does not attract criminal liability - Accused also alleging interpolation in amount written in number- Fact of interpolation corroborated by expert evidence - Conviction recorded without considering legal plea and without giving satisfactorily reason for disbelieving fact of interpolation liable to be set aside.

55

2008Cri.L.J 3004 5. Presumption as to legally forcible - rebuttal of - amount advance by complainant to accused was large amount not repayable within few months- failure by complainant to disclose the amount in his income tax return or book of accounts-Sufficient to rebut presumption u/s 139 of the Act. - Presumption as to issuance of cheque in discharge of legally enforceable debt amount advanced by complainant to accused was unaccounted cash amount. It was not disclosed in income tax return liability to repay uncounted cash amount cannot be said to be legally enforceable liability within meaning of explanation of sec. 138 N.I. ActAcquittal of accused proper. 2009 Cri.L.J. 3777 Case referred AIR 2008 SC 1325 AIR 2007 SC 451 AIR 2005 SC 2277 6. Legally enforceable liability or other liability - Agreement of sale of two shops between accused and complainant - Accused paid part of consideration amount and issued posted cheque towards consideration amount which was dishonoured. Complainant was in possession and enjoyment of shops and did not deliver to accused any of shops even after of receiving part of consideration amount. Complainant would be entitled to receive balance consideration amount only on execution and registration of sale deed in favour of accused- Payment of balance consideration amount was other liability and not legally enforceable liability. - Cheque was issued by accused to complainant under an agreement between them - If there was nay violation of any term of agreement by accused, remedy opened to complainant to take appropriate step before Civil Court and Criminal Court - Acquittal proper. 2010Cri.L.J 1061 Case referred AIR 2008 SC 1325 AIR 2009 SC 568 7. Discharge of debt rebuttal of presumption u/s/ 139 of the Act - Court can take notice of conduct of parties- respondent alleged to have borrowed huge sum from appellant - Complainant despite suits for recovery of defaulted amount filed against him by appellant - no

56

document executed - amount advanced carry no interest - finding of fact by High Court that respondent did not issue cheque in discharge of any debt and discharge burden of proof case on him u/s 139 of the Act Being not perverse - cannot be interfered under Article 136. 2008 Cri.L.J. 434 SC Case referred 2007Cri.L.J 3209 AIR 2006 SC 3366 8. Sec. 139 N.I. Act merely raises presumption in favour of holder of cheque that same has been issued for discharge of any debt or other liability. Existence legally recoverable debt - Is not a matter of presumption. - Defence - proof - accused not required to step into witness box - He may discharge his burden on basis of material already brought on record. Question whether statutory presumption rebutted or not - must be determined in view of other evidence on record. 2008Cri.L.J 1172SC Case referred AIR 2006 SC 3366 AIR 2007 SC 451 AIR 2005 SC 2277 9. Sec. 138, 139, 118- Dishonour of cheque - Presumption as to-Rebuttal of - Accused carrying on transaction in shares through respondent in Stock Exchange allegedly issued cheque for discharge of debt which was dishonoured - Said liability by way of debt arose in terms of transaction - Discrepancies found in book of his account maintained by7 the respondent for proving said transaction- defence of accused that cheque was issued for purpose of discounting appears to be probable. Accused discharging his initial burden - Failure in discharge of burden shifted to him -conviction of accused set aside. 2006 Cri.L.J. 4607 SC Case referred AIR 2005 SC 3708 AIR 2003 SC 2035 AIR 1999 SC 1008 10. Plea by accused that cheque was in possession of complainant for collateral security - cannot be ground for quashing complaint. It is

57

matter to be looked into stage of trial whether cheque was given in blank or in security. 2006 CRi.L.J. 3312 Case referred 2005 Cri.L.J. 3029 (Foll.) (2004) 1 Crimes 567 (A.P. ) 1995 Cri.L.J. 560 (A.P.).

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Chapter - 13.

Miscellaneous Nonappearance of complainant

1.Dismissal of complaint on ground of non appearance of complainant. - Two constraints are imposed in the Court for exercising power u/s 256 Cr.P.C. a. If the court think that in a situation it is proper to adjourn the hearing then the Magistrate shall not acquit the accused. b. When the Magistrate considers that personal attendance of complainant is not necessary on that day, the Magistrate has the power to dispense with his attendance and proceed with the case. When the court notices that the complainant is absent on a particular day the Court must consider whether personal attendance of the complainant is essential on that day for the progress of the case and also whether the situation doesn't justify the case being adjourn to another date due to any other reason. If the situation does not justify the being adjourn the Court is free to dismiss the complaint and acquit the accused, but if the present of the complainant on that day was quite a necessary then resorting to the step of axing down the complaint may not be a proper exercise of the power envisaged in the section. 2006 Cri.L.J. 3170 2009 Cri.L.J. 3911 P & H High Court Case referred 2002 Cri.L.J. 3815 1998 Cri.L.J. 856. 2. Complainant closed his evidence Court posted date for argument. Accused did not want to examine any witness. Complainant not present on date of argument- Court dismissed case for non appearance of complainant- Not proper. as court should have passed order on basis of evidence available on record. Though it is a summon case . 2004 Cri.L.J. 2766 Case referred 2004 Cri.L.J. 143 Bombay. 3. In a case of sec. 138 of N.I. Act it is always the complainant who is at stake for his money which ought to have been paid through the cheque. Learned Court ought to have adopted the course either to adjourn the case for hearing or to some other day under provision of section 256 Cr.P.C. as to grant exemption to the complainant on particular date of his

59

non appearance. 2009 Cri.L.J. 3925 Case referred AIR 2008 SC 1296 2004 Cri.L.J. 406 (MP) (2002) 7 SCC 726 Mohd. Azeem Case. 4. Dismissed in default for single instance of nonappearance of complainant improper. It should be endeavour of the Court to render substantial justice to t he parties and not to resort to technicalities to defeat the substantial right of the person who has knocked its door in expectation that his grievance would be rendered. The basic object and purpose of which is to harness the violators of the transaction arising from mercantile. 2007 Cri.L.J. 3460 Case referred 2006 Cri.L.J. 3172 P. & H. High Court (2002) 7 SCC 726 Mohd. Azeem Case.

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Nonappearance of complainant Dismissed in default - Restoration 1. Complaint dismiss in default - Restoration of - three complaints were filed by complainant against three different persons- Notings maintained in diary of Court showed presence of complainant in two complaints only - Due to oversight presence of complainant could not be noted in third complaint which came to be dismissed in default. - Complainant gave sufficient reasons and sought restoration of same - Restoration application however, dismissed for no valid reasons- Writ petitions against, filed within period of limitation from date of knowledge of complainant - Allowed and treated as revision. 2007 Cri.L.J. 2596

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Bar on second trial Q.1. - Whether a person could be tried over again for the offence of cheating (sec. 420 IPC) on the basis of a second dishonoured cheque when he has already been tried and convicted of the same offence on the basis of another cheque in the same transaction ? - In view of the sec. 300 (1) Cr.P.C. respondent who was already tried for the offence u.s 420 I.P.C. making use of one of the three cheques could not have again been tried for the same offence based on the other cheques issued for discharge of other portion of the sale considerationSec. 218, 219 Cr.P.C. have no application. Whether he could be tried subsequently for the offence of u/s 138 N.I. Act ? Ans. Considering the ingredients to constitutes offence u/s 420 IPC and Sec. 138 N.I. Act. These separate and distinct offences constituted by separate facts. There is no constitutional bar in prosecuting the offender for the offence punishable under 420 IPC in spite of his prosecution and conviction u//s 138 of the Act. 2009 Cri.L.J. 1938 Case referred AIR 1988 SC 1106 2008 Cri.L.J. 3178 SC 1991 (2) Kerala L.T. 341.

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Discharge application 1. Sec. 239, 245 Cr.P.C., Sec. 138 N.I.Act -Through application for discharge was made u/s 239 and 245 Cr.P.C. wrongly, trial Magistrate may treat same as under section 258 Cr.P.C and see whether there is material to proceed further - sufficient material on record to proceed with trial - Order of Magistrate rejecting application for dischage - Is proper. 2005Cri.L.J 3805 Case referred AIR 2004 SC 4087 AIR 2004 SC 4274 AIR 2004 SC 4711 2. Sec. 138 N.I. Act petition for discharge - Triable like summons casePetition for discharge not maintainable . 2005 Cri.L.J. 4492 Case referred (2005) 4 SCC 417 2004Cri.L.J 4609 2004Cri.L.J 4874

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Endorsement refused 1. Complainant's case that he has sent notice under registered post to accused respondent, which was returned to an 'endorsement refused' There is an endorsement refused but there is no signature of any witness before whom the accused person refused to take notice or any signature made by accused himself on said letter - Complainant has not examined postal peon who went to deliver said letter- Complainant has further stated in his evidence that house for which cheque was given to him, did not belong to him - Complainant has failed to prove his case and also failed to comply provisions of sec. 138 (c) - Order of acquittal is therefore proper. 2009Cri.L.J 3768 2. Service of notice - Is sine qua non for launching prosecution - cheque was issued on behalf of company - Notice jointly address sent to M.D. of company, to the company and to the firm in one envelop - was returned by postman as refused - would be deemed to be duly served refusal to accept is always considered as good service- Presumption of service of notice cannot be rebutted by accused Managing Director by mere denial in statement u/s 313 Cr.P.C. 2008Cri.L.J 3770

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Stop Payment/Account closed 1.Direction of stop payment of cheque given to bank - would not take offence out of sweep of Sec. 138 N.I.Act. 2010Cri.L.J 748 Case referred AIR 2003 SC 2035 AIR 1996 SC 2339 2. Sec. 138, 139 N.I. Act - Not liable to be quashed on ground of dishonour of cheque by reason of stop payment instruction. Presumption u/s 139 that cheque was received by holder for discharge of that liability arises - Presumption though is rebuttable 2002Cri.L.J 266 SCC Case referred (1999) 1 SCC 113 1998 Cri.L.J. 856 1998 Cri.L.J. 1397. 3. Account closed means cheque is returned for insufficiency of funds. Account which already stands closed cannot attract the mischief of the sec. 138 N.I. Act, this plea is not maintainable. 2010Cri.L.J 2502

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Signature of complainant should have been signed for expert opinion- plea of accused 1. Plea by accused that signature of complainant in hbis letter should have been sent for expert opinion - onus of proof was on him to take steps - Nothing on record to indicate that he took steps to take assistance of an expert to prove that purported signature of complainant in letter was that of complainant- In case it was clear that cheque was issued for sum specific or liability - it is not open for accused to try capitalized his own laches and fault - Conviction of accused is proper. 2002 Cri.L.J. 4025 Case referred AIR 2005 SC 4161 AIR 2002 SC 2907

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Cutting on cheque 1. Accused had taken loan from complainant - In discharge of his liability , accused issued cheque in respect of particular account number maintained by him- Said account number on cheque was scored off by complainant and another account number of accused was incorporated therein -This cutting was not authenticated by accused - since accused never intended to issue cheque in relation another account number to discharge his liability, dishonour of same would not fasten any criminal liability on him. 2009Cri.L.J 2324 Case referred AIR 2000 SC 954 AIR 1999 SC 3762

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Endorsement complainant

on

cheque

without

knowledge

of

1.Petitioner accused issued cheque in favouor of complainant for discharge of part of debt - factum of dishonour of cheque and suing of legal notice by complainant not disputed- endorsement 'sans recourse' on cheque made by accused without knowledge of complainant and in absence of mentioning said fact in its reply notice by accused prosecution cannot be quashed. - It can be said that by making some endorsement by the accused himself on the cheque does not exonerate him from t he penal provision under the statue. 2007Cri.L.J 2901

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Disputed Signature 1. Disputed signature - cheque was allegedly revalidated by accused respondent - Since the revalidation was denied by respondent, the burden was certainly on the applicant who was claiming fresh period of limitation - No application to examine cheque by hand writing expert was made by complainant - Comparison of disputed signature with standard signature of accused by Magistrate- Fully justified. No need of interference as to order of acquittal - Application for leave to file appeal against acquittal liable to be rejected. 2009Cri.L.J 4176 Case referred AIR 2002 SC 38 1980 Cri.L.J. 396

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Report of loss of cheque 1. Cheque returned by bank on ground that report of loss of cheque was filed by drawer. Sec. 138 is not attracted. 2009Cri.L.J 3454 Case referred 2009 AIR SCW 1836 AIR 2008 SC 2255 AIR 2006 SC 407 - The parameters for invoking the provisions of sec. 138 of the Act being limited, we are of the opinion that refusal on the part of the bank to honour the cheque would not bring the matter within the mischief of the provision of the sec. 138 of N.I. Act. 2. Bank return cheque issued by accused in favour of complainant towards price of bricks supplied - reason given by bank that cheque were reported to be lost by drawer. Cheque lost also amounts to returning cheque unpaid , amount of money standing standing to credit of that account is insufficient to honour cheque - same is fully covered u/s 138 N.I. Act. 2010Cri.L.J 1209 3. Complainant had lent Rs. 65,000/- to petitioner accused personwhere upon accused person parted with cheque which later bounced plea by accused that he had lost cheque and even made publication about it being missing - Was concocted and cannot be relied uponHence conviction u/s 138 was proper - But sentence of one year imprisonment not being commensurate with gravity of offence was reduced to one month 2010Cri.L.J 633 Case referred AIR 2005 4161 AIR 2002 SC 2907

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Death of person issuing cheque 1. Death of person issuing cheque -process cannot be issued against his legal representatives. - Death of person issuing cheque - initiation criminal prosecution against his L.R. is abuse of process of CourtComplainant launching untenable prosecution against them is liable to pay compensation. 2006Cri.L.J 222

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Complaint filed by private party against respondent/for false complaint so caused notice to complainant to pay compensation- is illegal. 1.Discharge of accused from prosecution - summon case - complaint filed by private party against respondent for alleged offence of dishonour of cheque u//s 138 N.I. Act is not a case instituted otherwise than on complaint.-provision of sec. 258 Cr.p.C. not attracted. -Complaint filed against respondent accused offence for dishonouor of cheque- Accused raising defence at pretrial state. -Order passed by Magistrate considering said defence is to stop proceeding and issuing so cause notice to complainant to pay compensation for filing false complaint- is illegal and liable to be quashed. 2006Cri.L.J 1660 Case referred 2001 Cri.L.J.3322

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Complainant had already taken recourse to arbitration 1. Quashing of, on ground that complainant had already taken recourse to arbitration proceeding- not proper. 2009Cri.L.J 787 Case referred 1999 AIR SCW 3492 (1999) 8 SCC 686

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Section 155 Cr.P.C. not attract 138 N.I. Act 1. Sec. 138, 142, 143 N.I.Act and section 155 Cr.P.C. 1. Dishonour of cheque - prosecution for - had to be initiated by lodging of complaint before court.- Sec. 155 of Cr.P.C. which require clear permission of Magistrate for taking cognizance of non cognizable offence by police cannot be invoked when special procedure is prescribed u/s 142, 143 N.I. Act - Order of Officer -In - Charge police station accepting F.I.R. liable to be quashed. 2008Cri.L.J 3650 Case referred AIR 2007 SC 1274 AIR 1999 SC 1131

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Alteration of dates on cheque 1. Sec. 87 138 N.I. Act invalid cheque - can be revalidated voluntarily by altering the dates so as to give fresh life to cheque for another six month - defence in that alteration in the date was not made voluntarily would not constitute ground for quashing cheque dishonour complaint. It is the question of fact to be established on evidence during trial 2002 Cri.L.J. 203 SC

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Difference in amount mentioned in words and figure 1. Difference in amount mentioned in words and figure - cheque cannot be termed as invalid.-Amount stated in words shall be amount undertaken or ordered to be paid. 2009 Cri.L.J. 1213

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Who can file the complaint 1. Who can file complaint - Power of attorney holder of payee or a holder in due course - can file complaint provided guidelines stated to be followed. - Complaint can be presented by GPA on behalf of the payee provided - The complaint shall be signed by the payee himself - There shall be also an affidavit of the complainant in proof of his execution of GPA, added to the production of the said power of attorney document. - Sworn statement of GPA can be recorded on the date of presentation of the complaint. - Sworn statement of payee (Complainant) shall have to be taken in a future date on his appearance in Court, the Magistrate shall thoroughly examine the statements of GPA holder as well as the original complaint and document produced before him and exercise his discretion vested u/ s 202 and 203 Cr.P.C. The guidelines stated are not exhaustive and in other circumstances the Magistrate shall exercise his discretion judicially and in conformity of other provisions of law applicable. 2005Cri.L.J 3572 Case referred : AIR 2005 SC 48 AIR 2005 SC 439 2004Cri.L.J 4119 2003CRi.L.J. 1938 2002 Cri.L.J. 266 2001Cri.L.J 3623 2000Cri.L.J 930

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Bouncing of Cheque is an individual liability 1. Allegation that petitioner accused had only accompanied his son when complainant advanced loan to his son - No allegation of petitioner having issued cheque to complainant which later bounced Complainant neither shows any dishonest or fraudulent intention on part of petition - Accused not indicates that he induced complainant to give loan - Cheque admittedly were issued by son of petitioner - Since bouncing of cheque is an individual liability- Order taken cognizance of offences u/s 138 N,.I. Act and Sec. 420 of Penal Code against petitioner accused was liable to be quashed. 2010 Cri.L.J. 399.