Presentation on

Negotiable Instrument Act,1881. With Cases

Presented To:Prof. (Dr) Resham Chopra Sub.:- Legal Aspects
Presented By:Khyati Patel Ashish Kumar Singh & Sandhya Nair. PGDM, Trim-1

OBJECTIVE
For commercial transaction, it is always not possible for a business man to carry huge amount of cash. Business man , therefore adopt a new method of exchanging documents- Bills of Exchange, Cheques etc, in place of money. These documents which are used as a substitution for money are known as negotiable instrument. The Law relating to negotiable instrument is contained in the Negotiable Instrument Act, 1881.

INRODUCTION
The term Negotiable instrument literally means a written

document transferable by delivery . According to this Act A negotiable instrument means a Promissory Note, Bill of exchange or Cheque payable either to order or to bearer .
Negotiable Instruments can be of two kinds :-

1) Negotiable by Statute: The Act mentions only three kinds of instruments by Law, i.e. Promissory Note , Bill of Exchange and Cheque. 2) Negotiable by Custom or Usage: Other than above three, all other custom and usage based locally negotiable instruments belong to this type. Ex:- Hundis, Bankers Draft , Treasury Bill..etc

CASE 1: B.N.Tripathi
Civil Court, Kanpur.
Plaintiff: B.N.Tripathi

v/s Rajendra Kumar Srivastava

Defendant: Rajendra Kumar Srivastava Case: Tripathi had taken a loan of Rs 35,000 in the year

November(2011) from complainant Rajendra Kumar Srivastava for the marriage of his daughter. He passed a cheque of loan amount to Rajendra Kumar just to clear his dues. But the cheque was not honoured by his bank. Despite the service of legal notice, the professor did not return the loan amount. Decision: Special metropolitan magistrate J P Agarwal, on Thursday (11th October), punished a professor of Chandra Shekher Azad Agriculture University professor named as B N Tripathi under Negotiable Instrument Act (cheque bouncing) with one-year simple imprisonment and a fine of Rs 70,000.

CASE 2: Modi Cements Ltd. vs Kuchil Kumar

Nandi
Plaintiff: Modi Cements Ltd. Defendant: Kuchil Kumar Nandi (1998) Supreme Court of India. Case: Kuchil Kumar Nandi draws a cheque in favour of

Modi Cements Ltd. After having issued the cheque he informs Modi Cements Ltd not to present the cheque for payment. He also informs the bank to stop payment. Under provisions of the Negotiable Instruments Act, 1881, the said acts of Kuchil Kumar Nandi constitute an offence against him. Result declared as-The object of Sections 138 to 142 of the Act is to promote the efficacy of the banking operations and to ensure credibility in transacting business through cheques.Because of insufficiency of amount to honour the cheques or the amount exceeding the arrangement made

Case 3:Rajkumar Santoshi v/s PVR Pictures

Plaintiff: PVR Pictures Defendant: Rajkumar

Santoshi .

Case: Rajkumar Santoshi gave a cheque for 50 lakh against the

advance for filmmaking to PVR Pictures, which did not get cleared due to "insufficient funds", so a cheque-bouncing case has been filed against the director at the Metropolitan Magistrate's Court in Delhi by PVR Pictures. Jurisdiction: The PVR lawyers sent a legal notice to Santoshi demanding the payment but he failed to make it on the due date. The court has issued the summons to Santoshi to appear on October 7, 2012.

CASE 4: Rajkumar Sahajwani of Saibaba Investment v/s

Sadhu Manjwani
Plaintiff: : Rajkumar Sahajwani of Saibaba Investment Defendant: Sadhu Manjwani. Nagpur Bench Of Bombay High Court. Case: Saibaba Investment was engaged in the business

of sale and purchase of shares and securities. Various transactions of sale and purchase of shares, debentures and securities were entered into between the firm and respondent Sadhu Manjwani between February 1995 and March 1996. The outstanding amount against Manjwani was Rs4.46 lakh. The firm then entered into mutual agreement with him for clearing their dues. However, the cheque was dishonoured and returned unpaid with endorsement 'payment stopped by the drawer.

Continue.
Judgment Given: Sahajwani then lodged a
complaint in the capacity of power of attorney holder under NI Act in the sessions court which was dismissed on the point of non-maintainability of the complaint for want of authorization from the sole proprietor of Saibaba Investments - Jyoti Sahajwani - who was payee of the cheque. He then challenged this judgment in the high court, but it was also dismissed as the petitioner failed to provide other documents apart from power of attorney.

CASE 5: Nunna Gopalan vs Vuppuluri

Lakshminarasamma on 25 October, 1939.
Plaintiff: Nunna Gopalan Defendant: Vuppuluri Lakshminarasamma . Madras High Court. Case: On 10th December 1933 the respondent executed a

promissory note in favour of one Maddipati Tattabayi, alias Tata, defendant 2 in the suit out of which this petition arises. The respondent saya that she paid the amount due on the promissory note two days later, but the instrument was left in the hands of the payee, who the next day endorsed it to the petitioner. The petitioner instituted a suit on the promissory note in the Court of the District Munsif of Kovvur.

CASE 6: Indo Polycoats Pvt Ltd v/s Gopal Goyal Kanda

Plaintiff: Indo Polycoats Pvt Ltd

Defendant: Former Haryana minister Gopal Goyal Kanda &

Brother. New Delhi Trial Court. Case: The cheque bounce case was registered in 1997 against Gobind and Gopal on the complaint of Indo Polycoats Pvt Ltd, engaged in manufacturing of coated fabrics and vinyl flooring. In August 1997, the complainant had got a request from Kanda's company Kanda Polymers for supply of coated fabrics. Two cheques of Rs 2 lakh and Rs 2.10 lakh were issued by Gobind, as authorised signatory of the firm, in the name of the complainant firm and a case under the Negotiable Instruments Act was filed against the Kanda brothers as the cheques got dishonoured due to

Thank You