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of <h1>Court Upholds Complaint Validity; Presumption Applies Even if Cheque Dishonored by Court Order; MD Held Liable.</h1> <h3>Nexus Health And Beauty Care Private Limited Versus National Electrical Office</h3> The court dismissed the petition, upholding the validity of the complaint and summoning order under Section 138 of the Negotiable Instruments Act, 1881. ... - Issues Involved:1. Validity of the complaint and summoning order u/s 138 of the Negotiable Instruments Act, 1881.2. Grounds for dishonor of the cheque.3. Service of notice.4. Responsibility and liability of the Managing Director.Summary:1. Validity of the complaint and summoning order u/s 138 of the Negotiable Instruments Act, 1881:The petitioners challenged the complaint and the summoning order dated 17.3.2009 issued by the Judicial Magistrate, Nalagarh, u/s 138 of the Negotiable Instruments Act, 1881. The petitioners contended that the complaint was not maintainable as the cheque was dishonored due to a court order for attachment, not for insufficient funds. The court, however, held that the presumption u/s 139 is attracted even in cases of stop-payment instructions and that the burden of proof lies on the accused to show sufficient funds were available.2. Grounds for dishonor of the cheque:The cheque issued by the petitioners was dishonored with the remark 'payment stopped by attachment order/court order.' The petitioners argued that this does not constitute an offense u/s 138 of the Act. The court referred to the Supreme Court's decision in M.M.T.C Ltd. v. Medchl Chemicals and Pharma (P) Ltd., which held that an offense u/s 138 could still be made out even if the cheque is dishonored due to stop-payment instructions, provided the presumption u/s 139 is not rebutted by the accused.3. Service of notice:The petitioners argued that there was no evidence of service of the statutory notice on them. The court noted that the respondent had issued the notice dated 18.9.2008 under registered cover and UPC, which were not returned. The court held that there is a presumption of delivery of notice within a reasonable time after posting on the correct address, and the respondent had prima facie fulfilled the requirements of Sections 138 and 141 of the Act.4. Responsibility and liability of the Managing Director:The petitioners contended that there were no specific averments in the complaint that petitioner No. 2, the Managing Director, was in charge of and responsible for the conduct of the company's business. The court referred to several precedents, including S.M.S Pharmaceuticals Ltd. v. Neeta Bhalla, which emphasized the need for specific averments. The court found that the complaint did contain sufficient averments that petitioner No. 2 was managing the day-to-day affairs of the company and was the authorized signatory of the cheque, thereby making him liable u/s 141 of the Act.Conclusion:The court dismissed the petition, holding that the complaint and the summoning order were valid. The interim order dated 10.1.2012 was vacated, and the parties were directed to appear before the trial court on 10.9.2012.
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