TaxTMI 
TaxTMI 
2001 (7) TMI 1178
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....once bounced, was enough to knock off the prosecution based on a second presentation and second bouncing of the cheque. But neither the Trial Court nor the High Court favoured the accused in his endeavour to secure a discharge from the case on the said ground. Thus he has come up with this appeal. 2. Respondent company filed a complaint before the court of a Chief Metropolitan Magistrate against three appellants for the offence under section 138 of the Negotiable Instrument Act, 1881 ('the Act') on the following inter alia, allegations. 3. The third appellant is the Managing Director of the first appellant company of which the second appellant is Vice President. A cheque in a sum of Rs. 50 lacs and another cheque for above Rs. 3 lacs ....
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....ns 433 and 434 of the Companies Act cannot be treated as a notice under section 138 of the Act. Therefore, the contention of learned counsel for the petitioners that notice dated 1-12-1995 should be taken as notice under section 138 of the Act, is unsustainable. In the case on hand, notice under section 138 of the Act was dated 12-3-1996. It is this notice which is in accordance with the provisions of section 138 that proceedings can be set into motion by giving fifteen days' time to comply with the demand and thereafter within one month file a complaint. The period, if calculated from the issue of notice dated 12-3-1996, brings the complaint well within the period of limitation. Therefore, from the facts of the case alleged in the complain....
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.... to secure or compound for it to the reasonable satisfaction of the creditor; (b)if execution or other process issued on a decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (c)if it is proved to the satisfaction of the court that the company is unable to pay its debts and, in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company. (2) The demand referred to in clause (a) of sub-section (1) shall be deemed to have been duly given under the hand of the creditor if it is signed by any agent or legal adviser duly authorised on his behalf, or in the case of a firm, if it is sign....
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....e of launching a prosecution on it. Para 6 of the said decision contains the thrust of the reasoning. After referring to the four factual premises necessary to concatenate into a cause of action M.K. Mukherjee, J., has said thus : "If we were to proceed on the basis of the generic meaning of the term 'cause of action', certainly each of the above facts would constitute a part of the cause of action but then it is significant to note that clause (b) of section 142 gives it a restrictive meaning, in that, it refers to only one fact which will give rise to the cause of action and that is the failure to make the payment within 15 days from the date of the receipt of the notice. The reason behind giving such a restrictive meaning is not far t....