TaxTMI 
TaxTMI 
2014 (9) TMI 21
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....inal Misc. Application No.9158 of 2007 whereby the High Court of Gujarat quashed the criminal complaint filed by the appellant being Criminal Case No.6076 of 2006 pending on the file of the Chief Judicial Magistrate of Vadodara for offences punishable under Section 138 and 142 of the Negotiable Instruments Act ('the NI Act'). Brief facts of the appellant-Company's case. 3. The appellant in both the appeals is the original complainant. It is a private limited company. Contesting respondent no. 2 in appeal arising out of SLP No. 9915 of 2011 is the accused company and contesting respondent nos. 2 to 4 in appeal arising out of SLP No. 9901 of 2011 are its directors. 4. In the course of its business, the accused received bulk orders from ....
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....Procedure for quashing of the said complaint case. The High Court by the impugned order dated 8/9/2011 allowed the petition and quashed the said complaint. Being aggrieved by the said order the complainant has approached this Court. 8. We have heard Mr. D.N. Ray, learned counsel for the complainant and Mr. Giriraj Subramanium, learned counsel for the accused. Counsel for the complainant submitted that the High Court erred in coming to the conclusion that the complaint does not disclose offence punishable under Section 138 of the NI Act. Counsel submitted that the High Court was wrong in holding that "stop payment" instructions are not covered by Section 138 of the NI Act. The High Court failed to notice authoritative pronouncements of th....
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....d on that count. In Modi Cements v. Kuchil Kumar Nandi (1998) 3 SCC 249 this Court made it clear that even if a cheque is dishonoured because of "stop payment" instructions given to the bank, Section 138 of the NI Act would get attracted. This Court further observed that once the cheque is issued by the drawer a presumption under Section 139 must follow and merely because the drawer issues a notice to the drawee or to the bank for stoppage of the payment it will not preclude an action under Section 138 of the NI Act by the drawee or the holder of the cheques in due course. 11. Again in M.M.T.C. Ltd. and anr. v. Medchl Chemicals and Pharma (P) Ltd. and anr. (2002)1 SCC 234 this Court reiterated the same view. What is more important is the....
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....that "stop payment" instructions were given because the complainant had failed to discharge its obligations as per agreement by not repairing/replacing the damaged UPS system. Whether complainant had failed to discharge its obligations or not could not have been decided by the High Court conclusively at this stage. The High Court was dealing with a petition filed under Section 482 of the Code for quashing the complaint. On factual issue, as to whether the complainant had discharged its obligations or not, the High Court could not have given its final verdict at this stage. It is matter of evidence. This is exactly what this Court said in M.M.T.C. Ltd. Though the High Court referred to M.M.T.C. Ltd., it failed to note the most vital caution ....