TaxTMI 
TaxTMI 
2025 (11) TMI 1085
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....00 filed under Section 138 of the Negotiable Instruments Act, 1881 (In short 'N.I. Act') whereby and whereunder the petitioners herein were convicted for an offence punishable under Section 138 of the NI Act and sentenced to pay a sum of Rs. 6 lacs along with simple interest @ 9% per annum upon the said amount, and in default, convicted to undergo simple imprisonment for three (03) months and the amount of fine imposed is to be paid within a period of two (02) months from the date of judgment. FACTS OF THE CASE 3. Brief facts of the present case, in hand, are relevant for the purpose of disposal of this case are as follows: a. The petitioner no. 1 is a company duly incorporated under the Companies Act, 1956, and presently governed under the Companies Act, 2013. The petitioner no. 2 is one of the Directors of the said Petitioner no.1 company. b. The Petitioner no. 1 company was engaged in the manufacture of iron ingots and iron rods. Subsequently, it became a sick industrial unit and was registered with the Board of Industrial and Financial Reconstruction in 2010, following its financial difficulties since 2003. c. The opposite party no. 1 (hereinaft....
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.... between the petitioner no. 1 company and the complainant took place. He further admitted that he could not state whether the complainant had supplied any goods to the petitioners after the year 1999, nor could he mention the exact date of the cheque alleged to have been issued by the petitioners. 5. It was further submitted that PW-1, during his cross-examination, categorically admitted that at the time of filing of the complaint, the complainant company had already converted its status from a limited company to a private limited company. However, no amendment was carried out in the pleadings to reflect this change, and the case proceeded with and was ultimately decided in favour of the old company. It was argued that the failure to amend the name and status of the complainant company rendered the proceedings invalid in law, and both the Trial Court and the Appellate Court erred in not dismissing the complaint on this ground. 6. It was further contended that the petitioners have paid a sum of Rs. 1,00,000/- by a cheque being No. 076782 dated 26.06.1999, and another amounting to Rs. 2,00,000/- was paid by Demand Draft being No. 961562. These payments, however, were not taken ....
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....ubmitted that the issuance of a cheque without sufficient balance in the account and the consequent dishonour of such clearly attracts the provisions of section 138 of the N.I. Act, 1881. A drawer of a dishonoured cheque cannot escape criminal liability under the guise of technicalities when all the statutory ingredients of the offence are fulfilled. 10. Defence has failed to prove its concocted story during the trial regarding payment of Rs. 3,00,000/-. Therefore, the judgments relied upon by the petitioners have no manner of application, so far as the proceedings under Section 138 of the N.I. Act is concerned, and as such, the revisional application is liable to be dismissed. 11. It was further contended that the cheque was issued in the name of the complainant company, and the complaint was validly instituted by the authorised agent of the said company. The subsequent change in the company's name is of no consequence to the criminal proceedings already initiated. The criminal offence was committed by the Petitioners when they refused to pay the cheque amount even after receipt of the demand notice. The Petitioners never disputed the issuance of cheques nor challenged the v....
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....ffence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation. - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability. 15. The N.I. Act w....
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....nce to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a civil court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee." 19. The Hon'ble Supreme Court in the case Indian Bank Association v. Union of India (UOI), Writ Petition (Civil) No. 18 of 2013 decided on 21.04.2014, also observed the following:- "Sections 138 to 142 of the Act were found to be deficient in dealing with the dishonoured cheques. The legislature inserted new Sections 143 to 147 by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 and earlier to this the Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 whereby a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque to encourage the....
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.... it is evident that the opposite party no. 1, being the complainant, filed the complaint under section 138 of the N.I. Act against the Petitioners as detailed herein above, primarily on allegations that the complainant company had supplied iron moulds by two trucks under two separate invoices to the tune of Rs. 2,14,619/- and Rs. 1,81,105/-, respectively, to the petitioner no. 1. Against the said invoices, the petitioners issued one A/C payee cheque bearing No. 076789 drawn on Punjab National Bank, dated 27.10.1999 amounting to Rs. 3,95,724/-. When the said cheque was presented to the bank, it was dishonoured on 22.04.2000, with the endorsement "Insufficient funds". 23. Thereafter, the complainant issued a demand notice dated 02.05.2000 under section 138 of the NI Act, demanding payment of the said sum. The petitioners herein failed to comply with the requisition of the said notice, which led to the filing of the present complaint. The complaint led to pre-summoning evidence and, thereafter, cognizance for the offence punishable under section 138 of the Act was taken against the petitioners. The Petitioners were ordered to be summoned for offence under section 138 of the Act. No....
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....eld that the supervisory and inherent powers are not to be invoked for routine correction of errors or for a re-appraisal of evidence. These powers are meant to keep the subordinate judiciary within the bounds of its authority and to prevent gross injustice arising from illegality, irregularity, or arbitrariness in judicial proceedings. 29. Furthermore, in Amit Kapoor v. Ramesh Chander (2012) 9 SCC 460, particularly paragraphs 12, 13, 20, 27, the Supreme Court reinforced that section 482 of Cr.P.C. cannot be invoked to reassess the credibility of evidence or the correctness of findings. 30. Accordingly, this Court, in the present case, cannot reassess or reappreciate the entire evidence as if sitting in appeal over the Trial Court's findings. Its interference would be warranted only if the petitioners succeed in demonstrating that the impugned judgment suffers from a jurisdictional error, a violation of due process of law, or a patently perverse conclusion unsupported by the record or wholly an abuse of process of law. 31. Coming to the second issue, the contention of the Petitioners that the complaint was not maintainable due to lack of authority is equally untenable. The....