Tag: Section 138 NI Act

Supreme Court Reinstates Conviction in Cheque Bounce Case, Slams High Court’s Interference
21Nov By The Legal ChamberNo Comments
Supreme Court

Supreme Court Reinstates Conviction in Cheque Bounce Case, Slams High Court’s Interference

This Supreme Court judgment reinforces the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, which arise upon admission of a cheque's execution. It clarifies that these presumptions are rebuttable, but the initial onus is on the accused. The ruling also establishes that a violation of Section 269SS of the Income Tax Act, 1961, does not render a debt legally unenforceable for proceedings under Section 138 of the NI Act. Facts Of The Case: The case originated from a complaint under Section 138 of the Negotiable Instruments Act, 1881, filed by the appellant, Sanjabij Tari, concerning a cheque for Rs. 6,00,000 issued by the respondent, Kishore S. Borcar. The cheque was dishonoured due to insufficient funds. The appellant contended that the amoun...
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Supreme Court Quashes FIR in Land Dispute, Decries Criminalization of Civil Disputes
15Nov By The Legal ChamberNo Comments
Supreme Court

Supreme Court Quashes FIR in Land Dispute, Decries Criminalization of Civil Disputes

The Supreme Court reiterated that criminal proceedings which are manifestly mala fide or constitute an abuse of the legal process are liable to be quashed under Section 482 of the Cr.P.C. It emphasized that criminal law cannot be invoked to settle purely civil disputes or for wreaking vengeance, applying the principles established in State of Haryana v. Bhajan Lal. The Court allowed the appeal and quashed the FIR and charge sheet. Facts Of The Case: The appellant, Anukul Singh, became embroiled in a criminal prosecution originating from a property dispute. His father had purchased a piece of land, and after objecting to the performance of Qurbani (animal sacrifice) on it, the appellant alleged harassment from local authorities and the Shaher Imam. Subsequently, eight FIRs were register...
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Supreme Court Quashes FIR in Loan Case, Says Mere Default Doesn’t Make It a Crime
13Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Quashes FIR in Loan Case, Says Mere Default Doesn’t Make It a Crime

The Supreme Court held that a loan transaction creates a debtor-creditor relationship, and a mere breach of its terms does not automatically constitute criminal breach of trust under Section 405 IPC without evidence of dishonest intention. The Court clarified that such disputes, arising from commercial transactions, are primarily civil in nature and a preliminary inquiry is permissible before registering an FIR. Facts Of The Case: The appellant, a director of M/s Benlon India Ltd., availed three loans from the first respondent, Hero Fincorp, for purchasing machinery. While the first two loans were used for the intended purpose, a fire destroyed the plant shortly after the disbursement of the third loan. Consequently, this third loan was converted into an unsecured corporate loan. Benlon ...
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Cheque Issued After Retirement? Supreme Court Says Partner Still Liable Without Proper Notice
1Jun By The Legal ChamberNo Comments
Supreme Court

Cheque Issued After Retirement? Supreme Court Says Partner Still Liable Without Proper Notice

The Supreme Court held that a partner's retirement from a registered firm under the Indian Partnership Act, 1932, requires strict compliance with Section 72—including public notice publication and Registrar of Firms updates—to absolve liability under Section 138 of the Negotiable Instruments Act, 1881. Non-compliance renders retirement legally ineffective. The High Court erred under Section 482 CrPC by deciding factual disputes (e.g., retirement date/liability) prematurely, as these require trial evidence. Signatory status is irrelevant for partner liability under Section 141 NI Act if involvement in firm affairs is alleged. Facts Of The Case: Shivappa Reddy (Appellant) filed a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881, against M/s AVS Constructions (Ac...
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