9O Important Case laws on Negotiable Instruments Act
Compiled By
Kumar Amit Manu
Bihar Judicial Service
Case law
Surinder Singh Deswal @ Col. S.S.
Deswal vs. Virender Gandhi]
Crl.A. No.1936 of 2019
G.J. Raja Vs Tejraj Surana
Criminal Appeal No. 1160 of 2019
[Yogendra Pratap Singh Vs. Savitri
Pandey]
CRIMINAL APPEAL NO.605 OF 2012
Case name: Dayawati v. Yogesh Kumar The Honble Court held that it is legal to
Gosain (Delhi High Court)
CRL.REF.No.1/2016
Case Name: M/s Meters and
Instruments Private Limited & Anr. v.
Kanchan Mehta Criminal APPEAL NO.
1731 OF 2017
Case name- Smt. Asha Baldwa v. Ram
Gopal
Ratio
Sec 148 NI act retrospective in
nature
Section 143A of the Act must,
therefore, be held to be prospective
in nature and confined to cases
where offences were committed
after the introduction of Section
143A, in order to force an accused
to pay such interim compensation.
The Honble Supreme Court held that
cognizance of an offence punishable
under Section 138 of the Negotiable
Instruments Act 1881 cannot be
taken on the basis of a complaint
filed before the expiry of the period
of 15 days stipulated in the notice
required to be served upon the
drawer of the cheque in terms of
Section 138 (c) of Negotiable
Instruments Act 1881.
refer a criminal compoundable case as
one under Section 138 of NI Act to
mediation.
Use of modern technology for speedy
disposal of cases;complete online
filing of case was desired.
That the legislative intention while
making a specific provision of
Cri Misc. (Pet.) Nos. 2726, 2727 ,2728, Company/Firm was that any person
2730/2014 and 64/2015
Case name: Kishan Rao v.
Shankargoud CRIMINAL APPEAL NO.
803 OF 2018
Narendra Vs Balbirsingh (Bombay
High Court):
Criminal Application (Appa.) No. 748 of
2018
Sai Accumulator Industries, Sangamner
Vs. Sethi Brothers, Aurangabad
Sai Accumulator (supra) was delivered
by relying on the judgment of the
Andhra Pradesh High Court in the case
of Amit Desai & Anr. vs. M/s. Shine
Enterprises and Anr. (2016(5) Mh.LJ
936).while the judgment in the case of
Mr. Amit Desai (supra) was already
overruled by the larger Bench of the
Andhra Pradesh High Court vide
judgment given in the case of A.V.
Ramanaiah vs. M. Shekhara (2000
CRI. L.J. 2386)on 31.12.2007.
However, this fact was not brought to
who was not directly responsible or
merely a Director of Company or Firm
could be held guilty for the alleged
offence, only if he had committed
offence with the consent of such
person.
1)Scope of Revisional Jurisdiction of
High Court- That the Honble High
Court in exercise of revisional
jurisdiction shall not interfere with the
order of the Magistrate unless it is
perverse or wholly unreasonable or
there is non-consideration of any
relevant material, the order cannot be
set aside merely on the ground that
another view is possible.
Section 138 of the N.I. Act is a penal
provision, the commission of which
entails prosecution and conviction on
proving of guilt. Once the offence
under Section 138 of the N.I. Act is
completed, the prosecution can be
initiated for bringing the offender to
penal liability.Bar of sec 69(2) applies
only to a suit.
the Single Bench of this Court took a
view that the complaint filed by an
unregistered firm under Section 138 of
the Negotiable Instrument Act, 1888
(in short “N.I. Act”) is not tenable in
law in view of the bar under Section
69(2) of the Indian Partnership Act,
1932 (in short
****************************************
***Note-the case is no longer a good
law.
the notice of the court hearing the
case of Sai Accumulator (supra).
Case name: Kishan Rao v.
Shankargoud CRIMINAL APPEAL NO.
803 OF 2018(Same Verdict as above)
Geekay Exim (India) Ltd. v. State of
Gujarat (1998) 94 Comp Cas 516
K. Subramani v. K. Damodara Naidu,
(2015) 1 SCC 99
Shriram Transport Finance Co. Ltd. v.
Mahadevaiah, Laws (KAR) 2015 – 7 –
279
John K. Abraham v. Simon C. Abraham, Complainant not sure as to who wrote
(2014) 2 SCC 236
. Aneeta Hada v. Godfather Travels &
Tours Pvt. Ltd., AIR 2012 SC 2795
Kumar Exports v. Sharma Carpets,
2)Presumption u/ Section 139 of NI
Act– While referring to the case of
Kumar Exports vs. Sharma Carpets,
the Honble Supreme Court held that
the accused may adduce evidence to
rebut the presumption, but mere denial
regarding existence of debt shall not
serve any purpose.
Mens rea not open to presumption-
event though mens rea is not an
essential condition specified in Section
138, such element may be presumed
to have existed only on the basis of
facts and circumstances of each case.
If the complainant fails to prove the
legally recoverable debt payable by the
accused, then the acquittal of the
accused is proper.
Presumption contained in Section 139
of N. I., Act is a rebuttable one. It can
be rebutted either by direct evidence
or by the attendant circumstances.
The complainant has to prove that the
cheque which bounced was issued for
discharging the debtor legal liability in
whole or in part.
cheque nor aware as to when and
where the existing transaction took
place for which cheque was issued by
the accused – Conviction of accused is
not proper
The concept of corporate criminal
liability is attracted to a corporation
and company and it is so luminescent
from the language employed under
Section 141 of the Act.
Rebuttal against presumption under
(2009) 2 SCC 513
Hiten P. Dalal v. Bratindranath
Banerjee; AIR 2001 SC 3897
MSR Leathers v. S. Palaniappan,
(2013) 1 SCC 177.
Meters and Instruments (P) Ltd. v.
Kanchan Mehta, (2018) 1 SCC 560.
Sections 118 and 139 of the Act can be
done by preponderance of probability
and test of proving case beyond
reasonable doubt is not applicable.
The presumptions under Sections
118(a) and 139 have to be compulsorily
raised as soon as the execution of
cheque by accused is admitted or
proved by the complainant and
thereafter burden is shifted to accused
to prove otherwise. These
presumptions shall be rebutted only
when the contrary is proved by the
accused, that is, the cheque was not
issued for consideration and in
discharge of any debt or liability etc. A
presumption is not in itself evidence
but only makes a prima facie case for a
party for whose benefit it exists.Similar
Ruling in Rangappa v. Sri Mohan,
(2010) 11 SCC 441.
It is only upon the satisfaction of all the
three conditions mentioned above and
enumerated under the proviso to
Section 138 as clauses (a), (b) and (c)
thereof that an offence under Section
138 can be said to have been
committed by the person issuing the
cheque,
The sentence prescribed under
Section 138 is up to two years or with
fine which may extend to twice the
amount or with both. What needs to be
noted is the fact that power under
Section 357(3) CrPC to direct payment
of compensation is in addition to the
said prescribed sentence, if sentence
of fine is not imposed. The direction to
pay compensation can be enforced by
default sentence under Section 64 IPC

Meters and Instruments (P) Ltd. v.
Kanchan Mehta, (2018) 1 SCC 560.
Nanda v. Nandkishor, 2010 SCC
OnLine Bom 54.
ICDS Ltd. v. Beena Shabeer, (2002) 6
SCC 426.
Dashrath Rupsingh Rathod v. State of
Maharashtra, (2014) 9 SCC 129.
MSR Leathers v. S. Palaniappan,
(2013) 1 SCC 177.
MMTC Ltd. v. Medchl Chemicals and
and by recovery procedure prescribed
under Section 431 CrPC
Though compounding requires
consent of both parties, even in
absence of such consent, the court, in
the interests of justice, on being
satisfied that the complainant has
been duly compensated, can in its
discretion close the proceedings and
discharge the accused,
Explanation to Section 138 is
abundantly clear that the dishonoured
cheque must have been received by
the complainant against a “legally
enforceable debt or liability”,
Liability of a guarantor
The words “any cheque” and “other
liablity” in Section 138 clarifies the
legislative intent. If the cheque is given
towards any liability which may have
been incurred even by someone else
(such as in a case of a guarantor), the
person who draws the cheque is liable
for prosecution in case of dishonour of
the cheque.
Mens rea not required for offence
under S. 138
Can a case be filed if the cheque is
presented for encashment more than
once?
The holder or payee of the cheque may
present the cheque for encashment on
any number of occasions within the
period of its validity [three months
from the date of issue]. A dishonour,
whether based on a second or any
successive presentation of a cheque
for encashment, would be a dishonour
within the meaning of Section 138.
Stop payment attracts sec 138.
Pharma (P) Ltd., (2002) 1 SCC 234.
Goaplast (P) Ltd. v. Chico Ursula
DʼSouza, (2003) 3 SCC 232.
NEPC Micon Ltd. v. Magma Leasing
Ltd., (1999) 4 SCC 253.
Laxmi Dyechem v. State of Gujarat,
(2012) 13 SCC 375.
C.C. Alavi Haji v. Palapetty
Muhammed, (2007) 6 SCC 555.
N. Parameswaran Unni v. G. Kannan,
(2017) 5 SCC 737.
N. Parameswaran Unni v. G. Kannan,
(2017) 5 SCC 737.
sec 138 attracts Cheques issued post
dated.
Account closed attracts sec 138
Signature mis match attracts sec 138
When the notice is sent by registered
post by correctly addressing the
drawer of the cheque, the mandatory
requirement of issue of notice in terms
of clause (b) of proviso to Section 138
of the Act stands complied with. It is
needless to emphasise that the
complaint must contain basic facts
regarding the mode and manner of the
issuance of notice to the drawer of the
cheque
Presumption as to service of Notice
It is clear from Section 27 of the
General Clauses Act, 1897 and Section
114 of the Evidence Act, 1872 that
once notice is sent by registered post
by correctly addressing to the drawer
of the cheque, the service of notice is
deemed to have been effected.
However, the drawer is at liberty to
rebut this presumption
What if addressee refuses to receive
Notice......
The Honble Supreme Court in a
catena of cases has held that when a
notice is sent by registered post and is
returned with postal endorsement
“refused” or “not available in the
house” or “house locked” or “shop
closed” or “addressee not in station”
or “intimation served, addressee
absent”, due service has to be
presumed,
Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197.
Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197.
Basalingappa v. Mudibassapa, 2019
SCC OnLine SC 491.
Basalingappa v. Mudibassapa, 2019
SCC OnLine SC 491.
Anil Hada v. Indian Acrylic Ltd., (2000)
1 SCC 1.
Case of a blank cheque
If a signed blank cheque is voluntarily
handed over to a payee, towards some
payment, the payee may fill up the
amount and other particulars. This in
itself would not invalidate the cheque.
The onus would still be on the accused
to prove that the cheque was not in
discharge of a debt or liability by
adducing evidence. It is immaterial
that the cheque may have been filled in
by any person other than the drawer, if
the cheque is duly signed by the
drawer
The existence of a fiduciary
relationship between the payee of a
cheque and its drawer, would not
disentitle the payee to the benefit of
the presumption under Section 139, in
the absence of evidence of exercise of
undue influence or coercion.
Not necessary for accused to appear
in witness box for rebuttal
It is not necessary for the accused to
come in the witness box in support of
his defence. Section 139 imposes an
evidentiary burden and not a
persuasive burden
Complainant to prove financial
capacity if disputed by accused
It is incumbent upon the complainant
to prove his financial capacity to
extend the loan in question, if the
accused disputes the same
Three categories of persons can be
discerned from Section 141 who are
brought within the purview of the
penal liability through the legal fiction
envisaged in the section. They are: (1)
the company which committed the

SMS Pharmaceuticals Ltd. v. Neeta
Bhalla, (2005) 8 SCC 89.
National Small Industries Corpn. Ltd. v. A director of a company who was not
Harmeet Singh Paintal, (2010) 3 SCC
330.
Aneeta Hada v. Godfather Travels &
Tours (P) Ltd., (2012) 5 SCC 661.
SMS Pharmaceuticals Ltd. v. Neeta
Bhalla, (2005) 8 SCC 89.
offence, (2) everyone who was in
charge of and was responsible for the
business of the company, and (3) any
other person who is a director or a
manager or a secretary or officer of
the company, with whose connivance
or due to whose neglect the company
has committed the offence,
Section 141 extends criminal liability
on account of dishonor of cheque in
case of a company to every person
who at the time of the offence, was in
charge of, and was responsible for the
conduct of the business of the
company. By a deeming provision
contained in Section 141, such a
person is vicariously liable to be held
guilty for the offence under Section
138 and punished accordingly,
in charge of and was not responsible
for the conduct of the business of the
company at the relevant time, will not
be liable for a criminal offence under
the provisions,
The commission of offence by the
company is an express condition
precedent to attract the vicarious
liability of others. For maintaining the
prosecution under Section 141 of the
Act, arraigning of a company as an
accused is imperative
Specific averments against the
Managing Director or Joint Managing
Director are not required to be made in
the complaint. By virtue of the office
they hold as Managing Director or
Joint Managing Director, these
persons are in charge of and
responsible for the conduct of

Katta Sujatha v. Fertilizers & Chemicals Partner of a firm is liable to be
Travancore Ltd., (2002) 7 SCC 655.
M Abbas Hajivs vs T.N Channakeshava
(Criminal Appeal No. 664 of 2012)
M/S SHREE DANESHWARI TRADERS
VS
SANJAY JAIN AND others
Criminal Appeal 61-62 of 2011
business of the company. Therefore,
they get covered under Section 141. So
far as the signatory of a cheque which
is dishonoured is concerned, he is
clearly responsible for the
incriminating act and will be covered
under sub-section (2) of Section 141
convicted for an offence committed by
the firm if he was in charge of and was
responsible to the firm for the conduct
of the business of the firm or if it is
proved that the offence was
committed with the consent or
connivance of, or was attributable to
any neglect on the part of the partner
concerned.
while allowing the application filed
by the legal heirs to prosecute an
appeal filed by the deceased
accused, the bench comprising
Honble (Justice Deepak Gupta and
Justice Aniruddha Bose )observed:
The legal heirs, in such a case, are
neither liable to pay the fine or to
undergo imprisonment. However,
they have a right to challenge the
conviction of their predecessor only
for the purpose that he was not
guilty of any offence. We have,
therefore, allowed the application
filed by the legal heirs to prosecute
this appeal.Legal heirs of deceased
convict can challenge conviction.
That evidence adduced by the
Complainant in a Cheque bounce
case (under Section 138 Negotiable
Instruments Act) to raise statutory
presumption under Section 139

CRIMINAL APPEAL NO. 1210 OF
2019
(Arising out of SLP(Crl) No.
4692/2019)
RITESH AJMERA .. APPELLANT(S)
VERSUS
DAINIK BHASKAR AND ORS. ..
Geemol Joseph v. Kousthabhan,
Justice R. Narayana Pisharadi
(CRL.A.No.2535 of 2008)
Ms M Mallika vs Kasi Pillai
(S.A. No. 740 of 2015)
Christopher Raj vs. K Vijayakumar
(CRIMINAL APPEAL NOS. 986-987
OF 2019 )
[Rohitbhai Jivanlal Patel vs. State of
Gujarat]
CRIMINAL APPEAL NO. 508 OF 2019
cannot be discarded merely on the
ground that there were no such
averments in the complaint.
There is no necessity of imposing
cost when the parties to a cheque
bounce case have amicably settled
the matter at the stage of issuance
of summons itself, the Honble
Supreme Court has reiterated.
The Honble Kerala High Court has
held that when there is an alteration
in the cheque with regard to the
name of the payee, the burden is
upon the complainant to prove that
such alteration was made by the
accused himself or that it was made
with the consent of the accused.
When the amount is written in two
different inks in a Negotiable
Instrument, it amounts to material
alteration, which renders it void in
accordance with Section 87 of the
Negotiable Instrument Act, the
Honble Madras High Court has held.
The Honble Supreme Court has
observed, the High Court, in a
criminal appeal on conviction under
sec 138 N.I act,cannot reverse the
acquittal without affording any
opportunity of hearing to the
accused or by appointing an amicus
curiae to argue the matter on his
behalf if he does not enter
appearance.
The Honble Supreme Court has held
that once the court has drawn
presumption of existence of legally
enforceable debt as per Section 139
of the Negotiable Instruments Act,
 factors like source of funds are not
relevant if the accused has not been
able to rebut the presumption.
[Basalingappa vs. Muudibasappa] The Honble Supreme Court has
CRIMINAL APPEAL NO.636 of 2019 observed that a complainant in a
cheque bounce case is bound to
explain his financial capacity, when
the same is questioned by the
accused, by leading evidence to that
effect.
Bir Singh vs. Mukesh Kumar The Honble Supreme Court has held
CRIMINAL APPEAL NOS.230-231 OF that subsequent filling in of an
2019 unfilled signed cheque is not an
alteration and even a blank cheque
leaf, voluntarily signed and handed
over by the accused, which is
towards some payment, would
attract presumption under Section
139 of the Negotiable Instruments
Act, in the absence of any cogent
evidence to show that the cheque
was not issued in discharge of a
debt.
Ripudaman Singh vs. Balkrishna] The Honble Supreme Court has
CRIMINAL APPEAL NO. 483 OF 2019 observed that a complaint under
Section 138 of the Negotiable
Instruments Act is maintainable
when there is dishonour of cheques
issued under and in pursuance of
the agreement to sell.
[ Sicagen India Ltd vs. Mahindra Cheque-Bounce-Complaint Based
Vadineni ] On Second Notice Maintainable
CRIMINAL APPEAL Nos. 26-27 OF
2019
AR Radha Krishna vs. Dasari The Honble Supreme Court has
Deepthi] CRIMINAL APPEAL Nos. reiterated that, a 'cheque bounce'
403405 OF 2019 complaint against a Company and its
Director, must contain a specific
averment that the Director was in
charge of, and responsible for, the

B. Sunitha vs. State of Telengana]
CRIMINAL APPEAL NO. 2068 OF
2017
Kumaran vs. State of Kerala]
Criminal Appeal Nos. 896-897 of
2017
[N Parameswaran Unni vs G Kannan] The Honble Supreme Court, held
Criminal Appeal No 455 of 2006]
[N. Harihara Krishnan vs. J.
Thomas]
CRIMINAL APPEAL NO. 1534 OF
conduct of the company's business
at the time when the offence under
Section 138/141 of Negotiable
Instruments Act was committed.
The Honble Supreme Court, in this
case held that, that a fee amount
claim by a lawyer based on
percentage of subject matter in
litigation cannot be the basis of a
complaint under Section 138 of the
Negotiable Instruments Act.
It said that such a claim made by
lawyer based on a share in the
subject matter is a professional
misconduct and the proceedings in
the complaint filed by him have to be
held to be abuse of the process of
law and have to be quashed.
The Honble Supreme Court held that
compensation under sec 357 crpf
ordered by the court would be
recoverable even though a default
sentence has been suffered. A
bench comprising Justice RF
Nariman and Justice Navin Sinha
upheld a Kerala High Court decision
that had approved the order of
magistrate by invoking Section 421
CrPC issuing a distress warrant
against the accused for realising
compensation ordered in a cheque
bounce case but for different
reasoning.
that a reminder notice to the drawer
of the cheque cannot be construed
as an admission of non-service of
the first notice by the complainant.
The Honble Supreme Court held
that the offence under Section 138
CRIMINAL APPEAL NO. 1534 OF
2017
K. Bhaskaran vs. Shankaran 2000 (1)
Mh.L.J. 193
Saket India Ltd. vs. India Securities
Ltd. AIR 1999, SC 1090
Central Bank of India vs. Saxena
Pharma, AIR 1999 SC 3607.)
of Negotiable Instruments Act is
person specific. It was also clarified
that the general concept under
Cr.P.C that cognizance was taken
against the offence and not against
the offender was not appropriate in
prosecution under NI Act?Because it
is already held by this Court that
failure to comply with any one of the
steps contemplated under Section
138 would not provide “cause of
action for prosecution”. As such
Petition under 319 crpc not
maintaiable.
The Honble apex court in case of K.
Bhaskaran vs. Shankaran 2000 (1)
Mh.L.J. 193 observed that giving
notice is not the same as receipt of
notice. Giving is a process of which
receipt is accomplishment. It is for the
payee to perform formal process by
sending notice to the drawer at correct
address...... the payee can send notice
for doing his part of giving the notice.
Once it is dispatched, his part is over
and next depends on what sendee
does
The Hon'ble Supreme Court in case of
Saket India Ltd. vs. India Securities
Ltd. AIR 1999, SC 1090 held that the
period of one month is to be reckoned
according to British Calender as
defined in the General Clauses Act and
the date on which cause of action
arose must be excluded for this
purpose.
When neither postal acknowledgement
nor postal cover is received back by
payee the presumption is that notice is
served.
Indian Bank Association and others vs. Metropolitan Magistrate/ Judicial
Union of India & others reported in AIR Magistrate (MM/JM), on the day when
2014 Supreme Court 2528
( Kadir vs. Dattatraya 2005 (3) Mh L.J.
1076 )
Revi Selval vs. Navin 2000 (2) Bombay
Cri. Cases, 23.
Smt. Dropadi @ Maya Shippi vs. State
of Rajasthan 2000(3) Crimes 6045.
Ramnarayan Madanlal Khandelwar vs.
Proprietor Daulat Enterprise, 2005 (4)
Mh L.J. 796)
Hinten Sagar and another vs. IMC Ltd.
And another 2001 (3) Mh L.J. 659)”
( Suman Shetty vs. Ajay A. Chudiwal
AIR 2000 (SC) 828
Charashni Kumar Talwani vs. M/s.
Malhotra Poultries 2014 Cr.L.J. 2908 )
SIL Import, USA v. Exim Aides Silk
Exporters (1999) 4 SCC 567
Central Bank of India v. Saxons Farms
the complaint under Section 138 of the
Act is presented, shall scrutinize the
complaint and, if the complaint is
accompanied by the affidavit, and the
affidavit and the documents, if any, are
found to be in order, take cognizance
and direct issuance of summons.
Cheque to pay time barred debt is
enforceable by virtue of section 25 (3)
of Contract Act
Legal heirs of complainant can
continue the complaint.
legal representatives of accused
cannot be made to face trial.
Part payment made does not absolve
to the drawer from liability.
“Any liability does not include any
other's liability unless there is
agreement between drawer and
original debtor
Demanding cheque amount interest,
damages, separately in the notice
would not invalidate the notice.
A single complaint in respect of
dishonoured cheques is maintenable
though consolidated single notice is
sent and single complaint is
maintenable
The delivery of notice through Fax was
acknowledged. It was observed that
the date of delivery of fax message
cannot be ignored for the purposes of
computing the period of limitation and
accrual of the cause of action.
Notice must show that there was
(1999) 8 SCC 221
1)P.K. Choudhury v. Commander, 48
BRTF (GREF), (2008) 13 SCC 229
2)State of Maharashtra v.
Sharadchandra Vinayak Dongre
[(1995) 1 SCC 42
Mandvi Co. Op. Bank Ltd. v. Nimesh B.
Thakore [(2010) 2 SCC (Cri.) 1]
Radhey Shyam Garg v. Naresh Kumar
Gupta [(2009) 13 SCC 201],
Indra Kumar Patodia v. Reliance
Industries Ltd. [AIR 2013 SC 426]
demand.
For condoning delay in filing a
complaint beyond the period of
limitation, natural justice warrants
notice to the accused so as to grant
him an opportunity to show that the
delay should not be condoned.
The exception engrafted in section 142
serves as a safeguard against false
and frivolous complaints and, thus,
eliminates the need to hold a
preliminary enquiry contemplated by
section 202 CrPC.Thus Inquiry under
section 202, CrPC is Not required, if
the Accused Resides Beyond the
Jurisdiction of the Court under N.I
act.N.I Act carves an exception to
crpc.
The words "examine any person giving
evidence on affidavit as to the facts
contained therein, in the event, the
deponent is summoned by the court in
terms of Sub-section (2) of Section
145 of the Act", in our opinion, would
mean for the purpose of cross-
examination. The provision seeks to
attend a salutary purpose.”Thus the
Evidence on Affidavit under section
145, N.I. Act constitute a legal
evidence and the deponent do not
need to have to Appear for
Examination in Chief Again.
The Legislature has made it clear that
wherever it required a written
document to be signed, it should be
mentioned specifically in the section
itself, which is missing both from
Section 2(d) as well as Section
142.”Hence if signature of complainant

S.R. Sukumar vs. S.Sunaad Raghuram
reported in AIR 2015 SC 2757
A.C. Narayanan v. State of
Maharashtra and Another reported in
AIR 2014 SC 630.
M/S Haryana State Co.Op. Supply and
Marketing Federation Ltd. v. M/S
Jayam Textiles AIR 2014 SC 1926
A.C. Narayanan and Anr. v. State of
Maharashtra and Ors reported in AIR
2014 SC 630
is left on complaint will not make the
proceedings void.
Amendment of Complaint is
Permissible provided amendment
sought to be made relates to a simple
infirmity which is curable by means of
a formal amendment and by allowing
such amendment, no prejudice could
be caused to the other side,
notwithstanding the fact that there is
no enabling provision in the Criminal
Procedure Code
A valid criminal prosecution can be
launched under section 138 of N.I. Act
with the aid of power of attorney .
Note-In view of Sections 9, 12(a),
12(b), 18 and 19 of the Partnership Act,
1932, a single partner can also grant
attorney to file a case.
The dismissal of the complaint for
mere failure to produce authorization
(resolution of board of Directors)
would not be proper and an
opportunity ought to be granted to
produce and prove the authorization.
1)Sub delegation of functions vis a vis
filing of a complaint is only permissible
when the same is duly and explicitly
mentioned in the authority granted to
the delegator.
2)Power of Attorney holder or legal
representative(s) should have
knowledge about the transaction in
question so as to able to bring on
record the truth of the grievance/
offence. It has been further clarified
that there is no reason as to why the
attorney holder cannot depose as a
witness. Nevertheless, an explicit

J.V. Bahurani v. State of Gujarat
(2014) 10 SCC 494,
M/S. Meters and Instruments Pvt. Ltd.
& ANR. Vs. Kanchan Mehta. [Criminal
Appeal No. 1731 of 2017]
Aparna A. Shah v. Sheth Developers
Private Limited and Another reported
in (2013) 8 SCC 71
Aneeta Hada v. Godfather Travels &
Tours Private Limited [(2012) 5 SCC
661]
assertion as to the knowledge of the
Power of Attorney holder about the
transaction in question must be
specified in the complaint.
Magistrate, initially, should try the
case 'summarily' if he is of the opinion
that he is not going to pass sentence
of imprisonment not exceeding one
year and fine of Rs. 5,000/..But during
course of trial if Court thinks such
punishment is not enough he can order
to try the case as summons trial and
for that purpose the Magistrate can
also recall any witness who has been
examined and proceed to hear or
rehear the case. So, the second
proviso to sub-section (1) of Section
143 gives discretion to the Magistrate
to conduct the case other than in
summary manner.
If complainant do not consent to
compounding but accused ready to
make payment ,even in absence of
such consent, the Court, in the
interests of justice, on being satisfied
that the complainant has been duly
compensated, can in its discretion
close the proceedings and discharge
the accused.
If the dishonoured cheque has been
issued out of a joint account and only
one of the account holders has signed
it,each and every joint account holder
cannot be prosecuted unless he has
signed the cheque.
The prosecution launched against the
directors without joining the company
(or against the partners of the
partnership firm, without joining the
partnership firm) cannot be

Kusum Ingots and Alloys Ltd. –Vs-
Penner Peterson Securities Ltd. (2000) which Winding Up Proceedings have
2 SCC 745
maintainable.
Company is liable even in respect of
been Initiated.A company,
therefore,cannot escape the penal
liability for dishonour of cheque under
section 138, N.I. Act on the ground
that the payment of the cheque
pursuant to issuance of notice would
amount to disposition of property of
company and, hence, void under
section 536 (2) of the Companies Act.

John K. Abraham v. Simon C. Abraham To invoke presumption under sections

& Anr. reported in (2014) 2 SCC 236 118 and 139 of the Act, the burden is
cast heavily upon the complainant to
show that he had the requisite funds
for advancing the money to the
accused.

I.C.D.S. Ltd. v. Beena Shabbir & Anr.
reported in AIR 2002 SC 3014
Sampelly Satyanarayana Rao v. Indian
Renewable Energy Development
Agency Limited (2016) 10 SCC 458]
Golden Menthol Export Pvt. Ltd. v.
Sheba Wheels (P) Ltd. reported in
2007 (2) GLJ 211
Golden Menthol Export Pvt. Ltd. v.
Sheba Wheels (P) Ltd. reported in
2007 (2) GLJ 211
Even if the dishonoured cheque in
question was issued as a security
cheque, it will still come under the
ambit of Section 138 of the Act
The Supreme Court has made it
abundantly clear that the culpability
under section 138 of the Act is
extinguished only when the
dishonoured cheque was issued for
the purpose of an advance payment.
Honble Gujrat High Court has held that
proceeding under section 138 N. I. Act
cannot be construed to be an
alternative to a civil suit or any other
proceeding for realization of the
amount remaining unpaid as a debt
following the dishonour of a cheque by
the debtor.
For applicability of sec 319 crpc,all the
rigours laid down in the proviso to
Section 138 must be fulfilled for each

Sasseriyil Joseph v. Devassia in SLP
(Crl.) 1785/2001
Vijay Polymers Pvt. Ltd. & Anr. v.
Vinnay Aggarwal (supra2009 (110)
DRJ 592)
M.V. Nalinakshan V. M. Rameshan
[2009 Cri. L.J 1703
Sivasuriyan versus Thangavelu [2004
(13) SCC 795
Kumaran v. State of Kerala
2017 (7) SCC 471],
R. Mohan v. A.K Vijaya Kumar
(2012) 8 SCC 721]
Travel Agents Association of India
(TAAI) v.. Eastman Travel & Tours (M)
Pvt. Ltd. 2004 CriLJ 2766
Hemant kumar Das vs State of Bihar
Criminal Misc 905 of 2018
individual person.
Cheques issued for a time-barred
debt would not fall within the
definition of 'legally enforceable
debt', which is the essential
requirement for a complaint
under Section 138 of the NI Act.
Honble Kerela High court has held
keeping in view the objective of the act
that it is not expedient to release a
person convicted of the offence under
Section 138 of the Act on probation
under Section 4(1) of the PO Ac.
The only question that arises for
consideration is whether the court can
direct payment of compensation in
exercise of power under sub- section
(3) of Section 357 in a case where fine
already forms a part of the sentence.
Apart from sub-section (3) of Section
357 there is no other provision under
the Code whereunder the court can
exercise such power.
Section 64, IPC makes it clear that
while imposing a sentence of fine, the
court would be competent to include a
default sentence to ensure
compliance.
The complainant does not appear after
closing his evidence in a summons
case, the complaint should not be
dismissed for non- prosecution.
Rather, the Court should pass orders
on the basis of the evidence available
on record. [Also see S. Anand v.
Vasumathi Chandrasekhar reported in
(2008) 4 SCC 67]
There should not be ant F.I.R under
Negotiable Instrument act along with
sec 420 IPC.
Assistant Director of Inspection v. A.B. Violation of Income Tax act under sec
Shanthi, (2002) 6 SCC 259 269SS will not make the debt illegal.

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# Only for reference to Academic purpose and does not guarantee that the cases
mentioned above would not have been overruled.

Thank You
Kumar Amit Manu
Bihar Superior Judicial Service
Labour Judge
Purnea