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2014 (9) TMI 21 - SC - Companies LawOffences punishable under Section 138 and 142 of the Negotiable Instruments Act - cheque bounced - Payment stopped by drawer - failure to fulfill the obligation by the drawee - The High Court observed 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. - Held that:- The High Court fell into a grave error when it proceeded to quash the complaint. Even “stop payment” instructions issued to the bank are held to make a person liable for offence punishable under Section 138 of the NI Act in case cheque is dishonoured on that count. In Modi Cements v. Kuchil Kumar Nandi [1998 (3) TMI 632 - SUPREME COURT OF INDIA] 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. 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. - Decided in favor of appellant.
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