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Indian Laws - Case Laws
Showing 161 to 180 of 953 Records
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2021 (11) TMI 648 - KERALA HIGH COURT
Dishonor of Cheque - respondent accused was acquitted principally on the ground that the company was not properly represented before the court and also on the ground that the complaint could not have been maintained at Kayamkulam - HELD THAT:- It is settled law that in so far as a company is concerned, it is a distinct juristic personality and it can be represented by persons who may be authorised terms of provisions contained in the Articles of Association of the company or in terms of a resolution duly passed by the Board of Directors of the Company. It is clear from a reading of the impugned judgment that the person who executed the power of attorney was not described in any manner to be the person authorised either by the Articles of Association of the company or by a valid resolution to represent the company.
The judgment of this Court in BASHEER M.K. VERSUS STATE OF KERALA AND ORS. [2015 (11) TMI 1853 - KERALA HIGH COURT] also takes the view (though in slightly facts and circumstances) that the power of attorney holder has to clearly establish the delegation of authority to represent the company.
The power of attorney holder representing the company in the proceedings before the court below had failed to establish that he was duly authorised to represent the company. This is because the person who executed the power of attorney himself did not disclose any authority given either by the Articles of Association of the company or by resolution of the company to represent the company - Appeal dismissed.
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2021 (11) TMI 593 - SUPREME COURT
Validity of setting aside the arbitration award in favour of the ONGC - failure to complete supply on time - liability of liquidated damages - time and date of delivery of supply order - delayed supplies even delivery and/or accepted by the purchaser will be treated as supplied/effected after schedule period without prejudice to Failure & Termination Clause or not - extension in delivery period - entitlement to claim damages under Failure & Termination Clause unless purchaser clearly waives his right in writing to recover such damages with the approval of competent authority.
HELD THAT:- The Arbitral Tribunal, at the outset, held that merely having a clause in the contract making time the essence of it would not be determinative; rather, an overall view having regard to all the terms of contract are to be taken into consideration. Further, they noted that contracts containing provision for extension of time or payment of penalty on default would dilute the obligation of timely performance and render the clauses imbuing time as essence of the contract ineffective - On the aspect of liquidated damages, the Arbitral Tribunal held that liquidated damages, which are pre-estimated damages, cannot be granted as there was no breach of contract due to the fact that time was not the essence. Accordingly, the Arbitral Tribunal proceeded to determine the actual damages based on the evidence furnished.
In this case at hand, the challenge of award is based on the fact that the same is against the public policy and patent illegality. Public policy as a ground of challenge has always been met with certain scepticism. The phrase ‘public policy’ does not indicate ‘a catch-all provision’ to challenge awards before an appellate forum on infinite grounds - the ambit of the same is so diversly interpreted that in some cases, the purpose of limiting the Section 34 jurisdiction is lost. This Court’s jurisprudence also shows that Section 34(2)(b) has undergone a lot of churning and continue to evolve. The purpose of Section 34 is to strike a balance between Court’s appellate powers and integrity of the arbitral process.
The main challenge to the award is against the imposition of unliquidated damages, when the matter of fact stood that the contract between parties stipulated for pre-estimated damages (liquidated damages). The concerned contract contained provisions for liquidated damages for breach of contract, particularly breach of deadlines set in the contract. Under Indian Contract law, such liquidated damages are recognized, subject to the same being reasonable - It is now settled that ‘whether time is of the essence in a contract’, has to be culled out from the reading of the entire contract as well as the surrounding circumstances. Merely having an explicit clause may not be sufficient to make time the essence of the contract. As the contract was spread over a long tenure, the intention of the parties to provide for extensions surely reinforces the fact that timely performance was necessary. The fact that such extensions were granted indicates ONGC’s effort to uphold the integrity of the contract instead of repudiating the same.
The Arbitral Tribunal’s interpretation of contractual clauses having extension procedure and imposition of liquidated damages, are good indicators that ‘time was not the essence of the contract’ - The Arbitral Tribunal’s view to impose damages accrued on actual loss basis could be sustained in view of the waiver of liquidated damages and absence of precise language which allows for reimposition of liquidated damages. Such imposition is in line with the 2nd para of Section 55 of the Indian Contract Act - The High Court and District Court strayed beyond the limitation under Section 34 and 37 of the Arbitration Act.
Appeal disposed off.
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2021 (11) TMI 592 - BOMBAY HIGH COURT
Seeking release and the restoration of property attached under Section 83 of the Code of Criminal Procedure, 1973 - whether the right of the Petitioners to seek release of property under Section 85 of Cr.P.C. beyond two years from the date of its attachment stands extinguished? - HELD THAT:- Section 83 of Cr.P.C. empowers the Court, issuing a proclamation under Section 82 to order the attachment of any property movable or immovable or both belonging to the proclaimed person. Subsection 4 of Section 83 provides that if property ordered to be attached is immovable, the attachment be made through Collector of District, either by taking possession or by appointment of receiver or by an order in writing prohibiting the payment of rent on delivery of property to proclaim person or to anyone on his behalf or by all or any of such methods as the Court thinks fit - Soniya had filed an application purportedly under Section 84 and although her claim and objection to attachment, was not entertained, she did not file the suit to establish her rights in the property. Be that as it may, under Section 85(1), if proclaimed person person appears within the time specified in procolamation order, the Court is empowered to make an order to release the property from attachment. If proclaimed person does not appear within the time specified in the proclamation, the property under the attachment shall be at the disposal of the State of Government. Yet property shall not be sold until any claim preferred or objection made under Section 84 has been disposed of under that Section.
Pending attachment under Section 83 of Cr.P.C.; same property was attached before judgment in 2008 in the suit instituted by the Complainant. In the said summary suit, consent terms were filed in October, 2019. Whereafter on 10th October, 2019, the suit was disposed of and consent decree was drawn. Whereafter Registrar of City Civil Court was directed to unseal the property and hand over possession to Dinesh Singh Lakra, director of the Petitioners-Company. Admittedly, the property in question was under attachment of City Civil Court till October, 2019, and thus after drawing the consent decree in October, 2019, application was moved by the Petitioners under Section 85 of Cr.P.C., which they could not have moved in view of order of attachment passed in Civil Suit - the Petitioners were prevented by ‘sufficient cause’ in pursuing the remedy under Section 85 of Cr.P.C. These facts were completely ignored by the learned Metropolitan Magistrate.
The order passed under Section 83 is subject to Sections 84 and 85 of the code. Section 85(3) empowers the Court to decide the application on merits. The underlying scheme and object of attaching property of the absconder is not to punish him, but to compel his appearance and therefore under Section 85 of Cr.P.C., Court is empowered to release and restore the attached property. Thus, although the application is required to be made within a period of two years from the date of attachment, however if made after two, that itself shall not preclude the Court from exercising the jurisdiction under Section 85 of Cr.P.C., if reasonable cause is shown, for not approaching within the given time. If period of two years envisaged under Section 85(3) is construed literally, it shall frustrate the object of the attachment - the Courts are bound to consider the application filed under Section 85(3) on merits by ascertaining, whether notice of proclamation was properly served on the party and whether application filed beyond two years prescribed under the statute is explained with reasonable cause.
Procedure is hand maid of justice. The endeavour of the Court should be to render justice by appropriate interpretation of statute. Therefore if the Court finds that the person could not approached to seek release and restoration of property within two years due to circumstances beyond his control then in such a case propriety rights of such person in the property would not extinguish automatically. Therefore it is held that, Subsection 3 of Section 85 empowers the Court to entertain the application for release and restoration of the property beyond two years from the date of attachment, if such a person proves to the satisfaction of the Court that he was prevented by a sufficient cause, from making an application for release and restoration of the property. Thus, to be stated that two years period referred for lifting the attachment cannot be read literally to say the belated application is not maintainable, even if there is a justifiable cause for not seeking release of raising the attachment after two years.
In this case, the learned Metropolitan Magistrate did not consider the circumstances, which prevented the Petitioners for making the claim under Section 85(3) of Cr.P.C. within a period of two years. In the circumstances and for the reasons stated, the impugned order dated 21st November, 2019 is quashed and set aside and the learned Metropolitan Magistrate, 28th Court, Esplanade, Mumbai, is directed to decide Petitioners’ application on merits - petition allowed.
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2021 (11) TMI 591 - RAJASTHAN HIGH COURT
Smuggling - Opium - quantum of sentence in lieu of default in payment of fine may also be reduced appropriately - occasion to interfere with the sentence awarded to the accused appellants or not - HELD THAT:- This Court need not go into the merits of the case and the conviction recorded by the learned trial court is hereby upheld.
As far as the sentence is concerned, the learned trial court has awarded a total punishment of 15 years RI to each appellant and in default of payment of fine to undergo two years’ RI.
Hon’ble Supreme Court while confirming the conviction of appellant therein reduced the sentence of 15 years to 10 years. Applying the law laid down by Hon’ble Supreme Court in the case of SHAHEJADKHAN MAHEBUBKHAN PATHAN VERSUS STATE OF GUJARAT [2012 (10) TMI 518 - SUPREME COURT] in the facts of this case, as the appellant is a first time offender, the sentence of 15 year as imposed by the learned trial court upon the appellant is hereby reduced to 10 years.
Default sentence in lieu of fine - HELD THAT:- It is evident that the learned trial court has imposed a fine of ₹ 1,50,000/- and in default of which, the learned trial court has imposed two years’ R.I. - in the cases of N.D.P.S. Act, the sentence awarded in default of payment of fine is not akin to the main sentence. It is a penalty which a person incurs on account of non payment of fine. If the sentence is imposed against an offender he must undergo it; unless it is set aside or remitted in part or in whole either in appeal or in revision or in other appropriate judicial proceedings. Thus, the imprisonment ordered in default of payment of fine stands on a different footing.
The conviction recorded by the learned trial court for offence under Section 8/18 of NDPS Act is hereby confirmed. The sentence imposed upon the present appellants to undergo 15 years rigorous imprisonment is hereby reduced to 10 years R.I. The order of payment of fine in the sum of ₹ 1,50,000/- is hereby maintained, however, in the facts and circumstances of the case, the sentence awarded in default of payment of fine i.e. two years’ R.I. is hereby reduced to one year R.I. Since the appellants have already served 11 years 04 months R.I, they may be released forthwith, if not required in any other case.
Appeal disposed off.
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2021 (11) TMI 590 - SUPREME COURT
Seeking grant of anticipatory bail - petitioner found to be absconding - offences punishable under Sections 147, 148, 323, 324, 307, 308, 504 and452 of the Indian Penal Code - non-bailable offence or not - HELD THAT:- The petitioner is charged for the offences punishable under Sections 147, 148, 323, 324, 307, 308, 504 and452 of the Indian Penal Code. The incident is of 05.03.2017. Even the charge-sheet has been filed against the petitioner and other co-accused as far as back on 20.11.2018. Earlier the petitioner moved an application before the High Court to quash the charge-sheet, in exercise of powers under Section482 Cr.P.C. which came to be dismissed by the High Court vide order dated10.12.2019. However, though not permissible the High Court vide order dated10.12.2019 directed that in case the applicant appears and surrenders before the Court within 30 days and applies for bail, his prayer for bail shall beconsidered and for a period of 30 days no coercive steps can be taken against the accused in the aforesaid case. Despite the same and having taken the benefit of the order dated 10.12.2019, the petitioner did not surrender and apply for regular bail. That thereafter non-bailable warrant has been issued against the applicant and even the proceedings under Section 82 of the Cr.P.C. has been initiated.
The petitioner is continuously absconding and not available at home. The submission on behalf of the petitioner that initially he was not named as accused in the FIR is concerned, the same has been dealt with by the Learned trial Court and the Learned trial Court has observed that even in the first FIR one person was shown as unknown. Thus, from the aforesaid it is found that there is a prima facie case found against the petitioner for the aforesaid offences and even the charge-sheet has been filed and the petitioner is found to be absconding. Therefore, this is not a fit case to grant anticipatory bail to the petitioner.
The Court shall not come to the rescue or help the accused who is not cooperating the investigating agency and absconding and against whom not only nonbailable warrant has been issued but also the proclamation under Section 82Cr.P.C. has been issued - Application dismissed.
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2021 (11) TMI 586 - KERALA HIGH COURT
Dishonor of Cheque - service of statutory notice u/s 138B of NI Act - acquittal of accused u/s 255(1) of Cr.P.C. - rebuttal of statutory presumption - HELD THAT:- The documents produced are very relevant to prove the case of the complainant. When the cheque is issued, there is a presumption under Sections 118 and 139 of the Act that it was drawn for consideration. It is settled that when the accused admits the signature in the cheque and takes a plea that it was issued as security, the burden is upon him to establish the same.
The Apex Court in Kalamani Textiles (M/s.) & Another v. P. Balasubramanian [2021 (2) TMI 505 - SUPREME COURT] has held that once signature is established, it is to be presumed that the cheque was issued in consideration for a legally enforceable debt. At any rate, the complainant has chosen to produce the statement of accounts showing the transaction between the complainant and the accused as well as the resolution authorising PW1 to represent the company - this is a fit case where an opportunity has to be granted to the complainant to prove the said documents in order to prove its case. Hence, the impugned judgment is liable to be set aside and the matter is to be remanded to the court below for fresh disposal.
Appeal allowed by way of remand.
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2021 (11) TMI 549 - CALCUTTA HIGH COURT
Enforcement of a foreign Arbitral Award - Scope of inquiry for resisting the enforcement of a foreign award under Section 48 (2)(b) in Part II of The Arbitration and Conciliation Act, 1996 - respondent Award debtor opposes the prayer in the execution case on the ground that the enforcement would be contrary to the public policy of India, specifically the fundamental policy of Indian law, since enforcing a Put Option available to the petitioner violates The Foreign Exchange Management Act, 1999 and the Securities Contracts (Regulation) Act, 1956 - HELD THAT:- The Arbitral Tribunal has not only construed the Clauses in the Shareholder’s Agreement in the context of the submissions made by the respondents but has also considered the relevant decisions on each of the issues raised by the parties. On a reading of the Award, it is found that the points raised by counsel for the respondent were argued threadbare before the Tribunal. The decisions cited in support of such submissions were also extensively relied on and considered and distinguished by the Tribunal. This court was unable to find any issue which was raised on behalf of the respondent before the Tribunal but was not considered or analyzed by the Tribunal.
For an Arbitral Award as complete and comprehensive as the one under consideration, any further inquiry into the transaction documents or the construction of the relevant clauses therein or the events culminating in the dispute or even the provisions of the SCRA or the FEMA would amount to an exercise which has precisely been taken out of the present statutory framework - The subtle distinction between the ‘enforcement’ of an award being put to the test in Section 48 as opposed to the ‘Award’ itself having to pass muster under Section 34 further reins in all possible enquiries on the relevant factual matters on the aspect of contravention of fundamental policy of Indian law.
Shorn of any statutory framework the crux of the matter is that the parties had intended, through the agreed terms of the transaction documents, to provide multiple modes of exit to the petitioner in the form of a cascading set of alternatives and to secure the exit by commensurate monetary returns. The exit options were central to the agreement as intended and understood by the parties at the time of execution of the Shareholder’s Agreement and the investment made by the petitioner in the wholly-owned subsidiary of the respondent. The respondent however sought to plug the exit routes when the conditions precedent for the petitioner to exercise its option fructified. The respondent took recourse to SCRA and FEMA to obstruct the petitioner and repeats such objections even now before this court. This is the basic premise of the dispute.
Contrary to the grounds for resisting enforcement of the Foreign Award, this court is of the considered view that the Award in essence is an Award for breach of the obligations of the respondent and its wholly-owned subsidiary. The Arbitral Tribunal found that the failure on the part of the respondent and MSEL to procure a third party purchaser constituted a breach of such obligations with clear consequences as to damages. The Tribunal, accordingly, held that loss of the bargain and the measurement of damages was readily apparent by reference to the value of the Agreements themselves - The Award can therefore also be seen as a money Award simpliciter without having any bearing on the public policy of India in the context of either SCRA or FEMA.
This court is unable to accept the contention of the respondent that the enforcement of the Award should be refused on the grounds urged. In successfully surmounting the grounds for refusing enforcement, the Award is held to be a binding Award and the court is satisfied that the Foreign Award is enforceable under Sections 46, 47 and 49 of the Act. The Award should hence be enforced in accordance with the enabling provisions under Part II of the Act - Petition allowed.
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2021 (11) TMI 548 - MADRAS HIGH COURT
Dishonor of cheque - insufficiency of funds - Legally enforceable debt or not - compounding of offence - HELD THAT:- On going through the cross-examination of D.W. 2, it appears that nothing was suggested on the side of the accused, particularly, about the issuance of the said cheque. In the absence of particular entry in the related document, this Court cannot conclude the case that the alleged cheque was obtained from the petitioner by coercion. Therefore, the stand taken by the accused that the cheque pertains to the case has been obtained in the respondent Police Station, has not been proved by way of examining D.W. 2.
On scrutinizing the said witness with the other facts, it is seen that both the petitioner and the respondent are residing in Musiri, which is situated near to Trichy. All are aware the travel time between Trichy and Musiri is about one hour. Therefore, in the said circumstances, it is possible for the accused that after availing loan in the morning hours, he travelled to Trichy and attended duty at 11.15 a.m. Therefore, the evidence given by D.W. 1 to D.W. 3 may be in support of the defence taken by the accused, in order to substantiate the said evidence, the documents relied on by him are not sufficient to hold that the stand taken by the revision petitioner is genuine one.
Once the signature found in the cheque is admitted, the trial Court ought to have presumed that the cheque was issued for legally enforceable debt.
Without seeing any perversity or gross injustice in the judgments rendered by the trial Court and the first appellate Court, this Court cannot interfere with the findings rendered by the Courts below - Since the prosecution under Section 138 of the Negotiable Instruments Act is quasi civil in nature, the Parliament has thought it fit to permit compounding of the offence under Section 147 of the Negotiable Instruments Act.
Instead of sending the accused to prison, this Court is of the view that if the accused deposits ₹ 8,00,000/- towards the cheque amount and another sum of ₹ 1,10,500/- as compensation and costs to the credit of C.C. No. 175 of 2013, before the Judicial Magistrate Court, Musiri, on or before 03.01.2022, the Magistrate shall disburse the amount to the complainant if he is alive or to his legal heirs and compound the offence. If the amount of ₹ 9,10,500/- is not deposited on or before 03.01.2022, the trial Court shall issue warrant of commitment for the accused to undergo the sentence imposed upon him - application disposed off.
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2021 (11) TMI 547 - MADRAS HIGH COURT
Waiver off of fully cash handling charges collected from the stamp vendors by the Bank / SBI - seeking forbearance on Third Respondent from collecting any cash handling charges forthwith from the Petitioners for purchase of stamp papers - private transaction or not - HELD THAT:- The facts and circumstances were elaborately looked into by the Finance Department, as the Government of Tamil Nadu is an account holder in the State Bank of India and Government accounts are operated with privileges considering various factors and baking regulations.
The Government has categorically stated that no cash handling charges have been explicitly provided for Government receipts, which shows that collection of cash handling charges for deposit of cash into Government Account through Treasury Challans has not at all been permitted by the State Bank of India itself. It is, therefore, cash handling charges have been collected by mistake or by misinterpretation of the Circular of the Head Office of the State Bank of India and such collection being made by the Respondent Bank herein is without any authority.
Collection of cash handling charges from the Stamp Vendors by the Third Respondent /Bank, while depositing money into Government Account through Treasury Challans is impermissible.
Perusal of the Master Circulars relied on by the Second and Third Respondents /State Bank of India dated 01.07.2014 and 01.04.2021 reveals that the Second and Third Respondents are unable to establish that there is a direction / instruction / permission granted by the Reserve Bank of India to collect such cash handling charges on Government transactions. In the absence of any such specific direction or instructions from the Reserve Bank of India, the State Bank of India is not entitled to collect any cash handling charges from stamp vendors. Any such collection must be strictly in accordance with the Reserve Bank of India Regulations or in accordance with the Banking Regulations. Such collection of cash handling charges cannot be assumed or collected based on certain inferences. Any such collection must be made only, if there is a specific direction permitting the bank to collect cash handling charges.
On the verification of the Master Circulars relied on by the State Bank of India, issued by the Reserve Bank of India on 01.07.2014 and 01.04.2021, it is seen that both circulars are related to agency commission and there is no specific direction or instruction from the Reserve Bank India. Thus, it is not proper on the part of State Bank of India to collect cash handling charges from the stamp vendors. Accordingly, the Second and Third Respondents have failed to establish that they have the authority to collect cash handling charges from the stamp vendors, who all are depositing money through Treasury Challans for purchase of stamps.
The Collection of cash handling charges from the stamp vendors/petitioners by the 2nd and 3rd respondents are declared as illegal and without any authority. Accordingly, the respondents 2 and 3 are directed, not to collect any cash handling charges from the stamp vendors, while depositing cash in Government accounts through Treasury Challans in any of the branches of the State Bank of India.
Petition allowed.
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2021 (11) TMI 546 - KARNATAKA HIGH COURT
Dishonor of Cheque - petitioner/accused submits that, accused could not of complainant complete the cross examination and also he could not adduce his defence evidence - principles of natural justice - HELD THAT:- In the circumstances of the case, the concept of principles of natural justice would be that, opportunity is to be offered and not that the court shall go on pending opportunity till opportunity is exhausted. It is reasonable that the requisite opportunity provided, it has reasonably utilised. However in the normal aspect of principles of natural justice, one more opportunity may be given to the petitioner/accused to cross examine the complainant and also to adduce his defence evidence before the trial court but not without conditions. Thus, for the purpose of remand, the judgment of the trial court and appellate court in each of the cases deserve to be set aside and the matters deserve to be remanded to the trial court with conditions.
The accused in each of the cases shall deposit 50% of the fine amount before the trial court on or before 30th October 2021 or if any amount is already deposited and in case, if it is less than 50%, the deposit shall be completed to meet the quantum of 50% - Petition allowed.
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2021 (11) TMI 545 - KARNATAKA HIGH COURT
Dishonor of Cheque - existence of legally enforceable debt or not - defense of the accused/revision petitioner is that she had no transaction with the complainant at any point of time and cheque was issued to one Rajiv and in this regard, she has placed reliance on Ex.D1 - rebuttal of statutory presumption - HELD THAT:- The complainant has not disputed the cheque-Ex.P1 and her signature. Hence, statutory presumption under Section 139 of N.I. Act is in favour of the complainant. The accused is required to rebut the statutory presumption by leading the cogent evidence on the basis of preponderance of probability. But, except asserting the transaction between herself and Rajiv, no other documents have been produced by the accused. This transaction does not establish that the said cheque was taken by the complainant and very interestingly, after receipt of the legal notice, the accused has not choosen to reply and no explanation is offered - the cross-examination of D.W. 1 itself disclose that she is already convicted for the offences punishable under Section 138 of N.I. Act in a different case. She has also admitted that Rajiv has also lodged a complaint against her under Section 138 of N.I. Act as per Ex.D10. Hence, the defense raised by the accused is short of proving her case that the cheque has not been issued towards discharge of legally enforceable debt so as to rebut the statutory presumption in favour of complainant.
The other ground urged by the learned counsel that in the complaint there is a specific allegation that an amount of ₹ 5,00,000/- was advanced as a hand loan but in the evidence, it is elicited that it was in respect of payment towards the house warming ceremony, wherein, the complainant has taken contract and he paid the expenses in this regard to labours, but that does not go to the root of the case to suspect the case of the complainant. The accused has not rebutted the presumption available in favour of the complainant.
The accused has not made out any grounds for admitting the revision for hearing on merits. The accused/revision petitioner has already suffered two concurrent findings of conviction in both the Courts below and both the Courts have appreciated the evidence on record in detail and conviction order passed by the trial Court and confirmed by the Appellate Court cannot be said to be erroneous or arbitrary so as to call for any interference by this Court.
Petition dismissed.
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2021 (11) TMI 544 - KERALA HIGH COURT
Dishonor of Cheque - amount to be repaid under the hire purchase agreement - prosecution under Section 138 of the Negotiable Instruments Act - rebuttal of statutory presumption - HELD THAT:- Though the accused had filed an application for sending Ext.P2 cheque to the forensic expert for verifying the signature and handwriting and though that application was allowed by the court, the forensic laboratory had returned the same without comparison and demanding more documents written by the 2nd respondent/ accused during the same period in order to complete the investigation. However, the 2nd respondent/accused did not produce any further document, as a result of which Ext.P2 cheque was not subjected to any forensic examination - The trial court also found that the 2nd respondent/ accused had no case that the appellant/complainant had obtained the cheque from him by unlawful means and had fabricated his signature and handwritting and that no reply was sent by the 2nd respondent/accused to the statutory notice issued by the appellant/complainant.
The trial court, therefore, was of the view that the appellant/complainant was entitled to the benefit of the statutory presumption under Section 139 of the Negotiable Instruments Act and therefore found that Ext.P2 cheque had been issued for discharge of a legally enforceable debt and answered that issue in favour of the appellant/complainant - A reading of the appellate court judgment shows that the appellate court was of the opinion that the signature on the cheque had not been proved to be that of the 2nd respondent/accused herein. In particular, the appellate court noticed that the signatures on Ext.D1, the account opening form and Ext.X1 containing the registration particulars of the vehicle were different from the signature contained in Ext.P2 cheque.
This is a case where the 2nd respondent/accused has not denied the fact that he had entered into a hire purchase agreement with the appellant/complainant. He had also not denied the fact that he had failed to repay the instalments of the loan in time - The trial court on an examination of the signatures on various documents concluded that there was a similarity in the admitted signature and the signature contained in the cheque. Of course, the appellate court has by invoking Section 73 of the Evidence Act come to a different conclusion regarding the similarity in the signatures.
In the facts of the present case, the transaction between the appellant/complainant and the 2nd respondent/accused has not been disputed. The appellate court also found that there was similarity in the signature on the cheque, the hire purchase agreement and in the registration details maintained with the Motor Vehicles Department. That finding by itself is to establish that the statutory presumption under the Negotiable Instruments Act was available to the appellant/complainant. Therefore, the appellate court went wrong in reversing the conviction and sentence imposed on the 2nd respondent/accused.
This appeal is allowed.
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2021 (11) TMI 512 - KERALA HIGH COURT
Dishonor of Cheque - failure to establish the execution of the cheque by the respondent - rebuttal of presumptions under Sections 118 and 139 of the NI Act - HELD THAT:- Whoever be the person handed over the cheque to the complainant the possession of Ext.P1 being with him, and Ext.P1 having been established by the complainant as drawn from the account of the accused maintained with his banker, in view of Section 20 of the N.I.Act, who authored the writings in it, is immaterial. Such being the context, undoubtedly the presumptions under Sections 118 and 139 of N.I.Act and Sections 103 and 114 of the Act would be attracted in favour of the complainant. Presumptions are rebuttable ones and as stated in the provisions, it is the burden of the accused to rebut those or establish to the contrary.
Signature in Ext.P1 is not disputed by the accused. The trial court has found upon evaluation of the evidence and the legal provisions that it is the burden of the accused to adduce cogent evidence to rule out the grab of legal provisions - this Court has no hesitation to hold in the light of the discussions made hereinabove and also on the basis of the dictums of the Apex Court in the cases relied on by the learned counsel for the appellant, the trial court has gone wrong in making observations of the nature.
The burden undoubtedly is on the accused to rebut the presumptions available to the complainant under Sections 118 and 139 N.I.Act. This Court on an appreciation of the entire evidence on record, is convinced that the accused was unsuccessful in discharging his burden to rebut the presumptions. Therefore, the prosecution ought not to have been held by the trial court as failed - the trial court shall restore the complaint back to it's file and dispose it of in accordance with law, within two months from the date of receipt of a certified copy of this judgment.
Appeal allowed.
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2021 (11) TMI 458 - SUPREME COURT
Nature of the award - award arising out of an international commercial arbitration - breach of settlement agreement - Arbitral proceedings and Court proceedings in relation to arbitral proceedings - HELD THAT:- The respondent moved a petition under Section 34 of the said Act on 24.01.2015 before the Bombay High Court as Arbitration Petition No.167/2015, while the appellant filed for execution of the award. Consequently, the respondent also filed for stay of the enforcement of the award. Interim stay was granted on 06.04.2018 and the SLP against the same was dismissed, being SLP No.27085 of 2018. The learned Single Judge of the High Court set aside the award in terms of the judgment dated 19.05.2020. The appeal filed by the respondent under Section 37 of the said Act was dismissed by the Division Bench in terms of the impugned judgment dated 20.04.2021. The High Court also granted interim protection against withdrawal of the amount specified under the Deed of Settlement for a limited period of time.
In the Special Leave Petition while issuing notice on 02.08.2021, the interim arrangement by the High Court was extended and after grant of leave, arguments were concluded on 28.09.2021.
Nature of the award - appellant claims that it is an award arising out of an international commercial arbitration - HELD THAT:- While the plea of the award being vitiated by patent illegality is available for an arbitral award, such an award has to be a purely domestic award, i.e. the plea of patent illegality is not available for an award which arises from international commercial arbitration post the amendment.
Whether the amendment would apply in the facts of the present case? - HELD THAT:- It is not in dispute that the Section 34 proceedings commenced prior to 23.10.2015, which is the crucial date. As to when the amendment would apply is an aspect that is no longer res integra.
The arbitrator’s conclusions are not in accordance with the fundamental policy of Indian law, and can thus be set aside under the pre-2015 interpretation of S. 34 of the said Act. It is also noted that clause 6 of the Deed of Settlement could not have been relied on to award liquidated damages in favour of the appellant, we agree with the observations of the Single Judge and the Division Bench in this regard.
The fault cannot be found with the judgment of the learned Single Judge and the Division Bench to the extent it interferes with the award and sets aside the award - appeal dismissed.
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2021 (11) TMI 457 - SUPREME COURT
Dishonor of Cheque - insufficiency of funds - complaint had not been filed by the payee in terms of Section 142 of the NI Act - rebuttal of presumptions - format of the complaint filed - HELD THAT:- The Managing Director has filed the complaint on behalf of the Company. There could be a format where the Company’s name is described first, suing through the Managing Director but there cannot be a fundamental defect merely because the name of the Managing Director is stated first followed by the post held in the Company.
The description of the complainant with its full registered office address is given at the inception itself except that the Managing Director’s name appears first as acting on behalf of the Company. The affidavit and the cross-examination in respect of the same during trial supports the finding that the complaint had been filed by the Managing Director on behalf of the Company. Thus, the format itself cannot be said to be defective though it may not be perfect. The body of the complaint need not be required to contain anything more in view of what has been set out at the inception coupled with the copy of the Board Resolution.
One of the most material aspects is that the signatures on the cheques were not denied. Neither was it explained by way of an alternative story as to why the duly signed cheques were handed over to the Company. There was no plea of any fraud or misrepresentation. It does, thus, appear that faced with the aforesaid position, the respondent only sought to take a technical plea arising from the format of the complaint to evade his liability. There was no requirement of a loan agreement to be executed separately as any alternative nature of transaction was never stated.
The order of the High Court cannot be sustained and are required to be set aside - the finding is, thus, reached that the complaint was properly instituted and the respondent failed to disclose why he did not meet the financial liability arising to a payee, who is a holder of a cheque in due course.
Appeal allowed.
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2021 (11) TMI 456 - SUPREME COURT
Grant of Interim award - stridhana property of Respondent No. 1 or not - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The Arbitrator had committed an error in deciding the issue relating to 99 diamonds and one emerald ring for the following reasons. As has been rightly held by the High Court, the mandate for the Arbitrator is to decide whether said jewellery is stridhana property of the Respondent No. 1. A plain reading of the terms of reference No.(iii) would indicate the fact that the said jewellery being given to the Appellants in 1971 has been taken note of. Mere handing over of the jewellery to the Appellants in 1971, therefore, cannot be the reason for holding that the Appellants are entitled to retain the jewellery. The Arbitrator has concluded that 99 diamonds and one emerald ring, are in fact, stridhana property of Respondent No.1.
The Arbitrator has committed a jurisdictional error by travelling beyond the terms of reference. Further, the Arbitrator has committed an error in permitting the Appellants to retain the jewellery - the Arbitrator had to decide the entitlement of all the seven parties to equal shares in the event of finding that the jewellery is not stridhana property - the conclusion of the High Court is approved by upholding the impugned judgment.
Appeal dismissed.
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2021 (11) TMI 455 - CALCUTTA HIGH COURT
Dishonor of Cheque - manner in which the loan has been advanced - whether there has been compliance with the loss relating to the Income Tax Act? - HELD THAT:- Learned Appellate Court acted on a letter of the Advocate and interfered with the order of conviction passed by the Learned Trial Court. On the face of it, the Learned Appellate Court unnecessarily gave importance to a G.D. Entry number which was reflected in the notice although the original G.D. Entry was never brought on record. The Appellate Court’s finding on the subject so far as the issue of debt or liability is concerned are not on accepted principles of law so far as the provisions of Negotiable Instruments Act is concerned. The Appellate Court should have been cautious as a belated plea taken by an accused cannot be given undue importance in cases where presumption under Section 118 and 139 of the Negotiable Instruments Act exist.
The manner in which the learned Appellate Court set aside the order of the learned Magistrate calls for interference of this court as the same is against the settled principle of law relating to Negotiable Instruments Act and as such the same is liable to be set aside - Application allowed.
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2021 (11) TMI 454 - TRIPURA HIGH COURT
Dishonor of Cheque - preponderance of probabilities - existence of enforceable debt or not - rebuttal of presumption u/s 118 and Section 139 of the NI Act - HELD THAT:- There is no equivocality. It is not required that the accused shall always advance the evidence to disprove the existence of consideration. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which the complainant relies. For the purpose of rebutting the initial evidential burden, the defendant can rely on the direct evidence or the circumstantial evidence or a presumption of law of fact once such convincing rebuttal evidence is adduced and accepted by the Court.
On overall appreciation of the evidence, this court finds no infirmity in the finding returned by the trial judge that if those two cheques were not in discharge of the liability of the accused person of his debt as stated by the accused person [the respondent] then, why those cheques were issued. The complainant did not mention anything about that episode of issuance of two cheques in his complaint petition or during the examination-in-chief. He did not even explain why those two cheques bearing No.610768 and 610772 were given to him by the accused person. His explanation is fragile and amounts to failure in explaining the episode properly. The respondent [The accused person] has made out a probable case that there was no enforceable debt against him and that he was under no obligation/liability to make payment. It appears more probable that the cheque that has been dishonoured is a security cheque. Therefore, the order of acquittal does not warrant any interference.
Appeal dismissed.
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2021 (11) TMI 453 - RAJASTHAN HIGH COURT
Dishonor of Cheque - appellant failed to produce any relevant document like Bank statement or loan sanction letter to prove that the cheque was issued against the loan taken by the respondent - preponderance of probability - section 138 of NI Act - HELD THAT:- A bare perusal of the impugned judgment clearly reveals that the learned trial court has given the cogent reasoning for acquitting the accused-respondent. It has been concluded by the learned court below that the appellant has failed to prove that the cheque in question was issued by the respondent against the loan sanctioned to him and therefore, if the cheque was dishonoured for want of sufficient funds, the same does not constitute an offence under Section 138 of the Act - it would be hazardous to convict the respondent only on the basis of the presumption under section 139 of the Act in the absence of any material, and which material ordinarily would be expected to be in the complainant's possession and control, to show that loan was in fact disbursed to the accused.
The standard of the proof that is required to probabilise the suggestive case of the accused in a case filed under Section 138 of Negotiable Instruments Act is that the presumption under Section 139 of Negotiable Instruments is as that of statutory presumption, however, the same is rebuttable. The standard of proof that required to shift the burden on the shoulders of the accused is based on the principles of "preponderance of probability" and not on the principle as being examined in the criminal case to prove the guilt of the accused "beyond reasonable doubt".
It is well settled that the proceedings under Section 138 of Negotiable Instruments Act are quasi-criminal in nature. The principles that will apply to acquittal in other criminal cases are not applicable in cases instituted under the Act. The test of proportionality should guide the construction and interpretation of "reverse onus clauses" and the respondent/accused cannot be expected to discharge an unduly high standard of proof. Since the proceedings under Section 138 of the Negotiable Instruments Act are quasi-criminal in nature, it is sufficient enough for the accused to prove the "suggestive case or defence theory" up to the "level of preponderance of probability".
While the presumption is indeed triggered, the presumption is rebuttable. The burden on the accused is to make out a probable defence. The accused need not step into the witness box or adduce direct evidence. It would suffice if the accused is in a position to create a reasonable doubt that the version of the complainant is false. In the factual matrix, the accused has more than succeeded in rebutting the presumption.
Appeal dismissed.
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2021 (11) TMI 452 - DELHI HIGH COURT
Dishonor of Cheque - contention has been raised on behalf of the petitioner that the summoning order was passed without due application of mind - principles of natural justice - HELD THAT:- Considering that the law is settled to the effect that a summoning order need not be a detailed order, the contention raised does not incline this Court to take a view in favor of the petitioner and the same is rejected.
Even in the complaint filed under Section 138 of the Act, the respondent has reiterated that it had fulfilled the service tax obligation in terms of the agreement and the service tax deposit challans were also stated to have been supplied to the petitioner on more than one occasion - it is apparent that the parties have taken conflicting stands on the issue of payment of service tax/statutory dues. The complainant has averred that the dues stand paid, whereas the petitioner has denied the payment of entire dues, despite admitting that certain dues were paid.
There are no ground to entertain the present petition - petition dismissed.
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