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RAMAN KUMAR BHARDWAJ (LAWYER)     13 March 2010

citation required

i have some time back studied a Judgement that the cheque issued in a compromise in the court  and if the same is dishonoured, no offence 138 is made out, inspite of due-dilligance i could not search the same.

 can any body have any Idea.

plz send me the same.



 7 Replies

RK MEHTA (DEPUTY GENERAL MANAGER - LEGAL)     13 March 2010

Sir,

Forget the citation, Let us all follow some honesty and not to take immoral stands for the sake of clients. Pl advise your client to pay the money agreed by him to be paid under the compromise and get the matter compounded in the criminla court.

RAMAN KUMAR BHARDWAJ (LAWYER)     13 March 2010

dear sir

thanks for ur valuable advice, however in my case, the complainant says that the cheque has been issued in the compromise in the court, however the accused says that he never issued any cheque to the complianant who is his eleder brother. The compromise was entered between the two brother in a proeprty suit. however later on the elder brother left the house where he was livivng along with younger brother(Accuse) and as per the acuse ,the complaiant had stolen the entire cheque book and even signed the cheque himself.

So plz take care in future that every compromise is not compromise

rupareliya (advocate)     13 March 2010

HI UR SEARCHIN FOR THIS ONE? 2008 (0) GLHEL-SC 41317 SUPREME COURT OF INDIA (HIGH COURT OF MADHYA PRADESH) Hon'ble Judges:S.B.Sinha and Lokeshwar Singh Panta JJ. Lalit Kumar Sharma Versus State Of Uttar Pradesh CRIMINAL APPEAL No. 818 of 2008 ; *J.Date :- MAY 06, 2008 NEGOTIABLE INSTRUMENTS ACT, 1881 Section - 138 Negotiable Instruments Act, 1881 - S. 138 - application of - dishonour of cheque - complaint against Directors of the Company - second cheque issued in terms of agreement also dishonoured - application for setting aside the order summoning appellants dismissed - appeal against - held, second cheque was issued in terms of the compromise - it did not create a new liability - as the compromise did not fructify, the same cannot be said to have been issued towards payment of debt - there was only one transaction between Directors of the Company and the complainant and they have already been punished - question of entertaining the second complaint did not arise - appeal allowed. Imp.Para: [ 12 ] [ 17 ] Equivalent Citation(s): 2008 (5) SCC 638 : 2008 (7) Scale 561 JUDGEMENT :- S.B.SINHA, J. 1 Leave granted. 2 Application of Sec. 138 of the Negotiable Instruments Act, 1881 (for short "the Act") in the facts and circumstances of the case is involved in this appeal which arises out of a judgment and order dated 19.02.2007 passed by the High Court of Judicature at Allahabad in Criminal Revision No. (5) of 2003. 3 M/s. Mediline India (P) Ltd. is a company registered and incorporated under the Companies Act, 1956. It had two directors, viz., Shri Ashish Narula and Shri Manish Arora. The Company took loan for a sum of Rs. 5,00,000.00. Two cheques bearing Nos. 0989637 dated 30.11.1999 and 0989638 dated 10.12.1999 for Rs. 3,00,000.00 and Rs. 2,00,000.00 respectively were drawn on Vijaya Bank, Navyug Market, Ghaziabad in favour of the respondent No. 1. On presentation, they were returned unpaid with the remarks "insufficient fund". 4 A complaint petition was thereafter filed by the respondent No. 2 (complainant) against Shri Manish Arora and Shri Ashish Narula u/s. 138 of the Act and Sec. 420 of the Indian Penal Code. 5 Appellants were not signatories to the cheques. Appellant No. 1 became a director of the said Company only on 15.02.2000. Appellant No. 2 became a director on 1.12.1994. Both of them are said to have resigned from the post of directorship on 30.11.2000. 6 During pendency of the said complaint petition, an endeavour was made to resolve the disputes and differences between the parties. An agreement was entered into by and between the parties in terms whereof it was agreed that if a cheque for a sum of Rs. 5,02,050.00 is issued, the complaint petition would be withdrawn. Manish Arora issued a cheque for the said sum on 29.07.2000 which was also on presentation returned on 29.01.2001 with the remark "insufficient fund". It is stated that an agreement was also entered into by and between Shri Ashish Narula and the Company that the liability in question was his personal one. He allegedly affirmed an affidavit and executed an indemnity bond on 26.02.2000. 7 Complainant - respondent No. 2, however, filed another complaint petition with regard to the return of the said cheque dated 29.07.2000 not only against Shri Ashish Narula and Shri Manish Arora but also against the appellants herein. 8 Appellants were summoned in the said complaint case. They filed an application before the Chief Judicial Magistrate for setting aside the order summoning them. The same was dismissed. A revision application filed thereagainst has also been dismissed by the High Court by reason of the impugned judgment. 9 Mr. Rajeev Sharma, learned counsel appearing on behalf of the appellants, urged that the second complaint petition is not maintainable. 10 Mr. Brij Bhusan, learned counsel appearing on behalf of the respondents, however, supported the impugned judgment. 11 Section 138 of the Act reads, thus: "138 - Dishonour of cheque for insufficiency, etc., of funds in the account Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence 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." 12 It is not disputed that in respect of the first cheques dated 30.11.1999 and 10.12.1999, the appellants herein were not proceeded against. It is furthermore not in dispute that although a purported compromise was entered into by and between Ashish Narula, Manish Arora, on the one hand, and the complainant, on the other, as a result whereof the said cheque for a sum of Rs. 5,02,050.00 was issued and bounced; the complaint petition had not been withdrawn. By a judgment and order 16.01.2006, Ashish Narula and Manish Arora had been found guilty for commission of the offence u/s. 138 of the Act. They were sentenced to undergo one year's R.I. with fine of Rs. 20,000.00 each and in default thereof to undergo three months' simple imprisonment. They were also directed to make payment of rupees nine lakhs as compensation to the complainant within a period of one month of the orders u/s. 357 of the Code of Criminal Procedure. 13 The fact that Manish Arora issued the second cheque in terms of the settlement between the parties is not in dispute. It appears from the complaint petition itself, the requisite averments made therefor were as under: "5. That after getting their bail from the court the accused No. 2 to 6 approached and requested the complainant to take fresh cheques for full amount and withdraw the complaint and also felt sorry for the said dishonour of the cheque." 14 The learned Judicial Magistrate also in his order dated 1.10.2002 noticed: "It has been stated on behalf of the accused persons that by settlement it was found that the party involved in the dealing would be responsible. Thus, prayer has been made on behalf of the accused persons that the aforementioned all the three accused persons may be discharged from this case. The aforesaid contentions have been opposed on behalf of the complainant and it has been stated that all these three persons were party in the whole dealing and their liability is just like other accused persons. It is clear from the perusal of the complaint that total 6 accused persons have been made parties in this matter by the complainant and in her statement u/s. 200 of the Code of Criminal Procedure, complainant has clearly stated that Manish Arora, Ashish Narula and L.K. Sharma and Bela Narula and wife of L.K. Sharma were directors of the company. All the five accused persons demanded loan of Rs. Five Lakh Two Hundred Fifty from the complainant for some time and promised her to return the said money soon. All the five persons have been equally involved in the dealing of giving and receiving the cheque." 15 Evidently, therefore, the second cheque was issued in terms of the compromise. It did not create a new liability. As the compromise did not fructify, the same cannot be said to have been issued towards payment of debt. 16 Ingredients of Sec. 138 of the Act are as under: (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. 17 Thus, the second cheque was issued by Manish Arora for the purpose of arriving at a settlement. The said cheque was not issued in discharge of the debt or liability of the Company of which the appellants were said to be the directors. There was only one transaction between Shri Ashish Narula, Shri Manish Arora, Directors of the Company and the complainant. They have already been punished. Thus, the question of entertaining the second complaint did not arise. It was, in our opinion, wholly misconceived. The appeal, therefore, in our opinion, must be allowed. It is directed accordingly. Respondent shall bear the costs of the appellants. Counsel's fee assessed at Rs. 25,000.00.

RAMAN KUMAR BHARDWAJ (LAWYER)     13 March 2010

Originally posted by :RAMAN KUMAR BHARDWAJ
"
i have some time back studied a Judgement that the cheque issued in a compromise in the court  and if the same is dishonoured, no offence 138 is made out, inspite of due-dilligance i could not search the same.

 can any body have any Idea.

plz send me the same.
"

Rohit jain   25 August 2017

 In Lalit Kumar Sharma and Another v. State of Uttar Pradesh and Another – (2008) 5 SCC 638 wherein a second cheque was issued on compromise in a complaint under Section 138 of the NI Act, which on presentation was also dischonoured, it was observed that since second cheque was issued in terms of the compromise, it did not create a new liability and therefore, as the compromise did not fructify, the same could not be said to be issued towards the payment of debt.

SANTOSHSINGH. (ADVOCATE sardarsena@gmail.com)     10 September 2017

CHEQUE BOUNCE  - REAL PROBLEMS.

Cheque bounce is a draconian law. People post their problems on many public sites like this but every thing can not be explained or detailed.

People try to give solutions but the same has to be implemented at local level by local advocate which is always not possible.

Our group of advocates work on All India basis and provide free legal advice on the spot  with the affected person and his/ her advocate where ever we have cases going on. This procedure helps to get a workable line of action to come out of the problem.

Currently we have on going cases  at following places and even en route persons can take advantage of our efforts.

  1. Port blair – Andaman Nicobar.
  2. Kolkutta- west Bengal.
  3. Noida= UP.
  4. Maharashtra-  Mumbai, Nashik, Sangamner. Aurangabad.
  5. Gujrat=  surat.

We also discuss one case in this thread that what we are doing in particular case and it may be a guidance for similar cases.

PORT BLAIR :-  The accused was convicted and matter went to appeal where it was remanded back to lower court. However while remanding the appellate court put certain directions hence limited scope for the accused.

We joined at the stage of final arguments in this case at lower court. We raised certain legal points regarding documents and pleadings and applied for further cross of the complainant on certain specific points.

We had the support of BOMBAY HC AND APEX COURT judgments still the discretion is with the local court. So we have gone on revision on this point alone taking support of above citations and certain observations made by the higher court while remanding the case.

Now this revision will go for at least one or two years  for final  decision , by the time we have another specific step ready based on law and procedure.

WE WILL POST THE DEVELOPMENTS IN THIS CASE ON REGULAR BASIS.

Please contact us by  email only. Whatsup contact details will be provided on request for sending copies of documents.

 

SANTOSHSINGH. (ADVOCATE sardarsena@gmail.com)     10 September 2017

The above case will not help you. Still you have many options on technical issues find out and contest the case properly.

 YOU CAN WIN.


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