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Thursday, October 12, 2023

How cautious to be; even while issuing a notice on a cheque bounce - section 141(1) of NI Act.


How cautious to be; even while issuing a notice on a cheque bounce

Bouncing of cheques and subsequent prosecutions are not alien to common man. Right from the beginning of issuance of notice till the final judgement in a complaint which is duly prosecuted before the magistrate, everything are highly technical too. Since there is presumption once the  execution is proved in these kind of cases, every room of technicality in getting an acquittal will be brooded over by the accused.  

The recent judgement of supreme Court of India in Siby Thomas V. M/s Somany Ceramics Ltd. 2023 KHC Online 6903,  reiterates by pointing out the concept that the complaint should contain mandatory averments required to be made in terms of section 141 (1) of negotiable instrument Act. It is held that it is the primary responsibility of the complainant to make specific averments in the complaint that accused concerned is a person who was incharge and responsible for the conduct of business of the company at the relevant time when the offence was committed so as to make the accused vicariously liable. The reasoning is that merely because somebody is managing the affairs of the company per se, he would not become in charge of the conduct of the business of the company or the person responsible to the company for the conduct of the business of Company. Therefore only by saying that a person was in charge of the company at the time when the offence was committed is not sufficient to attract Section 141(1) of Negotiable Instruments Act. Supreme court relied on various decisions especially the decision in Gunmala Sales Private Ltd V. Anu Mehta 2015 1 SCC 103. 

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