Skip to main content

Some more ambiguities with bounced cheques settled by the Supreme Court

The Supreme Court decided on two important questions relating to bounced cheques last week. Resolving the apparent conflict in views between high courts and different benches of the Supreme Court, a larger bench of the apex court laid down that (i) a complaint about a bounced cheque can be filed by a power of attorney holder, and (ii) the power of attorney holder can depose and verify on oath before the court in order to prove the contents of the complaint if he had witnessed the transaction as an agent of the payee/holder in due course or possesses due knowledge regarding the transactions.

The court was deciding two appeals against the judgments of the Bombay and Andhra Pradesh high courts. The Mumbai case, A C Narayanan vs State of Maharashtra, started when a firm launched a scheme of investment and collected amounts from various persons in the form of loans. It, then, issued post-dated cheques in the managing director's personal capacity. The cheques were dishonoured leading to criminal complaint under the Negotiable Instruments Act.

The complaint was filed by a person on behalf of several others. The MD moved courts for quashing the complaint, but without success. The Andhra case was similar. The main issue was whether a power of attorney holder could file a complaint. The Supreme Court said yes, and referred all such cases back to the courts where they came from to decide on them, according to the facts in each case.

The second issue settled in the judgment, Escorts Ltd vs Rama Mukherjee, was whether the court within whose jurisdiction the bounced cheque was presented had jurisdiction to entertain the complaint. The court stated that a complaint could be filed in any of the jurisdictions where transactions took place, including the place of issue and the place of dishonour.

Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more