The presumption in favour of the check holder under section 139 of NI Act.<\/li>\n<\/ul>\n\n\n\nKishan Rao\nversus Shankargouda<\/h3>\n\n\n\n
In the case, the appellant challenged the High Court order, under which the Court, exercising amendment jurisdiction, set aside the conviction order against respondent under section 138 of NI Act.<\/p>\n\n\n\n
During the trial, the appellant examined the witnesses and produced documentary evidence to prove the respondent’s offence u\/s 138 of the NI Act. However, the defendant did not have any oral or documentary evidence in the Cheque Bounce Case. The trial court presumed against the accused under section 139 of the Act, 1881. The accused failed to reapply the presumption by leading any evidence on its behalf. Therefore, the trial court convicted the defendant u \/ section 138 NI Act.<\/p>\n\n\n\n
Criminal Revision<\/h3>\n\n\n\n
Aggrieved with the trial court’s order, the defendants\nfiled a criminal revision in the High Court. The High Court has allowed the\namendment to separate the conviction order from the applicable judgment.<\/p>\n\n\n\n
The High Court held that the accused had succeeded in\ncreating doubt in the court’s mind regarding the existence of debt or\nliability. Aggrieved with the decision of the High Court, the appellant\napproached the Supreme Court.<\/p>\n\n\n\n
Held Judgement<\/h3>\n\n\n\n
In the case, the Supreme Court ruled in favour of the\nappellant and set aside the High Court order. The apex court deliberated on two\nessential below stated points: <\/p>\n\n\n\n
\n- The scope of revision jurisdiction by the High Court;<\/li>\n\n\n\n
- The presumption favouring the cheque holder under section 139 of the NI Act.<\/li>\n<\/ul>\n\n\n\n
<\/span>Role of Bank In\ncase of Forged Signature on the Cheque <\/span><\/h2>\n\n\n\nThe bank has the right to stop the payment if there is\nany counterfeit on the cheque. The bank may take immediate action on such acts.<\/p>\n\n\n\n
Canara Bank\nversus Canara Sales Corporation & Ors<\/h3>\n\n\n\n
In the case, the Supreme Court said that “When a\ncheque presented for encashment has a forged signature, the bank has no right\nto pay against such cheque. <\/p>\n\n\n\n
Bhaskaran\nversus Shankaran Vaidhyan Balan<\/h3>\n\n\n\n
In respect of this case, bench of two judges of the Supreme Court held that the offence under Section 138 of NI Act could only be committed with the conclusion of several acts. However, this decision was overruled by Supreme Court’s decision in the Dashrath Roop Singh case.<\/p>\n\n\n\n
<\/span>Vicarious\nLiability of Company\u2019s Director in Cheque Bounce Cases<\/span><\/h2>\n\n\n\nThe director of a company can be held liable for acts\nperformed by its employee irrespective of the fact whether they were aware or\nnot.<\/p>\n\n\n\n
Modi Cements\nLimited versus Kuchil Kumar Nandi <\/h3>\n\n\n\n
Inadequacy of funds at the time of issuing a cheque does\nnot by itself infer dishonesty in issuing cheque.<\/p>\n\n\n\n
Jayalakshmi\nNataraj versus Jeena & Co<\/h3>\n\n\n\n
The managing director of the accused company was convicted under section 138 of NI Act despite his plea that he did not participate in the day-to-day administration of the company and was not aware of its affairs.<\/p>\n\n\n\n
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