Cheque Dishonour Case against a Company, Firm or Society

Jojy George Koduvath

From Sec. 141 of the NI Act, it comes out –

• Company, Firm and Society are treated alike for the purpose of cheque-bounce-cases.
• A partner in a firm or Governing Body member in a Society is treated like a director in a Company.
• Every person (director, partner or Governing Body member) who, at the time the offence was committed, was in charge of, and was responsible (to the company, firm or society for the conduct of its business), shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
• Apart from the director, partner or Governing Body member, the company, firm or society shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
• The company, firm or society shall be a necessary party.
• If the director, partner or Governing Body member proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence, such person will not be liable to punishment.
• The nominated Director of a Government  company or a financial corporation shall not be liable for prosecution.
• If the offence has been committed by a company, firm or society and it is proved that the offence has been committed with the consent or connivance of any any director, manager, secretary or other officer, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished.

Sec. 141 of the NI Act reads as under:

• 141 Offences by companies — (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
• Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
• Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
• (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
• Explanation.— For the purposes of this section,—
• (a) “company” means any body corporate and includes a firm or other association of individuals; and
• (b) “director”, in relation to a firm, means a partner in the firm.

Relevant Decisions in these matters

• Pawan Kumar Goel v. State of U.P., (2022) SCC OnLine SC 1598,
• Sunita Palita v. Panchami Stone Quarry, 2022 SC OnLine SCC 945,
• Secretary to Govt of Kerala v. james Varghese, (2022) 9 SCC 593,
• S.P. Mani v. Dr. Snehalatha Elangovan, (2022) SCC Online SC 1238,
• Sunita Palita v. Panchami Stone Quarry, (2022) 10 SCC 152
• P. Saravana Kumar v. S.P. Vijaya Kumar, (2022) SCC Online Mad 1387,
• P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258,
• Dr. Shah Faesal v. Union of India, (2020) 4 SCC 1,
• Peerless General Finance v. Commissioner of IT, (2020) 18 SCC 625,
• Surinder Singh Deswal v. Virender Gandhi (2020) 2 SCC 514,
• G.J. Raja v. Tejraj Surana (2019) 19 SCC 469,
• Surinder Singh Deswal v. Virender Gandhi (2019) 11 SCC 341,
• Nandkishor Prallhad Vyvhare v. Mangala, (2018) 3 MhLJ 913,
• Rodger Shashoua v. Mukesh Sharma, (2017) 14 SCC 1,
• Eerra Through Dr. Manjula v. State (NCT of Delhi), (2017) 15 SCC 133,
• South Central Railway Employees Coop. Credit Society v. B. Yashodabai (2015) 2 SCC 727,
• Rathod v. State of Maharashtra, (2014) 9 SCC 129,
• Pooja Ravinder Devidsani v. State of Maharashtra, (2014) 16 SCC 1,
• Sundeep Kumar Bafna v. State of Maharashtra, (2014) 16 SCC 623,
• Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd., (2012) 5 SCC 661,
• Hada v. Godfather Travels & Tours, 2012-5 SCC 661,
• National Small-Scale Industries v. Harmeet Singh, (2010) 3 SCC 330,
• K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48,
• N. Harihara v. J Thomas, (2008) 13 SCC 663,
• S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2007) 4 SCC 70,
• Oriental Insurance Co. Ltd v. Meena Variyal, (2007) 5 SCC 428,
• Maruti Udyog Ltd. v. Ram Lal, (2005) 2 SCC 638,
• S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) SCC 89,
• Steel Authority of India v. National Union Waterfront, (2001) 7 SCC 1,
• Special Officer , Urban Land Ceilings v. P.S. Rao, (2000) 2 SCC 451,
• Nedungadi Bank Ltd. v. K.P. Madhavankutty, (2000) 2 SCC 455.

Read Blogs:

• Suits and Criminal Complaints By and Against a Company
• “Otherwise Through an Account” in Section 142, NI Act
• Where to file Cheque Bounce Cases (Jurisdiction of Court – to file NI Act Complaint)?

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Book No, 1 – Civil Procedure Code

• Civil Rights and Jurisdiction of Civil Courts
• Res Judicata and Constructive Res Judicata
• Order II, Rule 2 CPC – Not to Vex Defendants Twice
• Pleadings Should be Specific; Why?
• UNDUE INFLUENCE and PLEADINGS thereof in Indian Law
• PLEADINGS IN ELECTION MATTERS
• Declaration and Injunction
• Law on Summons to Defendants and Witnesses
• Notice to Produce Documents in Civil Cases
• Production of Documents: Order 11, Rule 14 & Rule 12
• Sec. 91 CPC and Suits Against Wrongful Acts
• Remedies Under Sec. 92 CPC
• Mandatory Injunction – Law and Principles
• INJUNCTION is a ‘Possessory Remedy’ in Indian Law
• Interrogatories: When Court Allows, When Rejects?
• Decree in OI R8 CPC-Suit & Eo-Nomine Parties
• Pecuniary & Subject-Matter Jurisdiction of Civil Courts
• Transfer of Property with Conditions & Contingent Interests
• INJUNCTION is a ‘Possessory Remedy’ in Indian Law
• Doctrine of Substantial Representation in a Suit by or against an Association
• Who are Necessary Parties, Proper Parties and Pro Forma Parties in Suits
• What is Partnership, in Law? How to Sue a Firm?
• ‘Legal Representatives’, Not ‘Legal Heirs’ to be Impleaded on Death of Plaintiff/Defendant
• Powers and Duties of Commissioners to Make Local Investigations, Under CPC
• Burden of Proof – Initial Burden and Shifting Onus
• Is it Mandatory to Set Aside the Commission Report – Where a Second Commissioner is Appointed?
• Can a Commission be Appointed to Find Out the Physical Possession of a Property?
• Rules on Burden of proof and Adverse Inference
• Pendente Lite Transferee Cannot Resist or Obstruct Execution of a Decree
• Family Settlement or Family Arrangement in Law

Power of attorney

• No Adjudication If Power of Attorney is Sufficiently Stamped
• Notary Attested Power-of-Attorney Sufficient for Registration
• Permission when a Power of Attorney Holder Files Suit
• If Power of Attorney himself Executes the Document, S. 33 Registration Act will NOT be attracted
• Is Registered Power of Attorney Necessary for Registration of a Deed? No.

Title, ownership and Possession

• Sale Deeds Without Consideration – Void
• Recovery of Possession Based on Title and on Earlier Possession
• Title and Ownership in Indian Law
• Does ‘Abandonment’ Give rise to a Recognised Right in Indian Law?
• POSSESSION is a Substantive Right in Indian Law
• 22nd Law Commission  Report on ‘Law on Adverse Possession’
• How to Plead Adverse Possession? Adverse Possession: An Evolving Concept
• Adverse Possession: Burden to Plead Sabotaged
• When ‘Possession Follows Title’; ‘Title Follows Possession’?
• Ultimate Ownership of All Property Vests in State; It is an Incident of Sovereignty.
• ‘Mutation’ by Revenue Authorities & Survey will not Confer ‘Title’
• Preemption is a Very Weak Right; For, Property Right is a Constitutional & Human Right
• Transfer of Property with Conditions & Contingent Interests
• Family Settlement or Family Arrangement in Law
• INJUNCTION is a ‘Possessory Remedy’ in Indian Law
• Kesar Bai v. Genda Lal – Does Something Remain Untold?
• Grant in Law

Principles and Procedure

• Doctrines on Ultra Vires, Rule of Law, Judicial Review, Nullification of Mandamus, and Removing the BASIS of the Judgment
• Will – Probate and Letters of Administration
• Best Evidence Rule in Indian Law
• Declaration and Injunction
• Pleadings Should be Specific; Why?
• Does Alternate Remedy Bar Civil Suits and Writ Petitions?
• Void, Voidable, Ab Initio Void, and Sham Transactions
• Can Courts Award Interest on Equitable Grounds?
• Natural Justice – Not an Unruly Horse
• ‘Sound-mind’ and ‘Unsound-Mind’
• Prescriptive Rights – Inchoate until the Title thereof is Upheld by a Competent Court
• Can a Party to Suit Examine Opposite Party, as of Right?
• Forfeiture of Earnest Money and Reasonable Compensation
• Doctrine of ‘Right to be Forgotten’ in Indian Law
• Who has to fix Damages in Tort and Contract?

Admission, Relevancy and Proof

• Relevancy, Admissibility and Proof of Documents
• Proof and Truth of Documents
• Burden of Proof – Initial Burden and Shifting Onus
• Production, Admissibility & Proof Of Documents
• Modes of Proof – Admission, Expert Evidence, Presumption etc.
• Marking Documents Without Objection – Do Contents Proved
• Substantive Documents, and Documents used for Refreshing Memory and Contradicting 
• Oral Evidence on Contents of Document, Irrelevant

Land Laws/ Transfer of Property Act

• Does ‘Pandaravaka Pattom’ in Kerala Denote Full-Ownership?
• Transfer of Property with Conditions & Contingent Interests
• Vested Remainder and Contingent Remainder
• Vested interest and Contingent Interest
• Ultimate Ownership of All Property Vests in State; It is an Incident of Sovereignty.
• Land Acquired Cannot be Returned – Even if it is Not Used for the Purpose Acquired
• ‘Mutation’ by Revenue Authorities & Survey will not Confer ‘Title’
• FERA, 1973 And Transfer of Immovable Property by a Foreigner
• Marumakkathayam – A System of Law and Way of Life Prevailed in Kerala
• Relevant provisions of Kerala Land Reforms Act in a Nutshell
• Land Tenures, and History of Land Derivation, in Kerala
• Government is the OWNER of (Leasehold) Plantation Lands in Kerala.
• Sale Deeds Without Consideration – Void
• Law on Acquisition of Private Plantation Land in Kerala
• Law on SUCCESSION CERTIFICATE and LEGAL HEIRSHIP CERTIFICATE
• Grant in Law

Evidence Act – General

• Evidence in Court – General Principles
• Expert Evidence and Appreciation of Evidence
• How to Contradict a Witness under Sec. 145, Evidence Act
• Rules on Burden of proof and Adverse Inference
• Best Evidence Rule in Indian Law
• What is Collateral Purpose?
• Burden of Proof – Initial Burden and Shifting Onus
• Modes of Proof – Admission, Expert Evidence, Presumption etc.
• How to Prove a Will, in Court?Is Presumption enough to Prove a Registered Will?
• Significance of Scientific Evidence in Judicial Process
• Polygraphy, Narco Analysis and Brain Mapping Tests
• What is Section 27 Evidence Act – Recovery or Discovery?
• How ‘Discovery’ under Section 27, Evidence Act, Proved?

Sec. 65B

• Sec. 65B, Evidence Act: Arjun Paditrao Criticised.
• Sec. 65B Evidence Act Simplified
• ‘STATEMENTS’ alone can be proved by ‘CERTIFICATE’ u/s. 65B
• Sec. 65B,  Evidence Act: Certificate forms
• Certificate is Required Only for ‘Computer Output’; Not for ‘Electronic Records’: Arjun Panditrao Explored.
• How to Prove ‘Whatsap Messages’, ‘Facebook’ and ‘Website’ in Courts?

Law on Documents

• Production, Admissibility & Proof Of Documents
• Relevancy, Admissibility and Proof of Documents
• Admission of Documents in Evidence on ‘Admission’
• Time Limit for Registration of Documents
• Registration of Documents Executed out of India
• How to Prove a Will, in Court?Is Presumption enough to Prove a Registered Will?
• Are RTI Documents Admissible in Evidence as ‘Public Documents’?
• Oral Evidence on Contents of Document, Irrelevant
• Effect of Marking Documents Without Objection – Do Contents Stand Proved?
• Proof of Documents & Objections To Admissibility – How & When?
• Notary-Attested Documents: Presumption, Rebuttable
• What is Collateral Purpose?
• No Application Needed for Filing or Admitting Copy
• Presumptions on Registered Documents & Truth of Contents
• Notice to Produce Documents in Civil Cases
• Production of Documents: Order 11, Rule 14 & Rule 12
• Modes of Proof – Admission, Expert Evidence, Presumption etc.
• Proof and Truth of Documents
• Secondary Evidence of Documents & Objections to Admissibility – How & When?
• 30 Years Old Documents and Presumption of Truth of Contents, under Sec. 90 Evidence Act
• Unstamped & Unregistered Documents and Collateral Purpose
• Adjudication as to Proper Stamp under Stamp Act
• Marking Documents Without Objection – Do Contents Proved
• Cancellation of Sale Deeds and Settlement Deeds & Powers of Sub-Registrar in Registering Deeds
• Substantive Documents, and Documents used for Refreshing Memory and Contradicting 
• How to Contradict a Witness under Sec. 145, Evidence Act
• Visual and Audio Evidence (Including Photographs, Cassettes, Tape-recordings, Films, CCTV Footage, CDs, e-mails, Chips, Hard-discs, Pen-drives)
• No Adjudication Needed If Power of Attorney is Sufficiently Stamped
• Can an Unregistered Sale Agreement be Used for Specific Performance
• Impounding of Documents – When Produced; Cannot Wait Till it is Exhibited

Interpretation

• Interpretation of Statutes – Literal Rule, Mischief Rule and Golden Rule
• Interpretation of Documents – Literal Rule, Mischief Rule and Golden Rule
• Interpretation of Wills

Contract Act

• ‘Sound-mind’ and ‘Unsound-Mind’ in Indian Civil Laws
• Forfeiture of Earnest Money and Reasonable Compensation
• Who has to fix Damages in Tort and Contract?
• UNDUE INFLUENCE and PLEADINGS thereof in Indian Law
• Can an Unregistered Sale Agreement be Used for Specific Performance

Easement

• Easement Simplified
• What is Easement? Does Right of Easement Allow to ‘Enjoy’ After Making a Construction?
• Prescriptive Rights – Inchoate until the Title thereof is Upheld by a Competent Court
• Will Easement of Necessity Ripen into a Prescriptive Easement?
• What is “period ending within two years next before the institution of the suit”?
• Is the Basis of Every Easement, Theoretically, a Grant
• Extent of Easement (Width of Way) in Easement of Necessity, Quasi Easement and Implied Grant
• Can Easement of Necessity and of Grant be Claimed in a Suit (Alternatively)?
• “Implied Grant” in Law of Easements
• Can an Easement-Way be Altered by the Owner of the Land?
• Village Pathways and Right to Bury are not Easements.
• Custom & Customary Easements in Indian Law
• ‘Additional Burden Loses Lateral Support’ – Incorrect Proposition
• Grant in Law

Stamp Act & Registration

• Cancellation of Sale Deeds and Settlement Deeds & Powers of Sub-Registrar in Registering Deeds
• Time-Limit For Adjudication of Unstamped Documents, before Collector
• Time Limit for Registration of Documents
• Registration of Documents Executed out of India
• LAW ON INSUFFICIENTLY STAMPED DOCUMENTS 
• Adjudication as to Proper Stamp under Stamp Act
• Unstamped & Unregistered Documents and Collateral Purpose
• Impounding of Documents, When Produced; Cannot Wait Till it is Exhibited
• No Adjudication Needed If Power of Attorney is Sufficiently Stamped
• Notary Attested Power-of-Attorney Sufficient for Registration

Will

• Interpretation of Wills
• Interpretation of Inconsistent Clauses in a Will
• Will – Probate and Letters of Administration
• Executors of Will – Duties & their Removal
• How to Prove a Will, in Court?Is Presumption enough to Prove a Registered Will?
• How to Write a Will? Requirements of a Valid Will

Arbitration

• N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. and Ground Realities of Indian Situation
• What are Non-Arbitrable Disputes? When a Dispute is Not Referred to Arbitration in spite of Arbitration Clause
• Termination or Nullity of Contract Will Not Cease Efficacy of the Arbitration Clause
• No Valid Arbitration Agreement ‘Exists’ – Can Arbitration Clause be Invoked?

Divorce

• Validity of Foreign Divorce Decrees in India
• Is ‘Irretrievable Brake-down of Marriage’, a Valid Ground for Divorce in India?
• Foreign Divorce Judgment against Christians having Indian Domicile

Negotiable Instruments Act

• “Otherwise Through an Account” in Section 142, NI Act
• Where to file Cheque Bounce Cases (Jurisdiction of Court – to file NI Act Complaint)?
• Cheque Dishonour Case against a Company, Firm or Society

Book No. 2: A Handbook on Constitutional Issues

• Judicial & Legislative Activism in India: Principles and Instances
• Can Legislature Overpower Court Decisions by an Enactment?
• Separation of Powers: Who Wins the Race – Legislature or Judiciary?
• Kesavananda Bharati Case: Never Ending Controversy
• Mullaperiyar Dam: Disputes and Adjudication of Legal Issues
• Article 370: Is There Little Chance for Supreme Court Interference
• Maratha Backward Community Reservation: SC Fixed Limit at 50%.
• Polygraphy, Narco Analysis and Brain Mapping Tests
• CAA Challenge: Divergent Views
• FERA, 1973 And Transfer of Immovable Property by a Foreigner
• Doctrine of ‘Right to be Forgotten’ in Indian Law
• Doctrines on Ultra Vires and Removing the BASIS of the Judgment, in ED Director’s Tenure Extension Case (Dr. Jaya Thakur Vs. Union of India)
• Dr. Jaya Thakur v. Union of India – Mandamus (Given in a Case) Cannot be Annulled by Changing the Law

Religious issues

• Secularism and Art. 25 & 26 of the Indian Constitution
• Secularism & Freedom of Religion in Indian Panorama
• ‘Ban on Muslim Women to Enter Mosques, Unconstitutional’
• No Reservation to Muslim and Christian SCs/STs (Dalits) Why?
• Parsi Women – Excommunication for Marrying Outside
• Knanaya Endogamy & Constitution of India
• Sabarimala Review Petitions & Reference to 9-Judge Bench
• SABARIMALA REVIEW and Conflict in Findings between Shirur Mutt Case & Durgah Committee Case
• Ayodhya Disputes: M. Siddiq case –Pragmatic Verdict

Book No. 3: Common Law of CLUBS and SOCIETIES in India

• General
  • General Features
  • Bye Laws Fundamental
  • Effect of Registration of Societies and Incorporation of Clubs
  • Societies and Branches
• Property & Trust
  • Vesting of Property in Societies and Clubs
  • Incidents of Trust in Clubs and Societies
• Juristic Personality
  • Juristic Personality of Societies and Clubs
  • Legal Personality of Trustees and Office Bearers
• Suits
  • Suits and Criminal Complaints By and Against a Company
  • Suits By or Against Societies, Clubs
  • Court’s Jurisdiction to Interfere in the Internal Affairs
  • How to Sue Societies, Clubs and Companies
• Amendment and Dissolution
  • Amendment of Bye laws of Societies and Clubs
  • Dissolution of Societies and Clubs
• Rights and Management
  • Rights & Liabilities of Members of Clubs and Societies
  • Individual Membership Rights in Societies & Clubs
  • Management – Powers of General Body and Governing Body
  • Expulsion of Members & Removal of Office-Bearers
  • Law on Meetings: An Overview
• Election
  • Election & Challenge in Societies and Clubs
  • Court Interference in Election Process
• State Actions
  • State-Interference in Affairs of Societies & Clubs

Book No. 4: Common Law of TRUSTS in India

• General Principles
  • What is Trust in Law?
  • Classification of Trusts
  • Public & Private Trusts in India.
  • Trust is ‘An Obligation’; Not a Legal Entity
  • Indian Law Does Not Accept Salmond, as to Dual Ownership
• Dedication and Vesting
  • Dedication of Property in Public Trusts
  • Vesting of Property in Trusts
  • Incidents of Trust in Clubs and Societies
• Trustees and Management
  • Trustees and Administration of Public Trusts
  • Alienation of Public Trust Property
  • Extinction, Discharge, Revocation, etc. of Public Trusts
• Breach of Trust
  • Breach of Trust and Removal of Trustees
• Suits by or against Trusts
  • Suits By or Against Trusts and Trustees
  • Remedies Under Sec. 92 CPC
• Law on Hindu Religious Endowments
  • Philosophy of Idol Worship
  • Is an Idol a Perpetual Minor?
  • Hindu Temples & Law of Trusts
  • Public & Private Trusts
  • Law of Mutts and Other Hindu Endowments
  • Shebaits & Mahants and Law of Trustees
• Temples, Gurudwaras, Churches and Mosques – General
  • Legal Personality of Temples, Gurudwaras, Churches and Mosques
• Constitutional Principles
  • Secularism and Art. 25 & 26 of the Indian Constitution
  • Secularism & Freedom of Religion in Indian Panorama
  • ‘Muslim Women: Ban to Enter Mosques, Is it Unconstitutional
  • Parsi Women Excommunication, Unconstitutional.
  • Knanaya Endogamy & Constitution of India
  • State & Court – Protectors of All Charities
• Ayodhya and Sabarimala Disputes
  • Ayodhya Disputes: M. Siddiq case – Pragmatic Verdict
  • Sabarimala Review Petitions & Reference to 9-Judge Bench
  • SABARIMALA REVIEW and Conflict in Findings between Shirur Mutt Case & Durgah Committee Case
• General
  • Public Trusts and (State) Endowments/Trusts Acts
  • Public Trusts and Indian Trusts Act – An Overview
  • Business by Charitable Trusts & Institutions