Ni act section 138
kornigovind
(Querist) 27 March 2013
This query is : Resolved
Respected Sir,
I require latest suprme court judgments for post dated cheques given as an agreement under secuirty purpose of the loan amount is enforcble debt under NI Act. Please furnish judgments
Advocate M.Bhadra
(Expert) 27 March 2013
The original information taken from www.moneylife.in:----
The apex court has taken a strict view of cases where cheques are dishonoured
In a recent judgement on cheque bounce issues, the Supreme Court, while taking into consideration genuine cases, has suggested to follow the principle of the Laxmi Dyechem Vs State of Gujarat & Others, on a case to case basis as it is also necessary to properly judge the intention of the accused to avoid wrongful conviction.
Hopefully in near future, our legislature would incorporate the principles laid down by the judiciary into the statute by way of a much needed amendment to Section 138 in The Negotiable Instruments Act, 1881, to avoid any ambiguity as well as consider the inclusion of electronic operation of the bank accounts within the ambit of Section 138 of the Act.
Chapter XVII of the Negotiable Instruments Act, 1881 (the Act), was enacted to give effect to the legislative intent of the statute which it sought to achieve and to inculcate faith in the efficacy of banking operations and maintaining the credibility of the banking transactions. It seeks to prevent the misuse of the provisions of the Act and therefore, necessitates that a wider interpretation be imparted to it. However, over the years the operation of Section 138 of the Act has not been adequate to meet the needs of the society. The language of the Section itself is unsatisfactory as it restricts the scope thereof as well as does not make the bouncing of cheques and non-payment on notice, a summary offence. The Section has not been utilized very effectively and its administration has been very languid.
The Supreme Court, has assumed the role of a parliamentarian to ensure the effective compliance of law through a recent case of M/s Laxmi Dyechem Vs State Of Gujarat & Ors (Laxmi Dyechem), together with another recent ruling in Msr Leathers Vs S Palaniappan and Anr (Msr Leathers), wherein it has endeavoured to accord to the Section a broad scope to cover all aspects for prevention of misuse of the provisions of the Act, which may occur due to the restricted language of Section 138 of the Act. However, in the present era when there is an increasing dependency on the electronic mode of payment in all spheres of life, many milestones are yet to be achieved to ensure the longevity of the statute. For instance, with the onset of internet banking, phone/mobile banking, electronic transfers, etc, cheques are getting antiquated as a mode of payment. Hence, requisite provisions regulating the electronic mode of payment have to be incorporated. Despite the fact that an electronic mode of payment does not constitute a ‘negotiable’ trade paper, this cannot be the reason for not giving it credibility equivalent to that which the cheques warrant. Secondly, it is inevitable that the courts should resort to effective and proficient methods for the expeditious and speedy disposal of cases. Presently, the number of backlog cases in the courts across the country is estimated to be over an unreasonable amount of 3.5 crore, which poses a serious question on the reliability of the courts and the same is a major concern which needs to adhered to as urgently as possible.
Adv k . mahesh
(Expert) 27 March 2013
go through indian kanoon website
Raj Kumar Makkad
(Expert) 28 March 2013
Relevant citations can be got searched on indiakanoon portal.
