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AJOY KUMAR MUKHERJEE
Madhusudan Garai – Appellant
Versus
State of West Bengal – Respondent
JUDGMENT :
AJOY KUMAR MUKHERJEE, J.
1. The petitioner herein has prayed for quashing the impugned proceeding being C.S No. 29044 of 2019 initiated under section 138 of Negotiable Instrument Act (N.I. Act) which is presently pending before judicial Magistrate 18th Court Calcutta.
2. The petitioner being a partnership firm namely M/s Madhusuhdan Garai, entered into a dealership agreement with Honda Motor Cycle and Scooter India Pvt. Ltd. Aforesaid firm proposed for financial assistance to the opposite party No. 2, who sanctioned Rs. 6.50 Crores on the terms and conditions mentioned in the sanctioned letter dated 24.09.2018.
3. Petitioner’s further contention is that some dispute and differences arose between said Firm and Honda Motor Cycle and Scooter India Pvt. Ltd. and for which business of the firm were badly hampered and the firm suffered huge loss and damages. In the said backdrop, the said firm requested opposite party no. 2 to restructure the loan limit by reducing it from Rs. 6.50 to 3.25 crores and to convert the balance 3.25 crores into a term loan for the period of three years, which was not accepted by the opposite party no. 2/bank and on the contrary by issuing a letter date
The court upheld the validity of a dishonored cheque under Section 138 of the N.I. Act, allowing simultaneous proceedings under the N.I. Act and SARFAESI Act, emphasizing the distinct purposes of eac....
The court affirmed that partners can be held vicariously liable for a cheque issued by the firm if sufficient averments are made in the complaint, regardless of claims of being sleeping partners.
A person who is not a signatory to the cheque cannot be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, for the offence of dishonour of cheque for insufficiency of funds.
Prima facie evidence of mens rea for the offence, as indicated by cheque dishonour and non-repayment, constitutes grounds for trial and dismissal of petition to quash the criminal proceeding.
The main legal point established is that the issuance of blank cheques as security for a loan attracts penal provisions of Section 138 NI Act, and the burden of proving the absence of a legally enfor....
The dishonour of cheques and the existence of a legally enforceable debt must be proved, and the presumption under section 139 of the NI Act can only be rebutted with strong evidence.
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