MODI CEMENTS LTD. versus SHRI KUCHIL KUMAR NANDI

MODI CEMENTS LTD. versus SHRI KUCHIL KUMAR NANDI

'Stop payment' instructions issued by the drawer before presentation of cheque do not preclude prosecution under Section 138; the presumption of liability arises under Section 139 upon issuance, and drawer can rebut at trial. Quashing at the threshold is not justified where prima facie case exists. Decisions in Electronics Trade & Technology Development Corporation Ltd. v. Indian Technologists & Engineers (Electronics) (P.) Ltd., (1996) 2 SCC 739 and K.K. Sidharthan v. T.P. Praveena Chandran, (1996) 6 SCC 369, insofar as contrary to this principle, are overruled.

Parties
Appellant: Modi Cements Ltd.; Respondent: Shri Kuchil Kumar Nandi
Jurisdiction
India
Judgment Date
22 March 1998
Procedural Posture
Criminal Appeal / Appeal From High Court Order Quashing Complaint
Outcome
Appeals allowed
Legal Topics
Negotiable Instruments, Dishonour of Cheque, Stop Payment Instructions, Presumption Under Section 139
Criminal Law Negotiable Instruments Dishonour of Cheque Stop Payment Instructions Presumption Under Section 139

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 2 Authorities cited 4 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Modi Cements Ltd.

Appellant

Shri Kuchil Kumar Nandi

Respondent

Procedural Posture

Criminal Appeal / Appeal From High Court Order Quashing Complaint

Legal Issues

  1. 1 Whether 'stop payment' instructions by drawer preclude action under Section 138 of the Negotiable Instruments Act, 1881
  2. 2 Whether quashing of complaint by High Court was justified in absence of pleading of insufficiency of funds or arrangement with bank
  3. 3 Whether presumption under Section 139 is attracted and can be rebutted at trial

Ratio Decidendi

'Stop payment' instructions issued by the drawer before presentation of cheque do not preclude prosecution under Section 138; the presumption of liability arises under Section 139 upon issuance, and drawer can rebut at trial. Quashing at the threshold is not justified where prima facie case exists. Decisions in Electronics Trade & Technology Development Corporation Ltd. v. Indian Technologists & Engineers (Electronics) (P.) Ltd., (1996) 2 SCC 739 and K.K. Sidharthan v. T.P. Praveena Chandran, (1996) 6 SCC 369, insofar as contrary to this principle, are overruled.

Court Disposition

Appeals allowed

Orders

  • Order of Calcutta High Court dated 21.11.96 in Criminal Revision Petition Nos. 2303-2304 of 1995 quashed and set aside
  • Order of Metropolitan Magistrate, 11th Court, Calcutta on 6.4.95 restored