1. Rajaram Sriramulu Naidu (D) vs Maruthachalam (D), 2023 LiveLaw (SC) 46 : The Supreme Court upheld the acquittal in a Section 138 NI Act case, emphasizing the need for a preponderance of probabilities to challenge the presumption under Section 139 NI Act. The accused relied on Income Tax Returns, proving the complainant’s lack of financial capacity and absence of declaration of lending money, supporting the acquittal (Para 24-31).

1. BV Seshaiah vs State of Telangana & B Vamsi Krishna vs State of Telangana, 2023 LiveLaw (SC) 75 : The Supreme Court overturned a conviction in a cheque dishonour case, stating that High Courts cannot override an agreement to compound a compoundable offence between litigating parties (Para 11).

2. Ashok Shewakramani V. State Of Andhra Pradesh., 2023 LiveLaw (SC) 622 : The Supreme Court clarified that under Section 141 of the NI Act, an individual becomes vicariously liable in a Section 138 offence only if they were specifically “in charge of” and “responsible for the conduct of the company’s business” at the time of the offence. Mere management of company affairs doesn’t automatically render someone responsible for the company’s conduct of business (Para 19 and 20).

3. Siby Thomas v. Somany Ceramics Ltd., 2023 LiveLaw (SC) 869 : The Supreme Court, while dismissing a criminal complaint regarding a cheque under Section 138 read with Section 141 NI Act, emphasized that according to Section 141(1) NI Act, only the person who was in charge and responsible for conducting the business of the company at the time of the offence, along with the company, can be held guilty and liable for prosecution. This ruling pertained to a partner of a partnership firm against whom the complaint was lodged (Para 16).
4. Harpal Singh Vs. The State of Haryana., 2023 LiveLaw (SC) 1046 : The Supreme Court clarified that in cases involving bounced cheques, the defense of adequate funds in other bank accounts cannot be considered. Specifically, in proceedings under Section 138 of the Negotiable Instruments Act, reliance on other bank accounts is not permissible when addressing a dishonoured cheque related to a specific bank account of the accused (Para 6).
5. Razak Mether v. State of Kerala and Anr., 2023 LiveLaw (Ker) 24 : The Kerala High Court, referring to A.C.Narayanan v. State of Maharashtra &anr, affirmed the legality and competency of filing a complaint under Section 138 NI Act through a power of attorney holder. However, the court emphasized that the power of attorney holder can depose and verify the complaint’s contents before the Court only if they have witnessed the transaction or possess adequate knowledge about it. The complainant must explicitly assert in the complaint the power of attorney holder’s awareness of the transaction (Para 11).
6. Delhi High Court on Vicarious Liability in NI Act : The Delhi High Court highlighted that holding chairpersons of large companies responsible for cheque dishonour would unfairly broaden the scope of ‘vicarious liability’ under the Negotiable Instruments Act.
7. Yashovardhan Birla vs Cecil Webber Engineering Ltd & Ors., 2023 LiveLaw (Del) 320 : The Delhi High Court, in quashing proceedings under Section 138 of the NI Act, emphasized that holding Chairpersons of large companies accountable for day-to-day business cheques would unduly expand vicarious liability. The Court highlighted that the role of a Chairperson is more supervisory and guiding in nature rather than executive, typically not involving direct intervention in daily company affairs (Para 23-25).
8. Mohammad Ashraf Wani Vs Muzamil Bashir., 2023 LiveLaw (JKL) 89 : The Jammu and Kashmir and Ladakh High Court clarified that Order XXIII Rule 3 of the Civil Procedure Code (CPC) cannot be applied to address complaints under Section 138 of the NI Act. This provision of the CPC deals with settlements between parties in civil disputes, and the Court emphasized that such provisions cannot be used in criminal proceedings under Section 138 of the NI Act governed by the Code of Criminal Procedure (Para 10).
9. Paulose v. Baiju & Anr., 2023 LiveLaw (Ker) 328 : The Kerala High Court, citing Mallikarjun Kodagali (Dead) represented through Legal Representatives v. State of Karnataka & Ors., clarified that in a Section 138 NI Act prosecution, the complainant does not fall within the definition of ‘victim’ as outlined in Section 2(wa) of the Criminal Procedure Code (Cr.P.C.) (Para 5). The definition of ‘victim’ in Section 2(wa) refers to a person suffering loss or injury due to the act for which the accused is charged.
10. Arvind Singh Rajpoot v. M/S Intersight Holidays Pvt. Ltd. & Ors., 2023 LiveLaw (Ker) 445 : The Kerala High Court highlighted that a third party cannot prosecute the drawer of a cheque under Section 138 NI Act. Only the ‘payee’ or the ‘holder in due course’ of the cheque has the entitlement to file a complaint alleging an offence under Section 138 of the NI Act (Para 8).
11. Davidraj v Pavel., Crl.OP(MD)No.19190 of 2019 : The Madras High Court, in quashing a complaint under Section 138 NI Act against a client by their lawyer for dishonour of a cheque, stated that an advocate’s fee, considered illegal per Legal Practitioners Rules, does not constitute a legal claim. Therefore, the client cannot be held legally liable to pay such an illegal fee (Para 13-15).

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