A. Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), Section 42, 43 – NDPS case -- Power of entry, search, seizure and arrest:

-- Section 42 requires recording of reasons for belief and for taking down of information received in writing with regard to the commission of an offence before conducting search and seizure.

-- Section 43 does not contain any such provision and as such while acting u/s 43 of the Act, the empowered officer has the power of seizure of the article etc. and arrest of a person who is found to be in possession of any narcotic drug or psychotropic substance in a public place where such possession appears to him to be unlawful.

(Para 12)

B. Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), Section 42(1)(2) -- NDPS case -- Power of entry, search, seizure and arrest – Statutory requirement of writing down and conveying information to superior officer -- Provisions should be taken as discretionary measure:

-- If the statutory provisions u/s 41(2) and 42(2) of the Act of writing down the information is interpreted as a mandatory provision, it will disable the haste of an emergency situation and may turn out to be in vain with regard to the criminal search and seizure -- These provisions should not be misused by the wrongdoers/offenders as a major ground for acquittal -- Consequently, these provisions should be taken as discretionary measure which should check the misuse of the Act rather than providing an escape to the hardened drug-peddlers.

(Para 16)

C. Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), Section 42(1)(2) -- Scope and applicability of Section 42 of NDPS Act -- Power of entry, search, seizure and arrest – Statutory requirement of writing down and conveying information to superior officer – Abdul Rashid, (2000) 2 SCC 513 did not require literal compliance with the requirements of Sections 42(1) and 42(2) nor did Sajan Abraham (2001) 6 SCC 692 hold that the requirements of Section 42(1) and 42(2) need not be fulfilled at all. The effect of the two decisions was as follows:

(a)     The officer on receiving the information (of the nature referred to in Sub-section (1) of section 42) from any person had to record it in writing in the concerned Register and forthwith send a copy to his immediate official superior, before proceeding to take action in terms of clauses (a) to (d) of section 42(1).

(b)    But if the information was received when the officer was not in the police station, but while he was on the move either on patrol duty or otherwise, either by mobile phone, or other means, and the information calls for immediate action and any delay would have resulted in the goods or evidence being removed or destroyed, it would not be feasible or practical to take down in writing the information given to him, in such a situation, he could take action as per clauses (a) to (d) of section 42(1) and thereafter, as soon as it is practical, record the information in writing and forthwith inform the same to the official superior.

(c)     In other words, the compliance with the requirements of Sections 42 (1) and 42(2) in regard to writing down the information received and sending a copy thereof to the superior officer, should normally precede the entry, search and seizure by the officer. But in special circumstances involving emergent situations, the recording of the information in writing and sending a copy thereof to the official superior may get postponed by a reasonable period, that is after the search, entry and seizure. The question is one of urgency and expediency.

(d)    While total non-compliance of requirements of sub-sections (1) and (2) of section 42 is impermissible, delayed compliance with satisfactory explanation about the delay will be acceptable compliance of section 42. To illustrate, if any delay may result in the accused escaping or the goods or evidence being destroyed or removed, not recording in writing the information received, before initiating action, or non-sending a copy of such information to the official superior forthwith, may not be treated as violation of section 42. But if the information was received when the police officer was in the police station with sufficient time to take action, and if the police officer fails to record in writing the information received, or fails to send a copy thereof, to the official superior, then it will be a suspicious circumstance being a clear violation of section 42 of the Act. Similarly, where the police officer does not record the information at all, and does not inform the official superior at all, then also it will be a clear violation of section 42 of the Act. Whether there is adequate or substantial compliance with section 42 or not is a question of fact to be decided in each case. The above position got strengthened with the amendment to section 42 by Act 9 of 2001.

Reference answered in the manner aforesaid.

(Para 17)

A. Indian Evidence Act, 1872 (1 of 1872), Section 4 -- May presume – Shall Presume – Section 4 of Evidence Act inter-alia defines the words ‘may presume’ and ‘shall presume as follows:-

“(a) ‘may presume’ – Whenever it is provided by this Act that the Court may presume a fact, it may either regard such fact as proved, unless and until it is disproved or may call for proof of it.

(b) ‘shall presume’ – Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved.”

In the former case the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved.

(Para 9)

B. Negotiable Instruments Act (26 of 1881), Section 118, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 3 – Cheque against consideration -- Legally enforceable debt or liability – Presumption -- Rebuttal – In a trial u/s 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted -- As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused -- Presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability -- A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

(Para 10)

C. Negotiable Instruments Act (26 of 1881), Section 118, 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 4 – Cheque against consideration -- Legally enforceable debt or liability – Presumption -- Rebuttal – Phrase “until the contrary is proved” read with definitions of “may presume” and “shall presume” as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable.

(Para 11)

D. Negotiable Instruments Act (26 of 1881), Section 118, 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 4, 114 – Rebuttal of presumption – Accused in a trial u/s 138 of the Act has two options – He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed – To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial – Court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated – At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused – Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant.

-- To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist.

-- Accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant – Accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act.

-- Accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial.

Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant’s rescue.

(Para 11)

E. Negotiable Instruments Act (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4), 386 -- Acquittal by trial court – Conviction in appeal by High Court – Sentence to accused -- High Court, after convicting the appellant u/s 138 of the Act, remitted the matter to the learned Magistrate for passing appropriate order of sentence – Held, this course, is unknown to law -- Powers of the Appellate Court, in an appeal from an order of acquittal, are enumerated in Section 386(a) of the Code of Criminal Procedure, 1973 -- Powers do not contemplate that an Appellate Court, after recording conviction, can remit the matter to the trial court for passing appropriate order of sentence -- Judicial function of imposing appropriate sentence can be performed only by the Appellate Court when it reverses the order of acquittal and not by any other court -- Procedure adopted by the High Court not approved.

(Para 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- Cause of action – Third demand notice -- First notice having not been served and the second notice having been withdrawn in terms of the reply of appellants/ accused, the complainant cannot be said to have committed any illegality in presenting the cheque for the third time and issuing the third notice upon the defaulter -- Issuance of a valid notice calling upon the drawer of the cheque to pay the amount in question and the appellants' failure to pay to the complainant the amount in question within a period of 15 days from the date of receipt of a copy of the said notice upon them, a cause of action arose for filing a complaint petition – Held, cause of action for filing a complaint arose only once and not more than once.

(Para 33)

Indian Penal Code, 1860 (45 of 1860), Section 379,406,409,418,506,34 –  Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Business related disputes – Compromise quashing of FIR – Dispute arose out of extensive business dealings between the parties -- Absolutely no public policy involved in the nature of the allegations made – Held, where the question involved is of a purely personal nature, the Court should ordinarily accept the terms of the compromise even in criminal proceedings – Keeping the matter alive with no possibility of a result in favour of the prosecution is a luxury which the Courts, grossly overburdened as they are, cannot afford and that the time so saved can be utilized in deciding more effective and meaningful litigation – FIR u/s 379,406,409,418,506/34 IPC and all proceedings therewith quashed.

(Para 2-5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Demand Notice for payment – Mandatory in nature -- Object of – Object of the proviso is to avoid unnecessary hardship to an honest drawer -- Giving a notice to the drawer before filing complaint u/s 138 of the Act is a mandatory requirement.

(Para 6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 -- Demand Notice for payment – Serviced of notice -- Presumption of – Cause of action -- Where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the G.C. Act would be attracted -- Requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque -- Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address.

(Para 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 – Demand Notice for payment – Service of notice – Presumption of -- Pleadings – Requirement of -- Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post – It is not necessary to aver in the complaint u/s 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved -- Complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque.

(Para 14, 15)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 -- Demand Notice for payment – Service of notice – Presumption of – Rebuttal of -- At the time of taking cognizance of the complaint u/s 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the mandatory statutory procedural requirements have been complied with -- It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect.

(Para 15)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 -- Demand Notice for payment – Service of notice – Presumption of – Rebuttal of – Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint u/s 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected -- A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint u/s 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act.

(Para 17)

A. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Negligence – Tort – Medical Negligence -- Criminal liability -- Negligence is the breach of a duty caused by omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do – Negligence becomes actionable on account of injury resulting from the act or omission amounting to negligence attributable to the person sued – Essential components of negligence are three: ’duty’, ’breach’ and ’resulting damage’.

--       Negligence in the context of medical profession necessarily calls for a treatment with a difference. To infer rashness or negligence on the part of a professional, in particular a doctor, additional considerations apply. A case of occupational negligence is different from one of professional negligence.

--       A simple lack of care, an error of judgment or an accident, is not proof of negligence on the part of a medical professional.

--       So long as a doctor follows a practice acceptable to the medical profession of that day, he cannot be held liable for negligence merely because a better alternative course or method of treatment was also available or simply because a more skilled doctor would not have chosen to follow or resort to that practice or procedure which the accused followed.

--       When it comes to the failure of taking precautions what has to be seen is whether those precautions were taken which the ordinary experience of men has found to be sufficient; a failure to use special or extraordinary precautions which might have prevented the particular happening cannot be the standard for judging the alleged negligence.

--       Standard of care, while assessing the practice as adopted, is judged in the light of knowledge available at the time of the incident, and not at the date of trial.

--       When the charge of negligence arises out of failure to use some particular equipment, the charge would fail if the equipment was not generally available at that particular time (that is, the time of the incident) at which it is suggested it should have been used.

(Para 51 (1)(2))

B. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Medical negligence – Tort – Criminal liability -- A professional may be held liable for negligence on one of the two findings: either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess -- Standard to be applied for judging, whether the person charged has been negligent or not, would be that of an ordinary competent person exercising ordinary skill in that profession -- It is not possible for every professional to possess the highest level of expertise or skills in that branch which he practices -- A highly skilled professional may be possessed of better qualities, but that cannot be made the basis or the yardstick for judging the performance of the professional proceeded against on indictment of negligence -- Test for determining medical negligence as laid down in Bolam’s case [1957] 1 W.L.R. 582, 586 holds good in its applicability in India.

(Para 51 (3)(4))

C. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Medical negligence – Tort – Criminal liability – Mens-rea -- Res ipsa loquitur  -- Jurisprudential concept of negligence differs in civil and criminal law -- What may be negligence in civil law may not necessarily be negligence in criminal law -- For negligence to amount to an offence, the element of mens rea must be shown to exist -- For an act to amount to criminal negligence, the degree of negligence should be much higher i.e. gross or of a very high degree -- Negligence which is neither gross nor of a higher degree may provide a ground for action in civil law but cannot form the basis for prosecution.

--       The word ’gross’ has not been used in Section 304A of IPC, yet it is settled that in criminal law negligence or recklessness, to be so held, must be of such a high degree as to be ’gross’. The expression ’rash or negligent act’ as occurring in Section 304A of the IPC has to be read as qualified by the word ’grossly’.

--       To prosecute a medical professional for negligence under criminal law it must be shown that the accused did something or failed to do something which in the given facts and circumstances no medical professional in his ordinary senses and prudence would have done or failed to do. The hazard taken by the accused doctor should be of such a nature that the injury which resulted was most likely imminent.

--       Res ipsa loquitur is only a rule of evidence and operates in the domain of civil law specially in cases of torts and helps in determining the onus of proof in actions relating to negligence. It cannot be pressed in service for determining per se the liability for negligence within the domain of criminal law. Res ipsa loquitur has, if at all, a limited application in trial on a charge of criminal negligence.

(Para 51 (5-8))

D. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 154,156,190 -- Medical negligence – Tort – Criminal liability -- Guidelines - re: prosecuting medical professionals -- Statutory Rules or Executive Instructions incorporating certain guidelines need to be framed and issued by the Government of India and/or the State Governments in consultation with the Medical Council of India -- So long as it is not done, Court propose to lay down certain Guidelines for the future which should govern the prosecution of doctors for offences of which criminal rashness or criminal negligence is an ingredient :

--       A private complaint may not be entertained unless the complainant has produced prima facie evidence before the Court in the form of a credible opinion given by another competent doctor to support the charge of rashness or negligence on the part of the accused doctor.

--       Investigating officer should, before proceeding against the doctor accused of rash or negligent act or omission, obtain an independent and competent medical opinion preferably from a doctor in government service qualified in that branch of medical practice who can normally be expected to give an impartial and unbiased opinion applying Bolam’s test to the facts collected in the investigation.

--       A doctor accused of rashness or negligence, may not be arrested in a routine manner (simply because a charge has been levelled against him). Unless his arrest is necessary for furthering the investigation or for collecting evidence or unless the investigation officer feels satisfied that the doctor proceeded against would not make himself available to face the prosecution unless arrested, the arrest may be withheld.

(Para 55)

E. Indian Penal Code, 1860 (45 of 1860), Section 304-A, 34 – Medical negligence – Tort – Criminal liability -- Criminal rashness or negligence -- It is not the case of the complainant that the accused-appellant was not a doctor qualified to treat the patient whom he agreed to treat -- It is a case of non-availability of oxygen cylinder either because of the hospital having failed to keep available a gas cylinder or because of the gas cylinder being found empty -- Then, probably the hospital may be liable in civil law but the accused appellant cannot be proceeded against under Section 304A IPC on the parameters of Bolam’s test -- Prosecution of the accused appellant under Section 304A/34 IPC is quashed.

(Para 56, 57)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 204, 239, 252, 482 -- Cheque bounce case – Cognizance by Magistrate -- Summoning of acused – Interlocutory order – Discharge/ Recalling application – Remedy of -- Once the plea of the accused is recorded u/s 252 of the Code the procedure contemplated under Chapter XX (Cr.P.C.) has to be followed which is to take the trial to its logical conclusion -- Only remedy available to an aggrieved accused to challenge an order in an interlocutory stage is the extraordinary remedy u/s 482 of the Code and not by way of an application to recall the summons or to seek discharge which is not contemplated in the trial of a summons case.

(Para 16, 17)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 5 -- Bill of exchange – Bill of exchange is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand.

(Para 17)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 5, 6 -- Bill of exchange – Cheque -- A ‘cheque is a bill of exchange drawn on a bank by the holder of an account payable on demand -- A ‘post-dated cheque is not payable till the date which is shown thereon arrives and will become cheque on the said date and prior to that date the same remains bill of exchange.

(Para 17)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 6, 138 – Cheque bounce complaint – Post dated cheque – For prosecuting a person for an offence u/s 138 of the Act, it is inevitable that the cheque is presented to the banker within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier – Post-dated cheque becomes a cheque within the meaning of Section 138 of the Act on the date which is written thereon -- Six months period shall be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee.

(Para 18)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque by Company -- Demand notice to Director of Company – Validity of – Demand notice to Director of Company, who signed the cheque -- High Court committed error in recording a finding that there was no notice to the drawer of the cheque, as required u/s 138 of the NI Act – Held, Impugned order of the High Court is liable to be quashed.

(Para 1, 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque by Company -- Offence by Company – Deposit of money in court – Quashing of proceedings – Permissibly of -- Once the offence is committed, any payment made subsequent thereto will not absolve the accused of the liability of criminal offence, though in the matter of awarding of sentence, it may have some effect on the Courts trying the offence -- But by no stretch of imagination, a criminal proceeding could be quashed on account of deposit of money in the Court.

(Para 8)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cause of action -- Pre-mature filing of complaint – Cognizance by Magistrate -- "Taking cognizance of an offence" by the Court has to be distinguished from the filing of the complaint by the complainant -- Taking cognizance would mean the action taken by the Court for initiating judicial proceedings against the offender in respect of the offence regarding which the complaint is filed – Mere presentation of the complaint in the Court cannot be held to mean that its cognizance had been taken by the Magistrate -- If the complaint is found to be pre-mature, it can await maturity or be returned to the complainant for filing later and its mere presentation at an earlier date need not necessarily render the complaint liable to be dismissed or confer any right upon the accused to absolve himself from the criminal liability for the offence committed.

(Para 8-10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Presentation of complaint – Cognizance by Magistrate -- Complaint was returned to the complainant/ appellant on the ground that the verification was not signed by the counsel, could not be termed to be an action of the Magistrate taking cognizance within the meaning of Section 142 of the Act.

(Para 11)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Sick Industrial Companies (Special Provisions) Act (1 of 1986), Section 22 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Constitution of India, Article 227 -- Dishonour of Cheque -- Prosecution of the Company/ Directors – SICA proceedings -- Maintainability of complaint u/s 138 of NI Act -- Section only creates an embargo against disposal of assets of the company for recovery of its debts -- Purpose of such an embargo is to preserve the assets of the company from being attached or sold for realisation of dues of the creditors -- Section does not bar payment of money by the company or its directors to other persons for satisfaction of their legally enforceable dues -- Section 22 SICA does not create any legal impediment for instituting and proceeding with a criminal case on the allegations of an offence u/s 138 of the NI Act against a company or its Directors.

(Para 18)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Sick Industrial Companies (Special Provisions) Act (1 of 1986), Section 22-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Constitution of India, Article 227 -- Dishonour of Cheque -- Prosecution of the Company/ Directors – Company declared Sick -- Maintainability of complaint u/s 138 of NI Act -- In a case in which the BIFR has submitted its report declaring a company as ‘sick’ and has also issued a direction u/s 22-A restraining the company or its directors not to dispose of any of its assets except with consent of the Board then the contention raised that a criminal case for the alleged offence u/s 138 NI Act cannot be instituted during the period in which the restraint order passed by the BIFR remains operative cannot be rejected outright -- Whether the contention can be accepted or not will depend on the facts and circumstances of the case -- For instance, before the date on which the cheque was drawn or before expiry of the statutory period of 15 days after notice, a restraint order of the BIFR u/s 22-A was passed against the company then it cannot be said that the offence u/s 138 NI Act was completed -- In such a case it may reasonably be said that the dishonoring of the cheque by the bank and failure to make payment of the amount by the company and/or its Directors is for reasons beyond the control of the accused -- In such circumstances it would be unjust and unfair and against the intent and purpose of the statute to hold that the Directors should be compelled to face trial in a criminal case.

(Para 19, 20)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Demand notice for payment – Additional claim in demand notice -- Effect of – If in a notice any other sum is indicated in addition to the cheque amount the notice cannot be faulted.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Presumption -- Additional claim in demand notice -- Presumption u/s 139 of NI Act would arise only in respect of the cheque amount -- Regarding other claims, a civil suit would be necessary.

(Para 10-13)