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2003 (2) TMI 402 - HC - Companies Law

Issues:
Petitioners challenging the legality of the order issuing process against them for attending court in cases related to section 138 of the Negotiable Instruments Act, 1881.

Analysis:
The judgment dealt with two criminal prosecutions initiated against the petitioners concerning two cheques, one for Rs. 25 lacs and the other for Rs. 3,30,000, drawn on the same day and dishonored later. The Magistrate issued process against the petitioners based on these complaints. The counsel for the petitioners relied on a Supreme Court judgment emphasizing the importance of presenting negotiable instruments within six months at the bank on which they are drawn to avoid criminal complaints against the drawer.

The counsel argued that the complainant presented the cheques in a different bank than the one they were drawn on, leading to their dishonor, and hence, the complaints should have been dismissed. On the other hand, the respondent's counsel contended that in commercial transactions, delays in processing cheques are common, and the complainant acted in good faith by presenting the cheques promptly. The judgment highlighted the obligation of drawees to present cheques within the stipulated time and at the correct bank, emphasizing the need for prudent decision-making in commercial activities to avoid legal consequences.

The Court noted that the Magistrate erred in not considering the Supreme Court judgment, leading to the issuance of illegal orders and the decision to conduct trials against the petitioners. Consequently, the Court invoked its jurisdiction under relevant legal provisions and quashed the orders, exonerating the petitioners from the prosecutions. The petitioners were relieved from attending court for the summons, and no costs were imposed. The ruling emphasized the importance of adhering to legal provisions and making informed decisions in commercial transactions to avoid adverse outcomes.

 

 

 

 

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