2009 (4) TMI 900 - SC - Companies Law

Whether appellants conviction for an offence relating to Section 138 of the Negotiable Instruments Act, 1881 correct? Held that - When the factual background of the present case is considered in the light of the principles referred to in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Another 2007 (2) TMI 311 - SUPREME COURT OF INDIA the inevitable conclusion is that the appeal is bound to succeed. The conviction as recorded cannot be maintained.

Summary

The Supreme Court of India's judgment states that the challenge in the appeal is against the Madhya Pradesh High Court's judgment dismissing the revision application of the appellant, who was convicted under Section 138 of the Negotiable Instruments Act. The appellant, a General Manager, received four cheques from a co-accused, which were dishonored. Despite the appellant's claim of not being responsible for the business conduct, the lower courts upheld his conviction. The appellant argued that there was no evidence of his involvement and no notice was given to him. The court referred to previous cases to establish that liability under Section 138 requires specific averments. Ultimately, the court allowed the appeal, stating that the conviction could not be maintained.