2019 (5) TMI 1511 - HC - Indian Laws

Amicable settlement between the parties - validity of notice issued u/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - dishonor of cheque - HELD THAT - Learned counsel for the petitioners has not disputed that the said cheque issued for ₹ 30 lakhs by the petitioner was dishonoured due to the default of petitioner No.1. The bonafides of the petitioners are totally lacking in this writ petition - no ground for exercising the extra ordinary writ jurisdiction of this Court under Articles 226/227 of the Constitution of India is made out - petition dismissed.

Summary

Issues:
Challenge to notices issued under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis:
The judgment pertains to a writ petition filed seeking the quashing of notices dated 18.06.2018 and 27.10.2017 issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner had issued a cheque for ?30 lakhs which was dishonored, leading to legal proceedings under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881. During the proceedings, there was a mention of a possible amicable settlement between the parties. However, the petitioner did not dispute the dishonor of the cheque due to their default. The court found that the bonafides of the petitioners were lacking, and hence, dismissed the petition as there was no ground for the exercise of extraordinary writ jurisdiction under Articles 226/227 of the Constitution of India.

This judgment highlights the importance of upholding legal obligations, especially in financial matters such as honoring cheques. The court emphasized that the lack of bonafides on the part of the petitioners was a crucial factor in dismissing the petition. It underscores the principle that individuals must fulfill their financial commitments and obligations as per the law. The judgment serves as a reminder of the consequences that may arise from defaulting on financial instruments like cheques, and the need for parties to act in good faith during legal proceedings. The decision reinforces the legal framework surrounding dishonored cheques and the consequences that follow such actions, emphasizing the need for compliance with legal obligations to maintain the integrity of financial transactions.