9911796707
TMI Blog1998 (9) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... rt orders received by the company. Though a statutory notice was served on the company under section 434 of the Companies Act, 1956, no reply was sent and consequently the present company petition. An affidavit has been filed on behalf of the company by one Mr. Dattat-raya Sondekar. In paragraph 3( b ) of the affidavit, it has been alleged that in terms of the agreement of understanding between the petitioners and the company, the petitioners were fully secured before, during and after the export by hypothecation of goods and other securities as set out therein. This included a direct assignment of the monies payable by Neptune General Trading, the foreign party, by drawing a bill of exchange directly in favour of the petitioners and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the cheque dated March 29, 1997, which was dishonoured by forwarding letter of March 27, 1997. The bills of exchange which are purchased, it is pointed out, are much earlier to the issuance of the cheque On behalf of the company it is contended that it is true that the company availed of the packing credit facility. It is further pointed out that there was a novation of the contract inasmuch as the petitioners after having purchased the bills were directly to deal with Neptune General Trading. Attention is invited to instructions given by the petitioners to their bankers abroad to remit the money received in favour of the petitioners' account in New York. In the light of that it is contended that there is no amount due and payable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conduct can it be said that a new contract came into existence. On the contrary the company by their letter of March 27, 1997, forwarded a cheque in the amount of Rs. 3,37,65,064 to the petitioners. This must destroy the contention of the company that there was a novation of contract. Section 118 of the Negotiable Instruments Act is the section pertaining to presumptions. One of the presumptions is that every negotiable instrument was made or drawn for consideration and that every such instrument where it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration. Apart from that by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque is liable for the amount due and payable unless the presumption is rebutted. It could perhaps be argued that this presumption is limited to a criminal offence and can only be rebutted before the court when the criminal proceedings are initiated. At any rate it has the same effect as section 118 of the Act. In the instant case, it is pointed out that in the affidavit filed by the company the only explanation given is that the cheque was not to be presented. The explanation cannot be accepted as the cheque was forwarded by letter dated March 27, 1997. No such explanation was set out in the said letter or for that matter any other contention. It is also contended on behalf of the company that no notice of dishonour was given by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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