9911796707
TMI Blog2002 (7) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... and is governed by the Rules and Regulations thereof. In the year 1995, the Company is said to have started accepting Fixed Deposits in lieu of which it promised to give interest at the rate of 15 per cent per annum to all the investors. It appears that due to CRB Capital Market Scam in the year 1997, all the investors in the country lost faith in Non-Banking Finance Companies. As a result, the company decided to stop accepting fresh deposits as well as renewing matured deposits. The Company has closed down nearly 60 of their 90 branches all over the country. Several depositors presented applications under section 45 QA of the Reserve Bank of India Act, 1934 before the Company Law Board, praying for a direction to the Company to make the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to have been received on 2-2-1998. Thereafter, he presented the complaint which has been numbered as C.C. No. 145/98. 3. Aggrieved by the same, the petitioner representing the Company filed the Criminal Petition. 4. The learned counsel for the petitioner assails the proceedings on the ground that the document issued is not a cheque and it is only a demand warrant. It is also contended that cheque is defined under section 6 of N.I. Act and demand warrant does not come within the said definition. The learned Public Prosecutor contends that in the complaint the word cheque has been used. Therefore, it must be taken as cheque only. 5. Adverting to the said contentions, cheque is defined under section 6 of N.I. Act. It r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Fixed Deposit receipt or interest warrant will come under the definition of cheque and whether it constitute an offence. It is observed in the book Introduction to Negotiable Instruments by James Mc Loughlin in 1975 edition, at page : 130 as follows : "A customer may authorize his banker to make payment from his account by instruments which are not cheques. These may be valid orders, and the banker may be in breach of contract with his customer if he fails to comply, but they will not have the characteristics of negotiable instru-ments . . . Commentary about the definition of a cheque under section 6 of N.I. Act reads as follows : The touchstone by which a cheque is that it must be payable instantly on demand. This is brought ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a third party to pay a stated sum of money at a designated future date or on demand. A Cheque on the other hand, is a bill of exchange drawn on a bank by the holder of an account payable on demand. Thus, a cheque under section 6 of the Act is also a bill of exchange but it is drawn on a banker and is payable on demand. It is, thus, obvious that even though a bill of exchange is drawn on a banker, if it is not payable on demand, it is not a cheque. Therefore, an order issued by the District Board Engineer on the Government Treasury is not a cheque, as the Government is not a bank carrying on business for profit. It has been held that an instrument is not precluded from being a cheque by reason of the fact that it is drawn by a banker o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is stated as ready money in the hands of the banker, and in giving the order to appropriate to a creditor, the person giving the cheque must be considered as the person primarily liable to pay who orders his debt to be paid at a particular place, and as being much in the position of the maker of a promissory note or the acceptor of a bill of exchange payable at a particular place, and not elsewhere, who has no right to insist on immediate presentment at that place. ( e )A cheque is not noted or protested for dishonour and is generally inland; and ( f )In respect of crossed cheques there is protection given to the banker which is peculiar to these instruments." 7. The entire dispute in issue depends upon interpretation to be put on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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