Moratorium period – Corporate debtor – Natural persons -- Moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act -- Section 138/141 proceeding against a corporate debtor is covered by Section 14(1)(a) of the IBC.

(SC) Decided on: 01.03.2021

Cheque bounce case -- Cheque issued by Company – If the person who commits an offence u/s 138 of the Act is a company, the company as well as other person in charge of or responsible to the company for the conduct of the business of the company at the time of commission of the offence is deemed to be guilty of the offence -- Thus, it creates a constructive liability on the persons responsible for the conduct of the business of the company.

(SC) Decided on: 06.04.2016

Cheque bounce case -- To constitute the criminal liability the complainant is required to show that a cheque was issued; that it was presented in the bank in question; that on due presentation, it was dishonoured; that, as enshrined in the provision, requisite notice was served on the person who was sought to be made liable for criminal liability; and that in spite of service of notice, the person who has been arraigned as an accused did not comply with the notice by making payment or fulfilling other obligations within the prescribed period, that is, 15 days from the date of receipt of notice.

(SC) Decided on: 06.04.2016

Cheque bounce case -- Advance payment by way of cheques – Dishonour of – If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability u/s 138.

(SC) Decided on: 07.04.2014

Cheque bounce case -- Advance payment cheques – Dishonour of -- Subsisting debt – Nature of -- For a criminal liability to be made out u/s 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheques -- View that issuance of cheques towards advance payment at the time of signing contract has to be considered as subsisting liability and dishonour of such cheques amounts to an offence under Section 138 of the N.I. Act is not acceptable -- If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, the cheque cannot be said to have been drawn for an existing debt or liability.

(SC) Decided on: 07.04.2014