"Sufferer"/ "Aggrieved Party" / "Non-Defaulter": Be Ready to Run for Recovering Money

Courts and Legislative wants the “Sufferer”/”Aggrieved Party”/Non-Defaulter” to do all homework for Recovery and Long Lasting Process and Ensuring of giving peace to Accused
The Purpose of Law is to ensure Sufferer gets justice but it seems that in recovery of money, the Law and Courts are ensuring and assuring the Peace and Long Lasting Time to Defaulter to come to the Court as if IBC was not enough to take away the rights of Awards passed in MSME and or Arbitration and or Decree via Courts.
Section 138 of Negotiable Instrument Act provides for the compensation to the complainant, and it also allows for the parties to reach a compromise during the pendency of a complaint. It encourages parties to settle disputes through the ultimate closure of the case rather than protracted litigation.
Ingredient of offence- drawing the cheque:
• Presentation of the cheque to the bank,
• Returning the cheque unpaid by the drawee bank,
• Giving notice in writing to the drawer of the cheque demanding payment of cheque amount
• Failure of the drawer to make payment within 15 days of receipt of the notice.
Recently the IN THE SUPREME COURT OF INDIA, CRIMINAL APPELLATE JURISDICTION, CRIMINAL APPEAL NO(S). 1206 OF 2021 (Arising out of SLP(Criminal) No(s). 7573 of 2014) ASHUTOSH ASHOK PARASRAMPURIYA & ANR (APPELLANT(S)) Vs M/S. GHARRKUL INDUSTRIES PVT. LTD. & ORS …RESPONDENT(S) = CRIMINAL APPEAL NO(S). 1207 OF 2021 (Arising out of SLP(Criminal) No(s). 9520 of 2014) = By Rastogi, J. = NEW DELHI = OCTOBER 08, 2021 has passed the Order of stating that “Summons To Directors Justified If Complaint Avers That They Were In and Responsible of Business Of Company” and the brief of the case is as under:
The case is of the complaint of a Private Limited Company which is engaged in the business of production and sale of spices named M/s Gharkul Industries Pvt Ltd and its directors. The Applicants approached the respondents for financial assistance. The two being well-known by each other, respondents provided financial assistance. The parties involved executed a Memorandum of Understanding with consent of all applicants and it was decided that the amount that was received would be returned within 1 or 2 years. An amount of Rs 1,50,19,831 was received by the applicants. On August 18, 2010, a letter was issued to the concerned applicants demanding their balance-sheet. It showed that as on 31/3/2012, the outstanding balance of the company was Rs. 1,49,94,831/-.
According to the Respondents, the Directors of the company are responsible for the conduct of the business of the company. Hence, they should be held responsible for the affairs of the company. Further on 2/6/2012, the Company issued a cheque in favour of respondent No. 1 for encashment of the said amount. However, the said cheque was dishonoured due to funds not sufficient.
The Respondents filed a complaint against the applicants under Section 138 of the said Act. The learned Trial Court issued the summons in the name of the applicants for the offences punishable under Section 138 of the NIA.
The Applicants filed a criminal application before the High Court praying for quashing and setting aside the criminal complaint filed by Respondent No. 1 as well as the summons issued by the learned Trial Court in pursuance of the complaint. The High Court affirmed the decision of the Trial Court. The Respondent approached the Supreme Court.
The Supreme Court held that a person who has issued a bounced cheque does not sufficiently become liable referring the ruling of SMS Pharmaceuticals Ltd. v. Neeta Bhalla and Another.
The person can be held liable only when he’s been in charge of the actions of the company at the time of their alleged wrongdoing. The Court explained that in order for a process to be initiated against a director, it is necessary to aver that the directors were in charge of the company’s business at the time of the offence under Section 138 read with Section 141 of the NI Act.
The Court noted that averment is very important because it is the basic averment that persuades the Magistrate to issue process against a Director. In cases where the basic allegation of a case is missing, a Magistrate may be justified in not issuing a process order, the Bench noted.
The Court has also ruled that before a Director is summoned for trial in a case, the Court must be satisfied that there is no prima facie evidence that shows that the Director was not involved in the issuing of cheques. The court noted that even if the basic allegation is there, the court may come to the conclusion that no case has been made out against the accused Director.
The Supreme Court has held that the Directors of a company were not signatories to the company’s cheques. However, it is clear that the allegations are that at the time of the cheques being issued and dishonoured, the Directors were responsible for the company’s business, the court noted.
The context of this case is that now the Person who is filing the case under Section 138 has to ensure and is being presumed of assumption that the Complainant shall be aware of which Director signed the Cheque, who were taking care of the business and others and if not, then Section 138 cannot be filed. This is purely ridiculous for reasons that a business person has to do business and there is no way of such person being given the information as to who has signed and who is responsible and such in this case, the whole concept of Section 138 for Business is ZEROED. The Laws off late and Judgements has just been getting more technical and infact making the Aggrieved Party to run and chase Accused and there is no balance being made. For reasons, even after getting Order against Accused and Accused don’t pay, the only option is Decree and for that it takes a year or two years and then if done, then it is the duty of the Complainant to know the Property Details to get attached and to find out it is next to impossible. There is no way the Courts and Laws intent to make simpler way for recovery of money which is very sad and damn bad
The Law is with Accused/ Default Party- how fair is this?
The law is with accused and default party which means that the Constitution never denies any right to anyone be it accused or victim in other words laws are uniform to every citizen. Article 21 of the Indian Constitution states that. “No person shall be deprived of his life or personal liberty except according to procedures established by law.”
Yet the question arises is it fair?
How fair is the law when it comes to practicality? They say the framers of the constitution have framed laws which wouldn’t discriminate anyone with regards to gender, caste, religion, class etc. or even accused yet in the case of Ashutosh Ashok Parasrampuriya & ANR. V.s Ms. Gharrkul Industries Pvt. Ltd & Ors, the Supreme Court held that a person who has issued a bounced cheque does not sufficiently become liable referring the ruling of SMS Pharmaceuticals Ltd. v. Neeta Bhalla and Another.
The person can be held liable only when he’s been in charge of the actions of the company at the time of their alleged wrongdoing. The Court explained that in order for a process to be initiated against a director, it is necessary to aver that the directors were in charge of the company’s business at the time of the offence under Section 138 read with Section 141 of the NI Act.
Section 141 of Negotiable Instruments Act shows that person who is in charge or responsible to the company is by act liable and deemed to be guilty only if offence is committed with his consent or due to any neglect on his part. Similar is the case with any Director, Manager, Secretary or other officer of company. If such person shows that offence was committed without his knowledge or that he had exercised due diligence to prevent commission of such offence, he may be immune from prosecution.
Here the Director has a scope by manipulating the respondent by withdrawing his or her responsibility in company and getting away by the crime. The aggrieved party or the entrepreneur not only loses faith in company but towards law too.
Today Trial Court’s main aim is to ascertain truth to the victims, accused society in large. Every person has the right to be treated and dealt fairly. Denial of trial is denial of justice. Our constitution has enshrined the right to defend under Article 21 of Constitution of India. Our country follows the principal of every accused is presumed to be innocent until proved guilty. At the same time if accused is found threat to society is held in custody for the time being.
Today the right to a reasonable trial isn’t unused, but the quality and nature of the challenge. The number of individuals specifically included in criminal equity is developing as new cases are emerging every day. Countries develop faster mechanisms for imposing sanctions, usually without trial; “international war terrorism” and the erroneous political rhetoric of “re-aligning” criminal justice systems to make us safer have a negative impact; dictators and dictatorial regimes find new ways to use criminal justice as a tool of oppression; and human rights are facing new threats from increasing cross-border cooperation to fight crime.
We are working toward a worldwide objective. We can’t get there overnight, and we can’t do it for ourselves. But with each step we take towards our vision of a world where everybody is entitled to a reasonable trial, we ensure individuals from the manhandle of equity and make reasonable and compelling criminal equity frameworks that advantages all.
The existence of corporation in the commercial world is almost like a money hunger. Today MNC see nothing but profit so is the laws made in favour of them. Assume a Chief of a company being charged beneath section 141 of NI Act but court rules out the judgment in support of Chief by expressing that the offence was committed without Executive’s information or that he had worked out due perseverance to avoid commission of such offence, he may be safe from arraignment. In any case, how is that the executive of a company where each detail of company rotates around him/her isn’t dependable for the previously mentioned offence? For occurrence when a bargain is marked between a company and person, how can a person know which chief signed the cheques, how can one anticipate the person to be mindful of each individual of company. It’s the court function that ought to examine the reality. This tosses an impressive sum of address on the composers of the law, for making this law so one-sided which should be transformed for demonstrating its straightforwardness towards society.
 Hence, the saying law is with accused and default party may not be reasonable because it is obtrusively made a law which makes the accused free. What must be taken into consideration is the legitimate saying Audi Alteram Partem which suggests listen both the side but too make law which is uniform for both parties.
Law is Equal “as said by Courts and Parliament”, Let’s find out how and where for Business Entrepreneurs


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