‘In joint a/c, liability is on person signing cheque’

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‘In joint a/c, liability is on person signing cheque’

Updated: July 2, 2013 01:20 IST

In case of issuance of cheque from joint accounts, only the person who signs the cheque can be prosecuted in a cheque bouncing case under Section 138 of the Negotiable Instruments Act, the Supreme Court held on Monday.

The other joint account holders cannot be prosecuted unless the cheque has been signed by them also, said a Bench of Justices P. Sathasivam and J.S. Khehar. The Bench said, “The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138 of the N.I. Act. The culpability attached to dishonour of a cheque can in no case, except in case of Section 141 of the N.I. Act (offences by companies), be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act.”

Writing the judgment, Justice Sathasivam distinguished between individuals and companies and said, “Section 141 of the N.I. Act is an instance of specific provision that in case an offence under Section 138 is committed by a company, the criminal liability for dishonour of a cheque will extend to the officers of the company …

“A company being a juristic person, all its deeds and functions are the result of acts of others. Therefore, the officers of the company, who are responsible for the acts done in the name of the company, are sought to be made personally liable for the acts which result in criminal action being taken against the company.”

In the instant case, the appellant Aparna A. Shah and her husband Ashish Shah were joint account holders and her husband issued a cheque for Rs. 25 crore from their joint account and it bounced due to insufficiency of funds. A trial court in Mumbai issued summons to the husband and wife. On appeal, the Bombay High Court had refused to quash the summons.

Source:http://www.thehindu.com/news/national/in-joint-ac-liability-is-on-person-signing-cheque/article4870405.ece

Power of Attorney holder can also file cheque bounce cases: Apex court

Power of Attorney holder can also file cheque bounce cases: Apex court
“Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal and competent.” The PoA holder, however, cannot file the cheque bounce case under his own name and such cases can be filed by the complainants through the PoA holders.“However, the PoA holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the transactions,”
Criminal Appeal No. 73 of 2007 with Criminal Appeal No. of 2013 (Arising out of S.L.P. (Crl.) No.2724
of 2008)-Decided on 13-9-2013.
A.C. NARAYANAN  VERSUS  STATE OF MAHARASHTRA & ANR.

SHRI G. KAMALAKAR  VERSUS M/S. SURANA SECURITIES LTD. & ANR. 

No recovery charges / collection charges @10% for recovery as arrears of land revenue under UP Z A & L R Act 1950

It has been seen that the concern authority invokes the provisions of UP Z A & L R Act 1950 to recover a sum recoverable as an arrear of land- revenue and charging cost of recovery @ 10% of the amount stated in the recovery certificate.

No recovery charges / collection charges @10% for recovery as arrears of land revenue under UP Z A & L R Act 1952 required to be paid henceforth.

Three judges bench (comprising Hon'ble R.K. Agrawal, J.Hon'ble S.P. Mehrotra, J. Hon'ble S.U. Khan, J.) of Hon’ble Allahabad High Court unanimously ruled on  09.01.2013 “If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act (i.e. U.P. Zamindari Abolition and Land Reforms Act, 1950) then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable” instead of collection charges at the rate of 10% of the amount stated in the certificate while deciding Writ C No. 56175 of 2011 titled as Mahrajwa and others vs. State of U.P. and others.

The aforesaid bench was constituted to decide following issue

“Whether decision in Mange Ram & Anr. Vs. State of U.P. & others, 2010 (2) CRC 216 in so far as it takes the view that there is no provision under any of the Acts for levying any  collection charges  for mere issuance of citation or sale proclamation is correct; or, the decision in Chinta Mani Vs. State of U.P. & Ors., 2011 (1) AWC 637 holding that provisions   of   sub-section   (2)   of   Section   279   do   not   contain   any provision for an absolute waiver of recovery charges where the citation has   been   issued   under   sub-section   (1)   and   the   charging   section empowers the Collector to raise such demand subject to the rules and provision of Revenue Recovery Act U.P. Act No.37 of 2001, is correct.”

While deciding aforesaid issue, the bench discussed extensively following laws on cost of recovery / recovery charges / collection charges 10% for recovery as arrears of land revenue:

1.    The Revenue Recovery Act, 1890

2.    U.P. Zamindari Abolition and Land Reforms Act, 1950,

3.    U.P. Zamindari Abolition and Land Reforms Rules, 1952

4.    The Uttar Pradesh Agricultural Credit Act, 1973.

5.    The Uttar Pradesh Agricultural Credit Rules, 1975.

At Page 20-21 of the attached judgment, the Hon’ble Court observed :

“From the scheme of 1890 Act, 1950 Act and 1973 Act as also 1952 Rules and 1975 Rules one thing is amply clear that while Sections 3 and 5 of 1890 Act and Rule 29 of 1975 Rules speak of  the cost of recovery to be realised along with the arrears it is necessarily to be understood and restricted to where the arrears have been recovered by the concerned authorities. If the authorities have not   been   able   to   recover   the   amount   of   arrears   through coercive process undertaken by them, then there is no question of realising the cost of recovery from the defaulter. The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears. In that event, there is no question of realising the cost of recovery/recovery charges from the defaulter either under the 1890 Act or under the 1975 Act. The provisions of Section 3 of the 1890 Act and Rule 29 of 1975 Rules have to be read accordingly”

After referring number of earlier judicial pronouncements of cost of recovery/recovery charges / collection charges 10% for recovery as arrears of land revenue, finally ruled:

“………… it is absolutely clear that it has to be seen as to under what Act the recovery has been initiated.

1.     Whether it is under 1890 Act, 1950 Act or 1973 Act.

2.     If the recovery proceedings have been initiated under 1890 Act then in that event if the recovery is being made under Section 3 of the Act then cost of recovery would be 10% of the amount stated in the certificate. However, if recovery certificate has been issued but no recovery had   been   made   by   the   State   authorities,   who   had   issued the   recovery certificate as for example the defaulter directly deposits the amount or therecovery certificate is withdrawn or cancelled for any reason whatsoever thenin that event there is no question of charging any costs of recovery. At best thefee for the  process mentioned in 1952 Rules can be levied. However, if the recovery certificate has been issued under Section 5 of 1890 Act then there is no question of any cost of recovery being realised as the State Government has not yet issued any notification specifying any rate.

                                                                                                                                   

3.    If the recovery has been issued under 1973 Act then in that case realisation of recovery charges by the State authorities can be made from the defaulter only where the entire amount had been recovered by the authorities of the State.

4.    If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act (i.e. U.P. Zamindari Abolition and Land Reforms Act, 1950) then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable.

Uttar Pradesh :revenue department:issuance of recovery certificate: 10% of total amount as collection / recovery charges

.....the cost of recovery to be realised along with the arrears it is necessarily to be understood and restricted to where the arrears have been recovered by the concerned authorities. If the authorities have not been able to recover the amount of arrears through coercive process undertaken by them, then there is no question of realising the cost of recovery from the defaulter. The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears. In that event, there is no question of realising the cost of recovery/recovery charges from the defaulter..............

....if recovery certificate has been issued but no recovery had been made by the State authorities, who had issued the recovery certificate as for example the defaulter directly deposits the amount or the recovery certificate is withdrawn or cancelled for any reason whatsoever then in that event there is no question of charging any costs of recovery............

specific performance of unregistered agreement to sell in UP

In State of U.P. by U.P. Civil Laws(Reforms and Amendment) Act 1976, U.P. Act No. 57 of 1976, Section 54 of Transfer of Property Act as amended in State of U.P. provides for every contract of sale of immovable property w.e.f. 1.1.77 to be made only by way of registered documents. Section 49 of Registration Act, as applicable to State of U.P. provides that no document required to be registered under Section 17 or by any provision of Transfer of property Act or of any other law in force, to be registered, shall effect any immovable property comprised therein, or be received as evidence of any transaction effecting such property or conferring such power or creating such right or relationship, unless it has been registered. Oral agreement to sell w.e.f. 01.01.77 in the State of U.P. qua sale of immovable property is not permissible and the same is not at all recognised in law. 

Civil Revision No. 22 of 2008 titled as Vasudeo Rao Getha and others Versus  Premendra Nath Singh and another 

Scope of consumer complaint

Subject: Scope of consumer complaint                                  Forum: The National Consumer Commission

Title:Poonam Chambers vs Aluplex India Ltd                      Case No.: FIRST APPEAL NO. 383 OF 2011                             Date of Decision:01-02-2013

Facts: OP was provided work contract and as OP left work without completing it, complainant terminated contract and got it completed from other agencies and filed complaint for recovery of amount due to deficiency of service.

Decision Fora below: Learned State Commission vide impugned order dismissed complaint at admission stage on the ground that contract was terminated by the complainant earlier to filing of complaint, hence, no relationship of consumer and service provider subsisted between the parties and there is no consumer dispute under Consumer Protection Act. 

National Commission said: “once the parties entered into a contract to provide service and the latter stopped work, the aggrieved party is entitled to file claim on account of deficiency of service even after termination of contract. Merely by termination of work contract it cannot be inferred that there was no relationship of consumer and service provider between the parties” at Para 6 and further at Para 7 “Merely because word ‘Commercial’ exists in the name of complainant, it cannot be inferred that work contract was given for commercial purposes”

no levying any collection charges for mere issuance of citation_WRIC(A)_56175_2011

Following question was referred to larger Bench to decide in WRIT - C No. - 56175 of 2011 titled as Mahrajwa And Others v State Of U.P. Thru Its Secy. And Others  by the Allahabad High Court:

Whether decision in Mange Ram & Anr. Vs. State of U.P. & Others, 2010 (2) CRC 216 in so far as it takes the view that there is no provision under any of the Acts for levying any collection charges for mere issuance of citation or sale proclamation is correct; or, the decision in Chinta Mani Vs. State of U.P. & Ors., 2011 (1) AWC 637 holding that provisions of sub-section (2) of Section 279 do not contain any provision for an absolute waiver of recovery charges where the citation has been issued under sub-section (1) and the charging section empowers the Collector to raise such demand subject to the rules and provision of Revenue Recovery Act U.P. Act No.37 of 2001, is correct.

Bench having three judges namely Hon'ble R.K. Agrawal, J., Hon'ble S.P. Mehrotra, J. and Hon'ble S.U. Khan, J. has said:

“The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears.” At page 20-21

……………………………………………….

Referring and discussing various judgment the bench said:

“From the aforesaid decisions, it is absolutely clear that it has to be seen as to under what Act the recovery  has been initiated. Whether it is under 1890 Act, 1950 Act or 1973 Act. If the recovery proceedings have been initiated under 1890 Act then in that event if the recovery is being made under Section 3 of the Act then cost of recovery would be 10% of the amount stated in the certificate. However, if recovery certificate has been issued but no recovery had  been  made  by  the  State  authorities,  who  had  issued  the  recovery certificate as for example the defaulter directly deposits the amount or the recovery certificate is withdrawn or cancelled for any reason whatsoever then in that event there is no question of charging any costs of recovery.” At page 23

…………………………………….        

We are, therefore, in respectful agreement with the view taken by this Court in the case of Mange Ram  &  Anr.(supra)  and  hold  that  the  decision  in  the  case  of  Chinta Mani(supra) does not lay down the correct law at page 24

Relevant judgment for Stamp Act as applicable in Uttar Pradesh

Relevant judgment for Stamp Act as applicable in Uttar Pradesh

1.    Stamp Act, 1899 - Section 47A (4)--Stamp duty--Deficiency--Penalty--Penalty imposed equivalent to amount of deficient duty--Merely because stamp duty paid by petitioner found to be deficient--Cannot by itself be ground for imposing penalty--Particularly in absence of any finding that there was intention to evade proper stamp duty--No reason assigned for imposing penalty of that quantum--No reflection of acting judicially--Penalty order quashed held in MANU/UP/2446/2011 Equivalent Citation: 2011 4 AWC3865 IN THE HIGH COURT OF ALLAHABAD: C.M.W.P. No. 20357 of 2011 Decided On: 07.04.2011

Appellants: Smt. Sonia Jindal Vs. Respondent: State of U.P. and others Hon'ble Judges:  Pankaj Mithal, J.

Subject: Civil Subject: Property        Acts/Rules/Orders:  Indian Stamp Act - Section 47A(4),   Indian Stamp Act - Section 47A(4A) Disposition:  Petition allowed

2.    Single judge of  Hon'ble Allahabad ad High court has ruled

"The sine qua non for invoking the provisions of Section 47-A(3) of the Act is that the Collector has reason to believe that the stamp duty has not been properly set forth in the instrument as per market value of the property. Once the instrument is registered and the prescribed stamp duty as prescribed by the Collector as has been paid, the burden to prove that the market value is more than the minimum as prescribed by the Collector under the rules, is upon the Collector. The report of the Sub Register or Tahsildar itself is not sufficient to discharge that burden."

Reference may also be taken of judicial pronouncement of Division Bench of  Hon'ble Allahabad  High Court in Kaka Singh v. Addl. Collector, AIR 1986 All 107 and it was held as follows in Para 17 of the report:

"We find force also in the argument of the petitioner's learned counsel that since Section 47A does not empower the Collector to Impose penalty in the event of his finding that the market value was not truly set forth in the instrument, such an order imposing the same would be beyond Section 47A. For imposing penalty in a case like the present, power was specifically to be conferred. In the absence of a specific provision made in that respect. It is not possible to uphold the contention of the standing counsel that penalty could be imposed whenever and wherever the Collector under Section 47A finds that the value set forth was not true. Section 47A as stated above, was brought in recently to cover a case of evasion. While enacting Section 47A, the Legislature although empowered the Collector to determine the market value of the property, which is the subject of conveyance and the duty payable thereon, it did not make any provision empowering the Collector to impose penalty."

3.    The same question was again considered by another Division Bench in Jugul Kishore v. State of U. P., AIR 1992 All 194 which after expressing agreement with the view taken in Kaka Singh (supra) held as follows in Paras 4 and 5 of the report :

"From a mere glance at sub-section (4) of Section 47A it is apparent that the Collector (A.D.M. Finance in the present case) does not have any power to Impose penalty in these proceedings.....

It is worthy of note that while enacting Section 47A, the Legislature did not authorise the Collector to impose any penalty. Under this provision the only power vested in the Collector was to determine the market value of the property and if he finds that the duty paid on the instrument in question is less than that payable on the correct market value of the property, he may order that the difference may be realised from the party to the Instrument."

4.    A bench of three judges of the Allahabad High Court answered the specific question having discussed various judgments

1) Whether in proceedings under sub-section (4) of Section 47A of the Act, penalty can also be imposed if the Collector holds that the market value of the property has not been truly set forth in the instrument and consequently, there is deficiency in stamp duty? in Girjesh Kumar Srivastava And ... vs State Of U.P. And Others on 8 December, 1997 Equivalent citations: 1998 (1) AWC 403, (1998) 1 UPLBEC 437 http://www.indiankanoon.org/doc/1989748/ says at Para 9:

"The law regarding fiscal matters being well settled, power to impose penalty must be conferred by the Statute itself. The language of Section 47A alone can be seen and such a power cannot be inferred by implication or by reference to some general words contained in the Rules. In absence of a specific provision to that effect the Collector is not empowered to impose penalty. The question is, therefore, answered in favour of the applicants and against the State."

5. The relevant part of the judgment of AIR 2001 SC 600 (Dr. Vijay Laxmi Sadho Vs. Jagdish) which is also reported in 2001 (2) SCC 247, being paragraph-33 is extracted below:

“33.   As   the   learned   Single   Judge   was   not   in agreement with the view expressed in Devilal case it would have been proper, to maintain judicial discipline, to refer the matter to a larger Bench rather than to take a different view.  We  note  it  with   regret  and  distress  that  the  said course was not followed. It is well-settled that if a Bench of coordinate   jurisdiction   disagrees   with   another   Bench   of coordinate jurisdiction whether on the basis of “different arguments”   or   otherwise,   on   a   question   of   law,   it   is appropriate that the matter be referred to a larger Bench for resolution of the issue rather than to leave two conflicting  judgments to operate, creating confusion. It is not proper to sacrifice certainty of law. Judicial decorum, no less than legal propriety forms the basis of judicial procedure and it must be respected at all costs.”