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Judgement |
| NEGOTIABLE INSTRUMENTS ACT, 1881 |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 20, 87 & 139 — Meaningful reading of — Held, makes it amply clear that a person who signs a cheque & makes it over to the payee remains liable — unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. (Para 37) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 20, 87, 138 & 139 — Filling of cheque by a person other than the drawer — Held, it is immaterial that the cheque may have been filled in by any person other than the drawer — if the cheque is duly signed by the drawer. (Para 37) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 118(a) & 139 — Principles enumerated under — (i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability— (ii) The presumption u/s 139 is a rebuttable presumption & the onus is on the accused to raise the probable defence— The standard of proof for rebutting the presumption is that of preponderance of probabilities— (iii) To rebut the presumption, it is open for the accused to rely on evidence led by him — or accused can also rely on the materials submitted by the complainant in order to raise a probable defence— Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely— (iv) It is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden— (v) It is not necessary for the accused to come in the witness box to support his defence. (Para 23) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Loan advanced by complainant — allegation of — Date of loan — Contradiction between complaint & examination-in-chief — No satisfactorily explanation — The High Court was unduly influenced by the fact that the accused did not reply the notice denying the execution of cheque or legal liability. Even before the trial court, appellant-accused has not denied his signature on the cheque. (Para 27) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Signature of accused — non denial by accused — Suggestion that his signatures were available on the blank stamp paper with complainant — No cogent reason for signing a blank stamp paper — cheques as mentioned therein with all the relevant particulars like cheque numbers, name of Bank & account number — Held, the suggestion is too remote & too uncertain to be accepted — the High Court was justified in reversing the judgment of the Trial Court — Appeal partly allowed. (Para 18.6) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Acquittal of accused by trial Court on the mere ground of ‘creation of doubt’ — Held, In the scheme of the NI Act, mere creation of doubt is not sufficient. (Para 20) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Discharge of a debt or liability by adducing evidence — If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. (Para 37) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 —Not advancing loan by a cheque or demand draft — not obtaining a receipt — would make no difference— Claim by accused — signed blank cheque to the complainant— Held, shows that initially there was mutual trust and faith between them. (Para 41) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Issuing a blank cheque — The subsequent filling in of an unfilled signed cheque is not an alteration. (Para 42) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the NI Act. (Para 42) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Cheques were issued in pursuance of the agreement to sell— Held, a payment which is made in pursuance of such an agreement is hence a payment made in pursuance of a duly enforceable debt or liability for the purposes of Sec. 138. (Para 12) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Successive presentation of Cheque —Held, successive presentation of the cheque & institution of the criminal complaint based on the second or successive dishonour of the cheque on its presentation is not forbidden u/s 138. (Para 7) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Defence by accused —cheque was stolen — rejected by the two courts below — Reversal by High Court — No evidence was led by the accused —Held, How the presumption u/s 139 can be rebutted not explained by the High court — Judgment of the High Court setting aside the conviction reversed. (Para 22) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Standard of proof & Test of proportionality — Held, bouncing of a cheque is largely in the nature of a civil wrong — the offence u/s 138 can be better described as a regulatory offence — In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses — & the defendant-accused cannot be expected to discharge an unduly high standard or proof. — Rangappa v. Sri Mohan. (Para 21) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Purport of — is to prevent & punish the dishonest drawers of cheques who evade and avoid their liability — the payee or the holder of the cheque in due course is necessarily required to serve a written notice on the drawer of the cheque within fifteen days (after amendment it is enhanced to 30 days) from the date of intimation received from the bank about dishonour. (Para 11) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 Clause (c) — Purpose of enactment — this gives an opportunity to a drawer of the cheque to make payment within fifteen days of receipt of the notice sent by the drawee. |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
Intention of legislation — NI Act — S 138 Clause (c) —Enactment — the object of providing Clause (c) is to avoid unnecessary hardship to the accused. (Para 12) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Identity of the accused — establishing of — Duty of the complainant —The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee). (Para 24) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Obligation on the part of complainant (Payee) — he did in fact comply with each one of the steps contemplated u/s 138 before initiating prosecution. (Para 24) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — Concept of ‘taking cognizance of the offence but not the offender’ — applicability in the context of prosecution u/s 138 — Held, the concept is not appropriate — Unless the complaint contains all the necessary factual allegations constituting each of the ingredients of the offence u/s 138 — the Court cannot take cognizance of the offence. (Para 24) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 — CrPC — S 91 — Cheque in question in the custody of IO in a case under IPC — request for production before court in case under NI Act — Direction by trial Court to produce the cheque & bank memo for the purpose of evidence & on verifying the same and by obtaining photocopy return to the IO — Upheld — petition dismissed. (Para 16) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 139 — Post dated cheque — absolving the accused from liability u/s 138 — Held, the fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 — Burden of proof — Rebuttal of presumption. (Para 36) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 139— Issuing of a blank cheque vis-à-vis onus of the accused — If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount & other particulars— This in itself would not invalidate the cheque— The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. (Para 38) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 vis-à-vis 139 — While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques — the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. — Rangappa v. Sri Mohan. (Para 21) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 141 — offence under — Essential requirements — the complaint must contain a specific averment that the Director was in charge of, and responsible for, the conduct of the company’s business at the time when the offence was committed. (Para 9) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 141 — Authorised signatory of a company — liability for prosecution — Held, for maintaining the prosecution u/s 141 — arraigning of a company as an accused is imperative — The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself — Aneeta Hada — ABC 2012 (I) 360 SC — relied upon. (Para 21) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 141 — Director of company — Vicarious liability — Not stated in the petition that petitioners were not Directors of the company during the relevant period — No evidence to clearly indicate that they were not concerned with the issuance of cheques — Held, the petitioners were directors on the date of commission of alleged offence & were responsible for the business of the said company as averred in the complaint— Petition rejected. (Para 18) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Condition of deposition of 15%amount of the cheque — waiving of — Weak financial condition — Unmarried children — Also has one daughter — transaction between the parties is not commercial transaction, — Amount was borrowed for own medical requirement — Case considered sympathetically — requirement of deposition of 15% amount of dishonoured cheque waived. (Para 9.2) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Offence under — Essential ingredients — (1) that a person drew a cheque on an account maintained by him with the banker; — (2) that such a cheque when presented to the bank is returned by the bank unpaid; — (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; — (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; — (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. (Para 23) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Burden of proof — Held, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand. (Para 23) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Service of Notice — return of a notice sent by registered post with postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station" — due service has to be presumed. (Para 15) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — S 138 & 142 — Service of Reminder Notice —generally there is no bar to send a reminder notice to the drawer of the cheque & usually such notice cannot be construed as an admission of non-service of the first notice. (Para 15) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Complaint under — Plea of Limitation — It is always open to accused to raise the defense that the initiation of prosecution against it is barred by limitation — The accused need not necessarily challenge the summoning order — It can raise such a defense in the course of trial. (Para 21) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Cognizance of premature complaint — Since a complaint filed u/s 138 of the NI Act before the expiry of 15 days from the date on which the notice has been served on the drawer/accused is no complaint in the eye of law — no cognizance of an offence can be taken on the basis of such complaint. (Para 36) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Cognizance of complaint — Sec. 142 creates a legal bar on the Court from taking cognizance of an offence u/s 138 except upon a written complaint. (Para 36) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Premature complaint —Held, the complaint u/s 138 of the NI Act filed before the expiry of 15 days of service of notice could not be treated as a complaint in the eye of law — Criminal proceedings initiated on such complaint are liable to be quashed. (Para 36) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Complaint under — Procedure of — A complaint made u/s 138 by the payee or the holder in due course of the cheque has to be in writing — & needs to be made within one month from the date on which the cause of action has arisen u/s 138 clause(c). (Para 42) |
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| NEGOTIABLE INSTRUMENTS ACT, 1881 |
NI Act — Ss 138 & 142 — Complaint under — Calculation of period — The period of one month u/s 142(b) begins from the date on which the cause of action has arisen under Clause(c) of the proviso to Section 138. (Para 42) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — Ss 138 & 142 — Complaint under — not making during prescribed period — If the complainant satisfies the Court that he had sufficient cause for not making a complaint within the prescribed period of one month — a complaint may be taken by the Court after the prescribed period. (Para 42) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — Ss 138 & 142 — Complaint under — Dismissal of earlier complaint on the ground prematurity — Remedy — the payee or the holder in due course of the cheque may file a fresh complaint within one month from the date of decision in the criminal case — in that event, delay in filing the complaint will be treated as having been condoned under the proviso to Clause (b) of Section 142 of the NI Act. (Para 42) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — Ss 138 & 142 — Premature complaint — a complaint filed before the expiry of 15 days from the date of receipt of notice issued under Clause (c) of the proviso to Section 138 is not maintainable — the complainant cannot be permitted to present the very same complaint at any later stage. (Para 42) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — Ss 138 & 142 — Dishonour of Cheque — When it becomes punishable — Three distinct conditions precedent — (i) Cheque ought to have been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within the period of its validity whichever is earlier — (ii) the payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid — (iii) the drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course within fifteen days of the receipt of the said notice. (Para 49, 50 & 51) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — Ss 138, 143A & 148 — CrPC — Ss 357(2) & 389 — Constitution of India — Article 142 — Dishonour of cheque — Sentence suspended — Order to deposit 25% of the amount of compensation — Grant of three months time to deposit the amount — Extension of stipulated period — Huge amount — Held, as Appellants were bonafidely litigating before this Court challenging the order passed by the first appellate court, in exercise of powers under Article 142 of the Constitution of India — Court grant further four weeks’ time from today to the appellants to deposit the amount as directed by the first appellate court, confirmed by the High Court & further confirmed by this Court. (Para 11) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Admission of the signature by the accused — a presumption shall be raised u/s 139 that cheque was issued in discharge of debt or liability — The question to be looked into is as to whether any probable defence was raised by the accused. (Para 24) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Presumption under — Burden of proof — Shifting of — Financial capacity — of the complainant questioned — no satisfactory reply — a probable defence on behalf of the accused shifted the burden on the complainant to prove his financial capacity & other facts — Indian Evidence Act, 1872 — Section 3 — Relevant fact. (Para 24) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Financial capacity of the complainant — Held, it was incumbent on the complainant to have explained his financial capacity — Court cannot insist on a person to lead negative evidence. (Para 28) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Presumption under — Nature of — the presumption is rebuttable — & it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested — Rangappa v. Sri Mohan. (Para 21) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Initial presumption under — Held, an initial presumption favours the complainant. — Rangappa v. Sri Mohan. (Para 21) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Nature & Objective of — Held, the section is an example of a reverse onus clause — has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. — Rangappa v. Sri Mohan. (Para 21) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Presumption under — Result of — Held, result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant — When such presumption is drawn, the factors relating to the want of documentary evidence — in the form of receipts or accounts — or want of evidence as regards source of funds are not of relevant consideration while examining if the accused has been able to rebut the presumption or not — Evidence Act — S 3 — Relevant fact. (Para 19) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Presumption under — rebuttal of — Burden of proof — Held, the onus to rebut the presumption u/s 139 is on the accused. (Para 36) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Presumption under — Cogent evidence of rebuttal — absence of — Issuance of blank cheque — Held,. even a blank cheque leaf, voluntarily signed & handed over by the accused — which is towards some payment — would attract the presumption — in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. (Para 40) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139 — Scope of — it shall be presumed, unless the contrary is proved, that — the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. (Para 11) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 139—Presumption under — Nature of — Held, the presumption u/s 139 is a presumption of law as distinguished from presumption of facts — The obligation of the prosecution may be discharged with the help of presumption of law & presumption of facts — unless the accused adduces evidence showing the reasonable possibility of non-existent of presumed facts. (Para 26) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 141 — Offence by a Company — Role of a Director — establishing of — Held, the role of a Director in a company is ultimately a question of fact, and no fixed formula can be fixed for the same. (Para 9) |
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| NEGOTIABLE INSTRUMENT ACT, 1881 |
NI Act — S 142—Condonation of delay — Scope — the section authorises the Court to condone the delay in appropriate cases. (Para 26) |
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