Page 108 - DMGT407Corporate and Business Laws

Unit 4: Law of Negotiable Instruments

liable to be proceeded against and punished accordingly. Further, a director, manager, secretary Notes
or other officer of the company shall be liable to be proceeded against and punished accordingly
in case the offence has been committed with his consent or connivance, or is attributable to any
neglect on his part in this regard. However, a person will not be liable in case: (i) where such
person proves that the offence was committed without his knowledge, or
(ii) where he had exercised all due diligence to prevent the commission of such offence. The
expression ‘Company’ here includes any body corporate and includes a firm and association of
individuals; and ‘Director’ in relation to a firm, means a partner in the firm (s.141).
The provisions of Negotiable Instrument (Amendment and Miscellaneous Provisions) Act, 2002
as regards section 138, 141-143 are summarized below:
1. The jail term for the accused has been enhanced from existing 1 year to 2 years (s.138).
2. The period of sending notice by the payee to the drawer has been extended from earlier 15
days to 30 days from the date of receipt of information by him from the bank regarding
the return of the cheque as unpaid/bounced. (s.138).

3. Any person who is nominated as a director of the company by virtue of his holding any
office or employment in the Central Government or State Government or financial
corporation owned or controlled by the central or state government shall not be liable for
prosecution under s.138 (s.141).
4. The court can take cognizance of a complaint after the prescribed period of one month,
provided sufficient cause exists for not filing the complaint within one month. (s.142).
5. The court can try the cases summarily notwithstanding anything contained in Cr. P.C. and
the provisions of section 262 to 265 of Cr.P.C. shall, as far as may be, apply to such trials
(s.143).
6. Every trial shall be conducted as expeditiously as possible and an endeavour shall be
made to conclude the trial within six months from the date of filing of the complaint
(s.143).

7. Notwithstanding anything contained in Cr.P.C. and for the purpose of such trial of bounced
cheques, a Magistrate issuing a summons for an accused or a witness may direct a copy of
summons to be served at the places where such accused or witness ordinarily resides or
carries on business or personally works for gain, by speed post or by such courier services
as are approved by a Court of Sessions (s.144).
8. Where an acknowledgment purporting to be signed by the accused or the witness or an
endorsement purported to be made by any person authorized by the postal department or
the courier services that the accused or the witness refused to take delivery of summons
has been received, the court issuing the summons may declare that the summons has been
duly served (s.144).
9. Notwithstanding anything contained in Cr. P.C. the evidence of the complainant may be
given by him on affidavit and may, subject to all just exceptions, be read in evidence in any
enquiry, trial or other proceeding under the Cr. P.C. (s.145).
10. The court may, if it thinks fit, and shall, on the application of the prosecution or the
accused, summon and examine any person giving evidence on affidavit as to the facts
contained therein (s.145).

11. The court shall, in respect of every proceeding for cheque bounce offences, on production
of Bank’s slip or memo having thereon the official mark denoting that the cheque has been
dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is
disproved (s.146).

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