List of Current Affairs

Source: Allahabad High Court

Why in News?

Recently a bench of Justice Arun Kumar Singh Deshwal held that, even if a cheque is conditional requiring prior notice before presentation, its dishonor will attract Section 138 Negotiable Instruments Act, 1881(NI Act) liability if no notice was given before presentation.

• The Allahabad High Court gave this observation in the case of Rajiv Malhotra v. State of U P.

What was the Background of Rajiv Malhotra v. State of U P Case?

• This was an application filed under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) to quash the summoning order of 16^th August 2023 and the entire proceedings of Rahul Chauhan v. Rajiv Malhotra under Section 138 of the NI Act relating to dishonor of a cheque.
• The main issues were:
  • Whether the court can recall its earlier order dismissing the complaint for non-prosecution?
  • Whether a conditional cheque which was presented without prior notice attracts Section 138 liability?
  • Whether notice through courier service is valid notice under Section 138?
  • Whether notice through WhatsApp is valid without specific rules for electronic service?

What were the Court’s Observations?

• Quasi Civil Nature:
  • The court can recall its earlier order dismissing the complaint for non-prosecution at the initial stage, as the NI Act proceedings are quasi-civil in nature.
• Demand Notice:
  • Notice through courier service is a valid written notice under Section 138, but the presumption of service under Section 27 of the General Clauses Act, 1897 cannot be invoked unless courier is included along with registered post.
  • Notice through WhatsApp is valid service under Section 13 of the Information Technology Act, 2000 (IT Act) and no separate rules prescribing the procedure are required.
• Conclusion:
  • The application was dismissed, and the court directed all district courts to ensure order sheets are written in neat and legible handwriting or typed.

What is Dishonor of Cheque under NI Act?

• About:
  • Dishonor of Cheques is dealt under Section 138, covered under Chapter 17 of the NI Act inserted in 1988.
  • Section 138 of NI Act specifically deals with the offence related to dishonor of a cheque for insufficiency of funds or if it exceeds the amount arranged to be paid by the drawer's account.
  • It relates to the procedure where a cheque is drawn by drawer to discharge a debt, wholly or in part, and the cheque is returned to the Bank.
• Key Elements:
  • Liability of Drawer:
    • The drawer becomes criminally liable if the cheque bounces.
    • Criminal liability is established irrespective of the nature of the underlying transaction.
  • Conditions for Offense:
    • Essential conditions include the existence of a debt or other liability, issuance of a cheque, and subsequent dishonor.
    • The offense is not applicable if the drawer had sufficient funds, but the cheque was dishonored due to some other reason.

• Procedure for Prosecution:
  • Notice to Drawer: -
    • The payee must issue a notice within 30 days of the dishonor, demanding payment.
    • The drawer has 15 days of receipt of notice to remedy the situation, failing which legal action can be initiated.
  • Time Limit for Filing Complaint:
    • The complaint under Section 138 must be filed within one month of the expiry of the 15-day notice period.
  • Jurisdiction for Filing Complaint:
    • The complaint can be filed in a court within whose local jurisdiction the payee's bank is situated.
• Punishment:
  • Imprisonment:
    • Conviction under Section 138 can result in imprisonment for a term that may extend to two years.
  • Fine:
    • The drawer may be liable to pay a fine that may extend to twice the amount of the cheque or the debt.
• Landmark Case:
  • Dalmia Cement (Bharat) Ltd. v. Galaxy Traders and Agencies Ltd (2001):
    • SC held that on the date when the notice sent by fax reached the drawer of the cheque the period of 15 days (within which he has to make the payment) has started running and on the expiry of the period the offence is completed unless the amount has been paid in the meanwhile.
  • Sunil Todi and others v. State of Gujarat and another (2021):
    • SC held that even if there is a condition that a cheque is for security deposit and was to be deposited after confirmation, its dishonor will attract Section 138 if the amount is not paid within 15 days of notice

Source: Supreme Court

Why in News?

Recently Supreme Court (SC) in case of Vijay Kumar v. The State of Himachal Pradesh emphasized the importance of aligning accused statements with prosecution evidence and noted the failure to challenge the victim's testimony regarding consent during cross-examination, highlighting the significance of thorough evaluation in sexual assault cases.

• The SC upheld the rape conviction appeal dismissal, citing the failure to present the defense's assertions under Section 313 of the Criminal Procedure Code,1973 to the victim during cross-examination.

What was the Background of Vijay Kumar v. The State of Himachal Pradesh ?

• The accused were charge with the offenses including gang rape but acquitted by the Sessions Court due to lack of corroborating evidence.
• The State of Himachal Pradesh appealed against this acquittal, resulting in the High Court setting aside the trial court's judgment and remanding the case for retrial specifically for the offense of gang rape.
• Following retrial against five accused (one accused having deceased), the Sessions Court again acquitted them.
• Subsequently, the High Court intervened, converting the acquittal into a conviction under Section 376(2)(g) of the Indian Penal Code (IPC), citing special reasons for imposing a sentence of less than ten years' imprisonment.
• Criminal Appeal filed by the State of Himachal Pradesh, challenges the lenient three-year imprisonment term imposed by the High Court, which falls short of the minimum ten-year sentence prescribed by Section 376(2) of the IPC at the time of the offense.
• Additionally, Criminal Appeal has been lodged by accused Vijay to contest his conviction.
• Appeal filled in a SC
• The appellants asserted in their Section 313 statements that they engaged in consensual paid sex with the victim, alleging her consent. However, during the victim's cross-examination, the accused failed to suggest the fact of voluntary sexual intercourse, depriving the victim of the opportunity to rebut the accused's Section 313 statements.
• The appeal was dismissed and the decision of the High Court convicting the accused/appellants was affirmed.

What were the Court’s Observations?

• Justices Abhay S. Oka and Ujjal Bhuyan emphasized that accused statements under Section 313 must align with evidence presented by the prosecution, particularly when asserting consent in sexual assault cases.
• Failure to challenge the victim's testimony regarding consent during cross-examination renders the accused statements regarding consent irrelevant if not supported by prosecution evidence.
• Justice Abhay S. Oka's judgment highlights the importance of cross-examination in sexual assault cases,
  • Noting that the accused failed to challenge the prosecutrix's testimony regarding consent during cross-examination.
  • The prosecutrix's testimony regarding sexual intercourse remained unshaken as the accused did not contest the lack of consent during cross-examination.
  • The failure of the accused to present their case adequately, as neither the assertion of a consensual relationship nor the payment for sexual favors was raised during cross-examination, diminishing the relevance of the accused's statements under Section 313 of the Criminal Procedure Code.
  • The victim's consent during cross-examination deprived her of the opportunity to refute the accused's claims regarding consent during sexual intercourse.
• Despite acknowledging the prosecution's evidence, the court stressed the importance of considering the Section 313 statements of the accused, where they admitted to maintaining a physical relationship with the prosecutrix by paying her money. This information should have been utilized during the cross-examination of the prosecutrix for a comprehensive evaluation of the statement.

What is Section 313 CrPC?

About:

• Section 313 of the Criminal Procedure Code (CrPC) pertains to the examination of the accused by the court.
• It grants the accused an opportunity to explain any circumstances or evidence against them, providing a chance for them to present their case and clarify any discrepancies in the prosecution's evidence.
• Section 313 of Cr.P.C is outlined in section 351 in The Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)

Legal Provision

• Section 313 deals with the power to examine the accused.
• It states that

(1) In every inquiry or trial, for the purpose of enabling the accused personally to explain any circumstances appearing in the evidence against him, the Court—

(a) may at any stage, without previously warning the accused put such questions to him as the Court considers necessary;

(b) shall, after the witnesses for the prosecution have been examined and before he is called on for his defence, question him generally on the case: Provided that in a summons-case, where the Court has dispensed with the personal attendance of the accused, it may also dispense with his examination under clause (b).

(2) No oath shall be administered to the accused when he is examined under sub-section (1).

(3) The accused shall not render himself liable to punishment by refusing to answer such questions, or by giving false answers to them.

(4) The answers given by the accused may be taken into consideration in such inquiry or trial and put in evidence for or against him in any other inquiry into, or trial for, any other offence which such answers may tend to show he has committed.

(5) The Court may take help of Prosecutor and Defense Counsel in preparing relevant questions which are to be put to the accused and the Court may permit filing of written statement by the accused as sufficient compliance of this section.

What is the Scope and Objective of Section 313?

• The scope and objective of Section 313 of the Criminal Procedure Code, as laid down in the case of Sanatan Naskar & Anr. v. West Bengal,2010.
• It includes establishing direct communication between the accused and the court.
• This section aims to ensure that all incriminating evidence against the accused is presented before them, providing an opportunity for the accused to offer explanations.
• Section 313 serves the purpose of testing the credibility of the prosecution's case, as the examination of the accused is not merely a procedural formality but a crucial step in assessing the validity of the prosecution's evidence.

What is the Major Case Law Cited in Vijay Kumar v. The State of Himachal Pradesh?

• State of Punjab v. Gurmit Singh, (1996) the court held that the prosecutrix's account of being forcibly taken to the location where the rape occurred, followed by transportation to another place, substantiated her claim of non-consensual sexual intercourse.
  • The court ruled that if the prosecutrix lacks a significant motive to accuse the accused falsely, the court should readily accept her testimony without hesitation.

Source: Supreme Court

Why in News?

Recently the Supreme Court held that if the party fails to appear for a hearing after filing a claim, the learned Arbitrator cannot say that continuing the arbitral proceedings has become unnecessary.

What was the Background of Dani Wooltex Corporation & Ors v. Sheil Properties Pvt. Ltd. & Another. Case?

• Dani Wooltex (first appellant) was a partnership firm, and certain lands were owned by this firm in Mumbai.
• Sheil Properties (first respondent) was a private limited company and involved in real estate development. Marico Industries (second respondent) also a limited company in the consumer goods business
• It was permitted that part of the first appellant’s property will be developed by Sheil properties (Sheil) under the Development Agreement in 1993.
• The first appellant and Marico Industries (Marico) executed the Memorandum of Association (MOU) by which the first appellant agreed to sell another portion of its property to Marico.
• Under the MOU, Marico was given the benefit of a certain quantity of FSI/TDR.
• A public notice was issued by Marico for inviting objections. An objection was submitted by Sheil and stated that any transaction between the first appellant and Marico would be subject to the Agreement.
• Because of this dispute a suit was instituted by Sheil for the specific performance of the MOU as modified by the alleged consent terms.
• The first appellant and Marico both were parties in this suit.
• Another suit was filed by Marico against first appellant, and Sheil was also made a party defendant to the suit.
• The dispute between the first appellant and Sheil led Sheil to institute a suit.
• The order was passed on 13^th October 2011 for the appointment of the sole Arbitrator in the suit filed by Marico.
• A suit was disposed of (filed by Sheil) by referring to the dispute with the same sole Arbitrator.
• Now the Arbitral Tribunal had to deal with the claims filed by Sheil and Marico, both against the first appellant.
• In the Arbitral proceeding the claims of Marico was heard and end with award but the claim filed by Sheil did not proceed.
• A communication was made by the first appellant to the Arbitral Tribunal and requested to dismiss the claims filed by Sheil on the ground that the company had abandoned the claim.
• After that an application was filed by the first appellant invoking the power of Arbitral Tribunal under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996 (A&C Act).
• The contention of the first appellant was that Sheil's conduct of not taking any steps for eight years shows that the said company abandoned the arbitral proceedings.
• An affidavit was filed by Sheil and contended that no ground was made out to act under Section 32(2)(c) of the A&C Act. Sheil also raised other factual contentions and denied the allegation of abandonment.
• The Arbitral Tribunal passed an order and terminated the arbitral proceedings in the exercise of power under Section 32(2)(c) of the A&C Act.
• An appeal was filed before the Supreme Court and the issue was related to the legality and validity of the order of termination of the arbitral proceedings under Section 32(2)(c) of A&C Act.

What were the Court’s Observations?

• The Supreme Court (SC) held that the power under Section 32(2)(c) of A&C Act can be exercised only if, for some reason, the continuation of proceedings has become unnecessary or impossible.
• Unless the Arbitral Tribunal records its satisfaction based on the material on record that proceedings have become unnecessary or impossible, the power under Section 32(2)(c) cannot be exercised. If the said power is exercised casually, it will defeat the very object of enacting the A&C Act.
• Abandonment by the claimant of his claim may be grounds for saying that the arbitral proceedings have become unnecessary. However, the abandonment must be established. Abandonment can be either express or implied. Abandonment cannot be readily inferred.
• The SC observed that merely because a claimant, after filing his statement of claim, does not move the Arbitral Tribunal to fix a date for the hearing, it cannot be said that the claimant has abandoned his claim.
• The court held that only because a claimant, after filing his statement of claim, does not move the Arbitral Tribunal to fix a date for the hearing, the failure of the claimant, per se, will not amount to the abandonment of the claim.

What is a Statement of Claim?

• The statement of claim is a document on which a legal claim based on.
• It provides a simple and clear understanding of the claims and remedies you are asking the court.
• A suit to officially began, the statement of claim filed.
• It sets out the framework for the proceedings in the suit.
• A statement of claim should include the party's name and their roles, court information, relief, damages, liability etc.

What is the Legal Provision Involved in this Case?

• Section 32(2)(c) of A&C Act: Termination of proceedings. —

(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub­section (2).

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—

(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.