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--------------- Print Magazine --------------
  May 2016
  April 2016

DISHONOUR OF CHEQUE: Successive Defaults

While a complaint under section 138 of the Negotiable Instruments Act, based on a default and notice to pay must be filed within a period of one month from the date the cause of one action accrues, which implies the date on which the period of 15 days granted to the drawer to arrange the payment expires, there is nothing in section 142 of the Act to suggest that expiry of any such limitation would absolve him of his criminal liability should the cheque continue to get dishonoured by the bank on subsequent presentations. So long as the cheque is valid and so long as it is dishonoured upon presentation to the bank, the holder's right to prosecute the drawer for the default committed by him remains valid and excercisable.

Overruling the decision in Sadanandan Bhadran v. Madhavan Sunil Kumar , (1998) 6 SCC 514: 1998 (4) SCALE 708, the Supreme Court has held that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default which was followed by a statutory notice and a failure to pay had not been launched. Prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to section 138 of the Negotiable Instruments Act.

MSR Leathers v. S. Palaniappan , Crl. A. Nos. 261-264 of 2002; Decided on 26-9-2012 (SC) [R.M. Lodha, T.S. Thakur and Anil R. Dave, JJ.]

2G CASE: Method of Allocation of Spectrum Licenses

The President of India has on 12 th April, 2012, made the present Reference for consideration of the question as to whether the only permissible method for disposal of all natural resources across all sectors and in all circumstances is by the conduct of auctions. The Reference is occasioned by the decision of the Supreme Court, rendered by a Bench of two learned Judges on 2 nd February, 2012 in Centre for Public Interest Litigation v. Union of India (2G Case), (2012) 3 SCC 1: 2012 (2) SCALE 180.

The Apex Court has held that auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and, therefore, every method other than auction cannot be struck down as ultra-vires the constitutional mandate. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximizing private entrepreneurs, adoption of means other than those that are competitive and maximize revenue may be arbitrary. The Court has held that auctions are not the only permissible method for disposal of all natural resources across all sectors and in all circumstances.

IN RE: Special Reference No. 1 of 2012 ; Decided on 27-9-2012 [S.H. Kapadia, CJI, D.K. Jain, Jagdish Singh Khehar, Dipak Misra and Ranjan Gogoi, JJ.]

LAND ACQUISITION: Subsequent Purchaser of Land

A person who purchases land subsequent to the issuance of notification under section 4 of the Land Acquisition Act, with respect to it, is not competent to challenge the validity of the acquisition proceedings on any ground whatsoever, for the reason that the sale deed executed in his favour does not confer upon him, any title and at the most he can claim compensation on the basis of his vendor's title.

The general rule of law is undoubted, that no one can transfer a better title than he himself possesses. Once the land is acquired and it vests in the State, free from all encumbrances, it is not the concern of the land owner, whether the land is being used for the purpose for which it was acquired or for any other purpose. He becomes pesona non-grata once the land vests in the State. He has a right to only receive compensation for the same, unless the acquisition proceeding is itself challenged. The State neither has the requisite power to reconvey the land to the person-interested, nor can such person claim any right of restitution on any ground, whatsoever, unless there is some statutory amendment to this effect.

V. Chandrasekaran v. Administrative Officer , C.A. Nos. 6342-6343 of 2012; Decided on 18-9-2012 (SC) [Dr. B.S. Chauhan and Jagdish Singh Khehar, JJ.]

JUVENILES: Claim of Juvenility

A claim of juvenility may be raised at any stage even after final disposal of the case. It may be raised for the first time before the Supreme Court as well after final disposal of the case. The delay in raising the claim of juvenility cannot be a ground for rejection of such claim. However, for making a claim with regard to juvenility after conviction, the claimant must produce some material which prima facie satisfy the court that an inquiry into the claim of juvenility is necessary. An affidavit of the claimant or any of the parents or a sibling or a relative in support of the claim of juvenility raised for the first time in appeal or revision or before the Supreme Court shall not be sufficient justifying an enquiry to determine the age of such person unless the circumstances of the case are so glaring that satisfy the judicial conscience of the court to order an enquiry into determination of age of the delinquent.

Abuzar Hossain v. State of W.B. , 2012 (10) SCALE 101; Decided on 10-10-2012 (SC) [R.M. Lodha, T.S. Thakur and Anil R. Dave, JJ.]

CRIMINAL LAW: 'Quashing of Offence' and 'Compounding of Offence'

Quashing of offence or criminal proceedings on the ground of settlement between an offender and victim is not the same thing as compounding of offence. They are different and interchangeable. The two powers are distinct and different although ultimate consequence may be same viz. acquittal of the accused or dismissal of indictment. Inherent power is of wide plentitude with no statutory limitation but it has to be exercised in accord with the guideline engrafted in such power, to secure the ends of justice or to prevent abuse of the process of any court. Heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. cannot be fittingly quashed even though the victim or victim's family and the offender have settled the dispute. Such offences are not private in nature and have serious impact on society. But the criminal cases having overwhelming and pre-dominatingly civil flavour stand on different footing for the purposes of quashing, particularly the offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute. In this category of cases, the High Court may quash criminal proceedings, if in its view, because of the compromise between the offender and victim, the possibility of conviction is remote and bleak and continuation of criminal case would put accused to great oppression.

Gian Singh v. State of Punjab , 2012 (9) SCALE 257 (SC) [R.M. Lodha, Anil R. Dave and Sudhansu Jyoti Mukhopadhaya, JJ.]

ARBITRATION: Non-Signatory Parties

Normally, arbitration takes place between the persons who have, from the outset, been parties to both the arbitration agreement as well as the substantive contract underlining that agreement. But, it does occasionally happen that the claim is made against or by someone who is not originally named as a party. These may create some difficult situations, but certainly, they are not absolute obstructions to law/the arbitration agreement. Arbitration, thus could be possible between a signatory to an arbitration agreement and a third party. Of course, heavy onus lies on that party to show that, in fact and in law, it is claiming 'through' or 'under' the signatory party as contemplated under section 45 of the Arbitration and Conciliation Act, 1996.

A non-signatory or third party could be subjected to arbitration without their prior consent, but this would only be in exceptional cases. The court will examine these exceptions from the touchstone of direct relationship to the party signatory to the arbitration agreement, direct commonality of the subject-matter and the agreement between the parties being a composite agreement. The transaction should be of a composite nature where performance of mother agreement may not be feasible without aid, execution and performance of the supplementary or ancillary agreements, for achieving the common object and collectively having bearing on the dispute.

Chloro Controls (I) Pvt. Ltd. v. Seven Trent Water Purification Inc. , C.A. No. 7134 of 2012; Decided on 28-9-2012 (SC) [S.H. Kapadia, CJI, A.K. Patnaik and Swatanter Kumar, JJ.]

LL.M. (Medalist)

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