Case BriefsHigh Courts

Allahabad High Court: Attau Rahman Masoodi, J., allowed the appeal and modified the impugned order by applying the principle of res judicata.

The factual matrix of the case is such that the present appeal has arisen out of the judgment and award dated 16-02-2016 delivered by Motor Accident Claims Tribunal (MACT) Lucknow in Claim Petition No. 275 of 2007 whereby compensation along with interest was awarded to the claimant who suffered serious eye injury. The accident involved two vehicles i.e., a truck and a car whereby the truck was insured by the appellant.

The correctness of the award is in question whereby the entire liability has been imposed on the appellant although the case was that of composite negligence and the tribunal ought to have considered the judgment delivered by MACT Gonda in the same matter. The appellant has also questioned the multiplier applied for calculation of the claim.

A plea of finality on the aspect of proportionate liability was advanced by the counsel for the appellant, Bhanu Prakash Dubey and Kartikey Dubey in the subsequent proceedings before MACT Lucknow on the basis of the judgment delivered by MACT Gonda. It was further submitted that since the judgment rendered in the earlier proceedings concerns the same accident, therefore, this issue too was liable to be decided in the manner already settled between the parties.

It was contended by Alka Dubey, counsel for the respondent that MACT Lucknow has not committed any error since it has exclusive jurisdiction and is not bound by Section 11 CPC.

The Court referred to Section 169 of Motor Vehicle Act, 1988 and Rules 209. 215, 220 of U.P. Motor Vehicle Rules, 1998 while deliberating over the present matter and observed that that the MACT is obligated to frame the issues on which the right decision of the claim appears to depend.

The Court relied on the judgment titled Canara Bank v. N.G. Subbaraya Setty, (2018) 16 SCC 228 and held that the findings of MACT Lucknow are not justifiable as it should have considered the objections of the appellant and weighed the same in accordance with law. The principle of res judicata was applicable between the parties and the same should have been applied on the aspect of proportional liability of both the parties, accordant with the earlier judgment/award.

Thus, the Court modified the award rendered by MACT Lucknow by fixing the liability to pay compensation equally on both the appellant and respondent. With respect to the appellant’s contention regarding multiplier, the Court accepted the same and held that MACT Lucknow ought to have applied the multiplier as 16 based on the age of the claimant.

In view of the above, the impugned judgment/award was modified to the aforesaid extent and the appeal was accordingly disposed of. [New India Assurance Co. Ltd. v. Vikas Sethi, First Appeal in Order No. 581 of 2016, decided on 31-07-2020]

Case BriefsHigh Courts

Kerala High Court: Anu Sivaram, J. allowed the Writ Petition by directing the respondent to only decide the amount of liability after having afforded the petitioner the chance to put forth his side

In the present case, the Petitioner who is the former Director of T.K. Manufacturing Enterprises Private Limited had entered into a contract for manufacture and supply of electricity poles to the respondent Board. The contract was awarded in the year 2000 and terminated in 2002, alleging delay in executing the work. The Company had while entering into the contract, given security by way of Bank Guarantee which, according to the petitioner, was encashed by the respondent Board towards liquidated damages.

The petitioner was served with a revenue recovery notice by the respondent. The petitioner raised objection against the recovery proceedings and approached the Court.

The Court had directed the respondent Board to consider the representation submitted by the petitioner on merits. Having afforded an opportunity of hearing to the petitioner, he submitted evidence to prove his contentions.

The Court reprimanded the respondent and held that the Chairman was bound to deal with those contentions and take a reasoned decision. Moreover, nothing was brought on record to indicate that a proper process of quantification of liability with notice to the petitioner was undertaken prior to the initiation of the revenue recovery proceedings.

It is settled law that one party to an agreement cannot unilaterally quantify the liability and proceed for recovery.

The Writ Petition was allowed on the grounds that the liability of the petitioner cannot and should not be quantified without giving him a chance to appear and give his side. [Sundeep Abraham v. Kerala State Electricity Board, WP(C) No. 12772 of 2013(V), decided on 04-08-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Green Tribunal (NGT): Bench of Justice Adarsh Kumar Goel (Chairperson) and Justice S. P. Wangdi (Judicial Member) and Dr Satyawan Singh Garbyal (Expert Member), reaffirmed the decision passed by the tribunal in the case of LG Polymer Chemical Plant, In Re,  2020 SCC OnLine NGT 129, which observed that safety of citizens and the environment are of great concern calling for strict action against failure at all levels and for strengthening the regulatory mechanism, holding Oil India Limited liable under the principle of absolute liability to pay compensation of Rs 25 crores for the oil well blow-out in Assam.


The issue pertains to a claim for compensation to the victims and to the environment on account of damage in an incident of oil well blow-out on 27-05-2020 at Baghjan in the Tinsukia District of Assam. The oil well released propane, methane, propylene which caused great damage to flora and fauna present around and also spread into the Dibru-Saikhowa National Park which is a home to a huge population of wildlife in it. It also affected the people living around the area as 1610 families were displaced due to the gas leak.


Whether the direction of the Tribunal in its earlier order for compensation of Rs 25 Crores to District Magistrate by Oil India Limited is required or not?


  • The Tribunal committee ordered for immediate deposit of Rs 25 crore to the District Magistrate to meet the liability for compensation to the victims and the cost of restoration of the environment.
  • On the issue of the other funds set up by Oil India Limited for the rehabilitation of the victims and restitution of the environment, the committee decided that “it is not a substitute for the information sought to be gathered by this Tribunal for exercise of its jurisdiction which is sui generis”. It decided that liability of Oil India Limited to pay compensation is absolute, relying on the judgement of MC Mehta v. UOI, (1987) 1 SCC 395. Tribunal primarily relied on the decision of    LG Polymer Chemical Plant, In Re, 2020 SCC OnLine NGT 129 which was similar to the current incident and has been discussed above.
  • The committee in its order, while acknowledging the relief funds made by Oil laid emphasis on the fact that the company is still bound to pay compensation to the State. [Bonani Kakkar v. Oil India Limited, I.A. No. 30 of 2020, decided on 02-07-2020]
Case BriefsHigh Courts

Kerala High Court: R. Narayana Pisharadi J., allowed a criminal revision petition in part in a matter relating to Section 138 of Negotiable Instruments Act, 1881.

In the present case, the accused had obtained an amount of Rs 5, 00,000 from the complainant on the promise that he would arrange a licence for the complainant for conducting petrol pump. Upon demanding the repayment of the amount the accused issued a cheque dated 05-02-2007 for Rs 5,00,000 in discharge of the liability. The cheque was dishonoured upon presenting it to the bank for the reason that there was no sufficient amount in the account of the accused. 

The trial court had found the petitioner guilty of offence punishable under Section 138 of Negotiable Instruments Act, 1881 and sentenced him to simple imprisonment for a period of four months and to pay a fine of Rs 5,00,000. The appellate court had also affirmed the conviction and the sentence imposed on the petitioner and dismissed the appeal. 

High Court upon perusal of the facts and circumstances allowed the revision petition in part. The Court affirmed the conviction passed by the trial court and affirmed by the appellate court thereafter but the sentence imposed upon the petitioner has been set aside. In supersession of the sentence, accused has been sentenced to pay a fine of Rs 5,10,000 and in default of payment of fine, to undergo simple imprisonment for a period of two months. [C.K. Mohini v. Varghese. M. Mathew, 2020 SCC OnLine Ker 492, decided on 05-02-2020]

Case BriefsForeign Courts

Supreme Court of the Democratic Socialist Republic of Sri Lanka: A Full Bench of Buwaneka Aluwihare, Priyantha Jayawardena and Murdu N. B. Fernando, JJ., dismissed an appeal which was filed on the ground that the High Court Judge had erred in attaching liability to the defendant to pay damages.

The original action in the High Court was filed in order to recover damages with legal interest from the defendant-appellant for breach of contract. The defendant had entered into an agreement with the Commissioner-General of the Department of Educational Publications in the Ministry of Education (hereinafter “Commissioner-General”) to print several school textbooks and the parties had agreed to print the whole order for a specific amount within a specified deadline. The contention of the Plaintiff was that the defendant had failed to meet the deadline and complete the order and whatever part of the order was complete even that was delivered after the specified deadline because of which the Commissioner General was compelled to commission three other printing agencies to print the remainder. Exercising rights stipulated in clauses (15), (21) and (23) of the Agreement the Commissioner-General, on behalf of the State, sought to recover the damages as it was the defendant’s default that had caused additional expenses. Having failed to secure the recovery by way of a letter of demand, the Attorney General had instituted an action in the High Court, where the Court had answered all the issues raised in favour of the plaintiff. The counsel for the defendant-appellant had submitted that the facts of the case were not disputed but he only wished to canvass the conclusions reached by the trial Judge, the defendant had contended that the Agreement was terminated by mutual consent and not pursuant to a breach basing their arguments on the conduct of the plaintiff such as not serving notice to show cause, not blacklisting the defendant, awarding subsequent contracts and making payments without any deductions in the form of a penalty but there was stark paucity of any evidence and the High Court had held that the defendant had failed to substantiate their position that they were not in breach of the agreement.

The Court while dismissing the appeal explained that they agreed with the Judgment of the High Court as the defendant-appellant had neither produced evidence establishing that they had not fulfilled their obligations nor had they controverted the evidence led by the Plaintiff to this effect. [Tisara Packaging Industries Ltd. v. Attorney General, SC CHC Appeal No. 17 of 2010, decided on 18-10-2019]

Case BriefsHigh Courts

Bombay High Court: Vibha Kankanwadi, J., while allowing a writ petition, quashed a complaint under Section 138 of the Negotiable Instruments Act, 1881, filed against the petitioner in a cheque dishonour case. It was held that the complaint filed by the respondent-complainant could not be treated as a “complaint” in the eyes of law.

The complainant, in her complaint, had alleged that the petitioner had taken a loan from her, which he failed to repay. He issued a cheque for the discharge of the said liability, which was dishonoured on presenting for encashment. Therefore, she filed the subject complaint before the Magistrate against the petitioner.

Aggrieved, the petitioner filed the instant petition praying for quashing of the complaint against him. His counsel, M.D. Thube-Mhase, submitted that when, as per the contents of the complaint, the accused had refused to accept the notice on 3-1-2017, the period of 15 days for the compliance after the service or refusal of the notice would have been till 18-1-2017, and the complainant could have filed the complaint on or after 19-1-2017 within the statutory period. However, when she has filed the complaint on 18-1-2017 itself, it cannot be taken as a complaint, and therefore, the complaint is liable to be quashed.

Per contra, A.N. Gaddime and A.V. Indrale Patil, counsel for the complainant, contended that though the complaint was filed on 18-1-2017, the complaint was registered on the next date, i.e., 19-1-2017, and the cognizance was taken by order of issuing process on 15-04-2017, therefore the complaint was maintainable.

The High Court considered the law as laid down in Yogendra Pratap Singh v. Savitri Pandey, (2014) 10 SCC 713, wherein the Supreme Court disapproved the view that if the complaint under Section 138 is filed before the expiry of 15 days from the date on which notice has been served on the drawer/accused, the same is premature and if on the date of taking cognizance a period of 15 days from the date of service of notice on the drawer/accused has expired, such complaint was legally maintainable.

Finally, observing that the date of 15th day or conversely the day on which the refusal was there should be excluded, the High Court held that complaint, which was filed on 18-1-2017, was definitely premature, i.e., before the expiry of 15 days of the refusal of the notice. Therefore, it was held, that the subject complaint could not be treated as a “complaint” in the eyes of law. Consequently, the writ petition was allowed and the complaint was quashed. [Afroj Khan v. Mandodra, 2019 SCC OnLine Bom 5422, decided on 12-12-2019]

Case BriefsHigh Courts

Patna High Court: Madhuresh Prasad, J. disposed of the application by giving him an opportunity to approach the Board of Directors in order to get his punishment reviewed. 

The petitioner was a Branch Manager of the respondent Bank which alleged that he did not observe the norms regarding maintenance, safety, upkeep and security of documents including banker’s cheque book in the Branch. 

The petitioner being on leave from 15.12.2001 to 27.12.2001, had handed over charge of the branch to another officer. He returned on 27.12.2001and on 29.12.2001 it was revealed that the banker’s cheque for an amount of Rs. 2.5 lakh was encashed at the State Bank of India. The cheque was drawn from the petitioner’s branch since he had not observed the rules for safe maintenance and upkeep of valuable documents including banker’s cheque, such withdrawal had been made. 

The petitioner’s case was that the transaction has been done during the petitioner’s period of leave and he had handed over the keys of almirah in the branch wherein all the documents including the banker’s cheque book was kept to the Incharge. 

Mr. Prashant Vedasen, appearing on behalf of the Bank, submitted that substantially the charge was for non-observance of adequate precaution in the matter of maintenance of safety and upkeep of the valuable documents in the bank. From a bare perusal of the statement of imputation, enclosed along with the charge memo, it would be evident that the petitioner did not ensure that there was a system of duel charge/custody of the valuable documents including banker’s cheque book in his branch. There was no system of accounting at the end of every day as to how many leaf from the banker’s cheque was used or remained unused. Even after his joining on 27.12.2001, the petitioner did not verify whether the banker’s cheque, which was encashed on 18.12.2001, was issued from the cheque book or not. The fraudulent withdrawal came to light on 29.12.2001. Even passbooks were not being updated on a daily basis and the banking transactions were being entered in a pseudo passbook. These allegations/ imputations were not denied by the petitioner.

The Court held that handing over his responsibilities to the branch in-charge in his absence would not absolve the petitioner of the observance of norms and requisite caution by at least updating of the banker’s cheque book account every day. Whether the petitioner could be attributed to the issuance of the cheque was an issue that had not been conclusively established by the authorities as the Forensic Science Laboratory had submitted a report that the petitioner’s signature on the cheque book was forged. Therefore, at best the petitioner’s lack of adequate care in the matter of maintenance and safety of the documents was an issue in the instant proceeding.

In view of the above-noted facts, the writ application was disposed of with the directions that the petitioner was permitted one opportunity to raise the issue of quantum of punishment before the Appellate Authority i.e. Board of Directors of Dakshin Bihar Gramin Bank. Since the petitioner had not raised this issue, liberty was granted, but with a stipulation that if the authorities were of the view that more lenient view could have been taken in the matter, the effect of the same would be prospective and will not give rise to claim for any arrears by the petitioner, since he had not raised this issue earlier. [Vinay Kumar v. Madhya Bihar Gramin Bank, 2019 SCC OnLine Pat 1708, decided on 20-09-2019]

Case BriefsHigh Courts

Delhi High Court: Mukta Gupta, J. allowed a petition filed against the order of the trial Judge whereby the petitioner’s complaint filed for the commission of offence under Section 138 (dishonour of cheque) of the Negotiable Instruments Act, 1881, was dismissed for non-prosecution.

The petitioner had advanced a loan to the respondent who defaulted in repaying the same. The cheque given by the respondent for the discharge of the said liability was also dishonoured. After fulfilling the codal formalities, the petitioner filed a complaint under Section 138.

The petitioner along with his counsel was present when the Metropolitan Magistrate issued summons against the respondent. Thereafter, on the next date, counsel for the petitioner was present but Metropolitan Magistrate was not available on account of training, Thereafter, counsel for the petitioner was present and bailable warrants were issued against the respondent. When notice was required to be framed, the case was transferred to another Metropolitan Magistrate. On the subsequent date, none appeared before the Metropolitan Magistrate as the advocates were on strike. On the date of the impugned order, the complaint was dismissed on account of non-appearance on behalf of the petitioner.

The High Court was of the view that the petition ought to be allowed. It was considered that neither the complainant nor his counsel could appear due to strike as mentioned above and that the clerk of the counsel wrongly noted the next date, and therefore the complainant or his counsel could not again appear on the date of the impugned order. In such circumstances of the case, the Court thought it fit to restore petitioner’s complaint on the file of the Metropolitan Magistrate. The petition was accordingly allowed. [Rajeev Kumar v. Gagan Makhija, 2019 SCC OnLine Del 9708, decided on 07-08-2019]

Case BriefsHigh Courts

Kerala High Court: P.B. Suresh Kumar, J. allowed an appeal filed by the claimant against the insurer in which an award was passed exonerating the liability of the insurer to indemnify the owner.

 In the instant case, the claimant sustained injuries in a motor vehicle accident and claimed for indemnity by the insurer. The insurer stated that they were not liable to indemnify the owner as the cover note issued by them for the vehicle was cancelled when the cheque issued by the owner towards the premium of the policy was dishonored and therefore, at the time of the accident the vehicle was not insured. The owner stated that he was not aware of the dishonor of cheque and after the accident, he took a new policy. Moreover, he also stated that the cheque was issued with sufficient money in his account and no communication was made by the insurer about the cheque dishonor. The insurer, on the other hand, stated that communication about the cancellation of the cover note was done under the certificate of posting. The Motor Accident Claims Tribunal opined that as the owner took a new policy it meant that he was aware of the cancellation of the mentioned policy. It exonerated the insurer from the liability holding that the vehicle was not covered under the policy at the time of the accident. Thus, an appeal was made by the claimant against the decision of the Tribunal.

Learned counsel on behalf of the appellant,  K. Janardhanan contended that the policy was valid at the time of the accident and the Tribunal should not have exonerated insurer’s liability. He stated that the cancellation of the policy was not intimated to the owner of the vehicle.

Learned counsel, R. Ajith Kumar on behalf of the respondent contended that the award exonerating the liability of the insurer could only be challenged by the owner of the vehicle according to Section 173 of the Motor Vehicles Act, 1988 (MVA), so the appeal was not maintainable. He further contended that the owner did not establish that he did not receive any communication regarding policy cancellation. Also, the cancellation of the cover note was initiated by them by communication sent under certificate of posting.

At the outset, the Court opined that the appeal was maintainable as the expression ‘any person aggrieved by an award’ under Section 173 of MVA, covers both – owner as well as the claimant.

The Court held that it is settled that the liability of the insurer to indemnify third parties subsists unless the insurance coverage is cancelled by the insurer and intimation thereof has reached the insured and the registering authority. Reliance was placed on Green View Radio Service v. Laxmibai Ramji, (1990) 4 SCC 497  and it was opined that in case a postal article was sent by registered post, the argument that the owner did not receive the article, was a rebuttable presumption under Section 27 of General Clauses Act, 1897. In such a case, the burden shifts to the party who wants to rely on the presumption to satisfy the court by leading oral or documentary evidence to prove the service of such an article on the addressee.

It was opined that merely because the owner took a new policy after the accident, it would not mean that he was aware of the cancellation of the mentioned policy. Therefore the appeal was allowed and the award impugned in the appeal and the exoneration of the insurer’s liability to indemnify the owner was vacated.[Prasanna B. v. Kabeer P.K., 2019 SCC OnLine Ker 1793, decided on 21-05-2019]

Case BriefsHigh Courts

Uttaranchal High Court: Sudhanshu Dhulia, J. remanded a matter pertaining to the Motor Accident Claims Tribunal and directed them to decide on the matter expeditiously. 

The appeal was filed as the appellant as she was aggrieved by the order passed by the Motor Accident Claims Tribunal. The appellant’s husband, Bhupesh Chandra Singh, was a Junior Engineer in Uttarakhand Jal Vidyut Nigam Limited. On 13-09-2015, while he was going on an official vehicle from “Daakpatthar” to “Koti Icchadi Dam”, he met with an accident as the vehicle fell into a deep “Khadda”. Consequently, he sustained injuries and died on the same day. On account of his death, the appellant filed a petition claiming a compensation of Rupees Eighty Lakh Twenty Thousand. The Tribunal dismissed their petition. 

The insurance Company argued that the deceased was covered under the Workmen’s Compensation Act and was insured with the New India Assurance Company, through which the claimant had already received a compensation of Rupees Seven Lakh Two Thousand One Hundred Seven and the claim petition was barred by Section 167 of the Motor Vehicles Act, 1988. This argument is not valid as the deceased was not a workman and was not covered under the Workmen’s Compensation Act, 1923.

The appellants argued that the vehicle in question was covered under the Comprehensive Policy. To this, the insurance company contested that in the comprehensive policy, the liability is only limited and what amount of compensation has to be given will depend upon the terms and conditions of the policy.

The status of a Comprehensive Policy, has been elaborated in the Supreme Court’s case of National Insurance Co. Ltd. v. Balakrishnan, (2013) 1 SCC 731, where it was held that there is no doubt that a comprehensive policy covers the liability of the insurer for payment of compensation for the occupant in a car. 

Relying on this judgment, the Court set aside the order of the Tribunal  remanded the matter back to the Motor Accident Claims Tribunal, and directed them to hear and decide on the matter expeditiously.[Preeti Khetwal v. Uttarakhand Jal Vidyut Nigam Ltd., 2019 SCC OnLine Utt 760, decided on 06-08-2019]

Case BriefsHigh Courts

Madhya Pradesh High Court: Vivek Agarwal, J. while hearing two miscellaneous appeals analogously, refused to exonerate the Insurance Company and modified the impugned award of the claimant by an enhancement of Rs 70,378/-.

A miscellaneous appeal was filed by New India Insurance Company Limited challenging the award dated 04-02-2015 on two grounds, namely that the driver of the offending vehicle was not having licence to drive a commercial vehicle, namely ‘Vikram’ bearing No. MP-07-R-1602 and therefore, Insurance Company should have been exonerated of its liability and secondly, the accident took place when the claimant Faiziya Khan was crossing the road and therefore, aspect of contributory negligence should have been taken into consideration. While, the appellant-Faiziya Khan, had filed an appeal to enhance the award passed in order to compensate her for her injuries.

The learned counsel for the insurance company, Mr Shrinivas Gajendragadkar, put forth a two-fold argument that firstly, the driver of the offending vehicle did not have a license to drive a commercial vehicle; and secondly, that the claimant was negligent in crossing the road. The counsel further relied upon Halki Bai v. Managing Director, Rajasthan State Road Transport Corporation, 2004(3) T.A.C. 821(M.P.), to support his contention that since claimant was crossing the road negligently, therefore, it will be a case of contributory negligence. The claimant, Faiziya Khan, on the other hand, maintained that the award passed in her favor was inadequate as compared to her injuries and pains and needed to be enhanced.

The Court dismissed the appeal by the insurance company observing that the Halki Bai v. Managing Director, Rajasthan State Road Transport Corporation, 2004 (3) T.A.C. 821(M.P.), was not applicable here as in the present case it has been mentioned in a report that the accident took place due to fault in the steering of auto. In view thereof, it was held that there was no contributory negligence on the part of the claimant.

The Court also cited Mukund Dewangan v. Oriental Insurance Company Ltd., (2017) 14 SCC 663 in which the Court had held that if a driver is holding the license to drive a light motor vehicle, he can drive a transport vehicle of such class without any endorsement. By relying on the aforementioned judgment, the Court refused to exonerate the Insurance Company on the lack of endorsement of the driver.

Ruling on the claimant’s appeal, the Court modified the impugned award by enhancement of Rs 70,378 in favor of the claimant by increasing the compensation for livelihood, transport and future treatment.[New India Insurance Co. Ltd. v. Mohd. Ajiz, 2019 SCC OnLine MP 818, decided on 08-05-2019]

Case BriefsHigh Courts

Tripura High Court: The Bench of Arindam Lodh, J. allowed a revision petition under Section 397 read with Section 401 of Code of Criminal Procedure, 1973 and set aside the lower courts’ order acquitting the accused in a case filed under Section 138 of the Negotiable Instruments Act, 1881.

Petitioner herein (complainant before lower court) gave a loan of Rs 3.6 lakhs to the accused in three installments against which the respondent issued three post-dated cheques. When the petitioner tried to encash these cheques, they were dishonoured with the remark ‘insufficient funds’ in the account of the respondent. The petitioner served a statutory demand notice upon the respondent which went unresponded. Thereafter, he filed a complaint in the Trial Court charging the accused for dishonour of cheque. The Trial Court dismissed the case holding that the demand notice was invalid as it did not bear the signatures of petitioner’s Advocate.  Respondent’s acquittal was affirmed and upheld by the learned Sessions Judge. Aggrieved thereby, the instant revision petition was filed.

The Court opined that the decisions arrived at by the lower courts were perverse and unwarranted on both the points of facts and law, hence not sustainable. It was held that Section 138 proviso (b) does not stipulate that the notice is to be sent through an advocate. Further, each page of the demand notice had been signed by the complainant himself, and thus it was a valid notice in terms of Section 94 of the NI Act. It was observed that the object of notice of dishonor of cheque to endorser is not to demand payment, but to indicate to the party notified that his contract arising on the negotiable instrument has been broken and he is liable for payment.

Reliance was placed on Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., 2016 SCC Online SC 954, where it was held that a post-dated cheque issued as security towards payment of installments of a loan transaction falls within the purview of Section 138 NI Act. In view thereof, it was held that the respondent was liable under Section 138 of NI Act, and he was ordered to pay a fine of Rs 3,60,000 to the petitioner as compensation, failing which, he would be sentenced to simple imprisonment of six months.[Subal Chandra Ghosh v. State of Tripura, 2019 SCC OnLine Tri 134, decided on 25-04-2019]

Case BriefsHigh Courts

Orissa High Court: The Bench of Dr A.K. Rath, J. dismissed the suit for realization of the insurance money on the ground that no communication of renewal of the policy was made at the time of the alleged occurrence and no risk could be assumed in the absence of any valid policy.

The facts of the case were that the plaintiff was the owner of a shop, he availed a cash credit loan of Rs 20,000 from the State Bank of India. He had stock of Rs 30,000 in the shop. The Bank insured the shop with the New India Assurance Co. Ltd. After the expiration of the policy, he sent a letter along with a cheque of Rs 300 to defendant 1 for renewal of policy for another year. In the meanwhile, a theft was committed in the shop in which goods worth Rs 45,383 was stolen. The plaintiff claimed insurance money. The defendant, denying the liability pleaded that the plaintiff had not sent a letter along with a cheque of Rs 300 to defendant 1 for renewal of policy on time and it was received after the expiration of the policy, thus there was no risk covered on the day the theft happened as there was no policy on the date of the occurrence. Thus there was no liability to pay compensation.

The Court held that the cheque was sent after the expiry of the policy. No communication was made by the defendant to the plaintiff about the acceptance of the proposal. No policy was issued by the defendant. There was no concluded contract. Thus the defendant was not held to be liable to pay any amount towards the alleged loss sustained by the plaintiff. The appeal was thus dismissed. [Prasanna Kumar Acharya v. Oriental Insurance Co. Ltd., 2019 SCC OnLine Ori 157, decided on 10-04-2019]

Case BriefsHigh Courts

Kerala High Court: The Division Bench of K. Surendra Mohan and A.M. Babu, JJ. dismissed an appeal filed by a bank and concluded that deposit collectors, who act as agents of the bank, are ‘employees’ for the purpose of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act).

The instant appeal was filed assailing dismissal of a petition challenging order of Regional Provident Fund Commissioner whereby deposit collectors of the appellant bank were held to be persons to whom the EPF Act would apply, and accordingly, contributions were directed to be paid in respect of such employees.

The question herein was that whether contributions under the EPF Act is due or payable in respect of the commission that is paid to deposit collectors.

Mr M.R. Anison, learned counsel on behalf of the appellant submitted that deposit collectors are not ‘employees’ under the EPF Act. Therefore, no contributions under the EPF Act were either due or payable in respect of such employees.

The Court relied on Indian Banks Assn. v. Workmen of Syndicate Bank, (2001) 3 SCC 36 where it was held that deposit collectors are covered under the definition of ‘workmen’ in the Industrial Disputes Act, 1947. It was opined that commission paid to deposit collectors depends upon the terms of the agreement entered into between the bank and deposit collectors. An agent is paid commission at the rate or rates determined by the Board of Directors of the bank from time to time. Therefore, commission so paid to the deposit collectors constitutes their wages.

In view of the above, it was held that there was no infirmity in the impugned order.[South Malabar Gramin Bank v. Regional Provident Fund Commr., 2019 SCC OnLine Ker 843, Order dated 27-02-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Justice V.K. Jain (Presiding Member) set aside the order of District Forum and State Commission and set aside their orders holding a national bank liable for returning educational certificates of the complainant.

Respondent herein had taken a loan from the petitioner bank under Pradhan Mantri Rozgar Yojana (PMRY) Scheme in 1984. He stated that he had deposited his educational certificates with the bank on the assurance that after repayment of the loan, the said documents would be returned to him. After repayment of the loan, respondent approached the bank for return of his original documents; but the same were not returned to him. Being aggrieved, he approached District Forum by way of a consumer complaint. District Forum allowed the complaint, and the bank’s appeal against the said order was dismissed. Thus, the bank approached filed the instant revision petition.

The Commission noted that no documentary proof of the alleged deposit had been filed by the respondent. Petitioner, being a nationalized bank and respondent being an educated person, it was difficult to accept that he deposited such important documents with the bank, without even taking an acknowledgment from it. Moreover, no evidence had been led by the respondent to prove that the submission of such documents was necessary under rules of the bank or PMRY Scheme.

In the absence of any evidence, it was opined that the view taken by the fora was perverse, and therefore the impugned orders could not be sustained.[Allahabad Bank v. Subhash Kumar Mittal, 2019 SCC OnLine NCDRC 25, Order dated 01-03-2019]

Case BriefsHigh Courts

Bombay High Court: A Single Judge bench comprising of M.G. Giratkar, J. dismissed a revision petition filed against the judgment of Judicial Magistrate and confirmed by Additional Sessions Judge, Nagpur whereby the petitioner was convicted for offence punishable under Section 138 of Negotiable Instruments Act, 1881.

The petitioner and the complainant were businessmen. They entered into a transaction whereby the complainant provided a hand loan of Rs 50,000 to the petitioner. The petitioner issued a cheque which was presented to the bank by the complainant on default of repayment of the amount. It was returned by the bank with remark “insufficient fund”. The complainant initiated legal proceedings which culminated in petitioner’s conviction as mentioned above.

Notably, the complainant did not adduce any evidence to show that the advanced Rs 50,000 to the petitioner. However, he held a cheque and an acknowledgment slip. The petitioner did not dispute his signatures on the documents.

The High Court relied on K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 for the proposition that where signature on the cheque is admitted to be that of accused, the presumption envisaged in Section 118 of the Negotiable Instruments Act can legally be inferred that cheque was drawn for consideration on the date which it bears. Furthermore, Section 139 enjoins on the Court to presume that holder of the cheque received it for discharge of debt or liability and burden is on the accused to rebut this presumption. In the present case, nothing was brought on record to show that the accused did not receive Rs 50,000. Also, he did not deny his signatures on the cheque and acknowledgment. As such, the Court held that there was no illegality in the impugned judgment. Th revision petition was dismissed. [Amol v. State of Maharashtra, 2018 SCC OnLine Bom 6682, dated 22-12-2018]

Case BriefsForeign Courts

Supreme Court of Appeal of South Africa: This appeal was filed before a 5-Judge Bench comprising of Tshiqi, Swain and Dambuza, JJA., Mokgohloa and Mothle, AJJA.,  against a sentence of 5-year imprisonment for commission of offence of rape.

Respondent was indicted on three counts i.e. of housebreaking with intend to rob, rape read with Section 51(1), and robbery. He was convicted of theft and rape in terms of Section 51 (2) of the Minimum Sentences Act. Respondent submitted his personal circumstances that he was 19 years old studying in school Grade 10 and first offender of rape. It was submitted that he was under influence of liquor at the time of commission of crime. Trial Court on the basis of the above circumstances found personal circumstances of the respondent amounting to substantial and compelling circumstances and sentenced him 5 years imprisonment. Petitioner contended that respondent’s conviction of rape rendered him liable for punishment under Section 51(2) of the Minimum Sentences Act which prescribes a minimum sentence of 10 years’ imprisonment.

Therefore, appeal against sentence was upheld, sentence was set aside and replaced with a minimum sentence of 10 years’ imprisonment. [Director of Public Prosecutions Limpopo v. Koketso Motloutsi, Case No. 527 of 2018, dated 04-12-2018]

Case BriefsForeign Courts

Court of Appeal of Sri Lanka: An appeal was filed before a Single Judge Bench comprising of M.M.A. Gaffoor, J., against a judgment of district judge where the original plaintiff instituted an action seeking partition of a land.

Claim of plaintiff regarding the land was to receive undivided 1/2 share against the share of defendants whereas the two defendants were entitled to receive undivided 1/4 share according to his amended petition. The other defendants averted that they were exclusively entitled to the plantations and improvements in the land sought to be partitioned in this action. District court favoured the other defendants. Subsequently, the original plaintiff died and his son was substituted in his place as plaintiff-appellant who filed this appeal for setting aside of the above order of District Court.

Supreme Court observed after perusal of the plaint that the substituted plaintiff had amended the original plaint claiming that he was entitled to an undivided 1/2 share against two others entitled to an undivided 1/4 share while in the original plaint it was to be divided between four defendants. It was observed that substituted plaintiff was not completely aware of the facts of the case due to his admission of the fact that his father, the original plaintiff, was well aware of the facts of the case compared to himself and due to the same he had to amend the plaint. Appellant failed to show the existence of facts which could show his legal right or liability, thereby he failed to prove his case. Therefore, the appeal was dismissed. [Ahamed Abdulla Marikkar Mesthiriyar  Mohamed Ismail v. Sammon Hadjiar,2018 SCC OnLine SL CA 85, decided on 01-10-2018]

Case BriefsHigh Courts

Karnataka High Court: A Division bench comprising of Dinesh Maheshwari and Krishna N. Dixit, JJ. dismissed a writ petition filed by fugitive industrialist Vijay Mallya, against order requiring pre-deposit of Rs. 3101 crores in order to maintain appeal against fixation of liability for debt due to banks.

The factual background of the case revolves around the default in payment of debts taken by petitioner’s company Kingfisher Airlines Ltd. from a consortium of banks. The consortium of banks instituted a petition for recovery of their money in the Debt Recovery Tribunal (DRT), Karnataka wherein the petitioner was held liable for the recovery of money. Aggrieved by the said order, the petitioner preferred an appeal in Debt Recovery Appellate Tribunal (DRAT) which was dismissed for want of appearance and non-compliance of office objections. An application was filed by the petitioner seeking restoration of the appeal whereupon DRAT directed him to deposit a sum of Rs 3101 crores and observed that in case of failure of compliance, the appeal would be liable to dismissed automatically. The petitioner did not make such deposit and consequently, the appeal stood dismissed. Thereafter, the petitioner filed another application seeking restoration of the dismissed appeal and praying enlargement of time for making the deposit. The Hon’ble Tribunal dismissed this application holding that there was no substance in the prayers of petitioner. It is against this order of DRAT, that the instant writ petition has been filed, praying for quashing of the said order.

The court discussed the effect of amendment in the year 2016 on Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and opined that the amendment did not relate to the right of appeal as such but to the conditions subject to which the said right would become exercisable. It was noted that prior to the 2016 amendment, the borrower had an absolute and unconditional right to appeal and the proviso to Section 21 conferred power on DRAT to waive off or limit the condition of pre-deposit. But after the amendment, this absolute discretion of DRAT was restricted and now it only has the power to reduce the pre-deposit to not less than 25% of the decretal sum. This trimming of DRAT’s power being essentially an amendment by way of substitution was held to be retrospective in operation. In order to give force to its reasoning, the court relied on the decision of Full Bench of this High Court in Hassan Cooperative Milk Producers Societies Union Ltd. v State of Karnataka, 2014 SCC OnLine Kar 2924.

The High Court also adverted to the facts of the case and expressed serious doubts over bonafides of the proceedings and the seriousness of the petitioner in pursuing his remedies. As such, it was held that the DRAT’s requirement of pre-deposit for maintaining the appeal was legitimate and the writ petition was dismissed for being bereft of substance and merits. [Vijay Mallya v. State Bank of India, WP (C) No. 22111of 2018, decided on 05-10-2018]

Case BriefsSupreme Court

Supreme Court: A.M. Khanwilkar, J. delivered the judgment for CJ Dipak Misra and himself whereby the matter concerning the liability of the insurer to pay compensation in a motor accident claim was remanded back to the Allahabad High Court.

Respondents 1-5 filed a claim before the Motor Accident Claims Tribunal consequent to the death of one Sanoj Kumar. The deceased was going for morning walk when he was hit by a Bolero loader driven in a rash and negligent manner. The Tribunal absolved the liability of the insurer – Oriental Insurance Co. – on the finding that the driver of the said vehicle did not have a valid driving licence. However, the insurer was directed to compensation amount as determined with a liberty to recover the same from the owner and driver of the vehicle The said decision was affirmed by the High Court. Being aggrieved, the appellant – owner of the vehicle – filed the instant appeal.

The question before the Supreme Court was that ‘whether the Tribunal was right in holding that the insurer was not liable as the driver had a fake licence?’ The Court referred PEPSU Road Transport Corpn. v. National Insurance Co., (2013) 10 SCC 217 and Premkumari v. Prahlad Dev, (2008) 3 SCC 193. It was observed to be well established that if the owner was aware of the fact that the licence was fake and still permitted the driver to drive the vehicle, then the insurer’s liability would stand absolved. However, the mere fact that the driving licence is fake, per se, would not absolve the liability of the insurer. It was noticed that, in the present case, neither the Tribunal nor the High Court made any attempt to analyse as to whether the appellant was aware of the fake driving licence possessed by the driver. In such circumstances, the Court deemed it appropriate to relegate the parties before the High Court for fresh consideration of the matter only on question of liability of the owner or of the insurer to pay compensation. The appeal was disposed of in the terms above. [Ram Chandra Singh v. Rajaram,2018 SCC OnLine SC 959, dated 14-08-2018]