Overruling its own 1998 decision in the Sadanandan Bhadrans case, the Supreme Court has held that a payee or a holder of a cheque can initiate prosecution proceeding on the second or successive dishonouring of the cheque if action has not been initiated on an earlier default.
Settling the law on bounced cheques, the apex court in the case of MSR Leathers vs S Palaniappan has now held that the initiation of proceedings under Section 138 of the Negotiable Instruments Act 1881 is permissible even if the complainant had failed to do so when the cheque bounced for the first time.
There is in our opinion no real or qualitative difference between a case where default is committed and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second or successive time, it said, adding that so long as the cheque is valid and so long as it is dishonoured upon presentation to the bank, the holders right to prosecute the drawer for the default committed by him remains valid and exercisable, it said. The apex court as well as high courts till now have been following the wrong judgment given in the Sadanandan Bhadran vs Madhavan Sunil Kumar case. According to the court, the object underlying Section 138 is to promote and inculcate faith in the efficacy of banking system, giving credibility to negotiable instruments in business transactions, to safeguard and prevent harassment of honest drawers and punish those unscrupulous persons who issue cheques for discharging their liabilities without really intending to honour the promise.
In the present case, the payee had not issued notice to MSR Leathers when the cheques for R10 lakh had bounced for the first time in August 1996. The cheque got dishonoured even for the second time in January 1997. This led to the filing of a complaint before the trial court, which rejected the complaint primarily on the ground that it was not filed within 30 days of the expiry of the notice based on the first default. However, the Madras High Court had quashed the lower courts orders.
Third parties rights in arbitration agreements
Stating that even a non-signatory party to an agreement can demand and be referred to arbitration under the Arbitration and Conciliation Act 1996, the Supreme Court in the case Chloro Control Ltd vs Severn Trent Water Purification Inc has referred the disputes between various parties to arbitration, which will be conducted according to the rules of the International Chamber of Commerce.
According to the apex court, in cases of group companies, where various agreements constitute a composite transaction with all other agreements ancillary to it and for complete implementation of this composite agreement, the court may have to make references to arbitration of the disputes existing between signatory or even non-signatory parties. However, the discretion of the court has to be exercised in exceptional, limiting, befitting and cases of necessity and very cautiously, it added.
In the current case, the top court said that all agreements executed between the parties were to further the Shareholders Agreement and were intended to achieve only one object, i.e. constitution and carrying on of business of chlorination products by the joint venture company in India and the specified countries. The parties having signed the various agreements, some containing an arbitration clause and others not, performance of the latter being dependent upon the principal agreement, reference to arbitration of the complete stated cause of action was inevitable, it said.
IT returns, performance report out of RTI ambit
The details of a persons income tax returns and performance of an employee are personal information which cannot be divulged under the provisions of the Right to Information Act unless a larger public interest is involved, the Supreme Court held in the case of Girish Ramchandra Deshpande vs Central Information Commissioner.
It added that the performance of an employee or officer in an organisation is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression personal information, the disclosure of which has no relationship to any public activity or public interest. The disclosure of such information would cause unwarranted invasion of privacy of that individual, it said while dismissing a plea against the denial of information regarding a government servants service matters and also the details of his assets and liabilities, movable and immovable properties.
However, the top court said that if the Central Public Information Officer or the State Public Information Officer was satisfied that the larger public interest justifies the disclosure of such information, appropriate orders could be passed. The information-seeker had approached the Regional Provident Fund Commissioner (Ministry of Labour) in 2008 seeking various details relating to a person employed as an Enforcement Officer.