Kerala High Court Sets Aside One-Line Dismissal Of Cheque Dishonour Appeal, Calls It 'Shocking'

On 17 June, the Kerala High Court set aside an appellate court order that had dismissed a cheque dishonour appeal for default, holding that courts cannot dispose of criminal appeals against conviction mechanically merely because the appellant or counsel remains absent. Justice A. Badharudeen held that an appellate court must independently re-appreciate the evidence and pass a reasoned judgment while deciding an appeal against conviction and sentence. He held: “…a judgment in a criminal case,...

Calcutta High Court Quashes Criminal Case Against SBI Officials, Says Dispute Was Purely Civil

On 17 June, the Calcutta High Court held that criminal proceedings cannot be used to pressurise parties in disputes that are essentially civil in nature and must disclose the essential ingredients of the alleged offences before a Magistrate can take cognisance. Justice Ajoy Kumar Mukherjee quashed criminal proceedings initiated against two State Bank of India officials who had been accused of offences under Sections 120B, 420, 409, 467, 468 and 471 of the IPC in connection with the auction sale...

NTA Committee's Approval Not Needed Before SARFAESI Action Against Property Of Person With Disability: Kerala HC

The Kerala High Court has held that a secured creditor proceeding under the SARFAESI Act is not required to obtain prior permission from the Local Level Committee constituted under the National Trust Act before proceeding against property in which a ward (a person with specified disabilities) has an interest. Justice P.V. Balakrishnan made the observation while dismissing a writ petition challenging SARFAESI proceedings initiated by Canara Bank against secured assets in which the second...

Calcutta High Court Holds Prepayment And Contractual Charges Form Part Of 'Debt' Under RDB Act

The Calcutta High Court on 10 June held that prepayment charges, commitment charges and processing fees arising from a lending transaction constitute “debt” under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993, and remain recoverable unless waived or extinguished, even after repayment of principal and interest. Justice Rai Chattopadhyay dismissed a writ petition filed by Maan Steel and Power Ltd challenging Indian Bank's refusal to release Fixed Deposit Receipts (FDRs) and issue...

Cheque Bounce Cases Cannot Be Allowed To Degenerate Into 'Interminable Litigation': Kerala High Court

The Kerala High Court has observed that proceedings in cheque dishonour cases cannot be allowed to "degenerate into interminable litigation", while dealing with a complaint instituted in 2004 that remained pending for more than two decades. Justice C.S. Dias made the observation while dismissing a petition filed by the accused seeking to stay and quash the prosecution and directing the Trial Court to dispose of the complaint within two months. “The object of Chapter XVII of the Negotiable...

SC Refuses To Interfere With HC Orders Involving Law Firm In Chennai Metro Compensation Contempt Case

Observing that the case involved allegations of a "complete fraud played upon the judicial system," the Supreme Court on Tuesday declined to interfere with Madras High Court orders that brought law firm The Legal Attorneys and Barristers into contempt proceedings stemming from allegations that Samarpana Charitable Trust secured ₹13.18 crore in Chennai Metro Land acqusition compensation after concealing an existing mortgage and ongoing recovery proceedings from the Court.A bench comprising Chief...

“Banks Are Dealing With Public Money”: Karnataka High Court Calls for Strict Adherence To RBI Guidelines

The Karnataka High Court recently observed that banks dealing with public money must exercise utmost caution while conducting their business and strictly follow RBI guidelines and internal circulars. The court warned that departures from prescribed procedures can adversely affect a bank's financial operations, create chaos in the banking system, and ultimately impact the country's economy. A Division Bench of Justice D.K. Singh and Justice T.M. Nadaf made the observation while setting aside...

DRT Chandigarh Sets Aside Indian Bank Auction, Awards Rs 30 Lakh Compensation To Auction Purchasers

The Chandigarh Debts Recovery Tribunal (DRT) has set aside Indian Bank's auction of two mortgaged plots secured against credit facilities availed by S.G.K. Industrial Corporation. The tribunal held that auctioning the plots as a single unit prejudiced the borrowers. It also found that the auction notice was not published 15 days before the sale. The Tribunal also directed the bank to pay Rs 30 lakh compensation to the auction purchasers and refund the sale consideration with interest, stamp...

Notice Returned As 'Unclaimed' At Correct Address Suffices For Deemed Service: Kerala High Court

A cheque demand notice returned with the postal endorsement "unclaimed" is sufficient to satisfy the statutory requirement of notice in a cheque dishonour case, the Kerala High Court has held. Justice A Badharudeen, allowing an appeal against an acquittal recorded by a magistrate's court in Kozhikode, held that when a demand notice is issued to the drawer's correct address, its return with the endorsement "unclaimed" would amount to deemed acceptance unless the accused proves otherwise. The...

Compromise In Commercial Disputes Warrants Closure Of 138 NI Act Proceedings: Punjab & Haryana High Court

The Punjab and Haryana High Court has compounded an offence under Section 138 of the Negotiable Instruments Act in a matter between Sunil Kumar and Mukesh Sharma after finding that the parties had voluntarily settled their dispute and the complainant had received the entire settlement amount in full and final satisfaction of his claim. A Bench of Justice Subhas Mehla held that continuation of proceedings in such commercial disputes serves no useful purpose once the settlement is acted upon and...

DRAT Kolkata Upholds Rejection of Bank-Borrower Settlement That Kept Auction Purchaser In the Dark

The Kolkata bench of the Debts Recovery Appellate Tribunal (DRAT) has upheld a DRT order refusing to accept a settlement between Indian Bank and its borrower. It found that the auction purchaser was kept in the dark despite being a party to the proceedings and despite a final order directing refund of the auction consideration having attained finality. Chairperson Justice Anil Kumar Srivastava observed: “When the order dated 07.03.2024 was passed by Learned DRT on merits setting aside the...

SARFAESI Auction Timelines Are Mandatory, Not Directory; Unjustified Deviation Vitiates Sale: Supreme Court

The Supreme Court on Tuesday set aside a SARFAESI auction sale of a mortgaged property after finding that the successful bidder paid the balance sale consideration five days after the deadline fixed for payment and that there was no written agreement extending the time. Holding that the lapse constituted a "material irregularity going to the root of the matter," the court quashed the sale. A bench of Justice Dipankar Datta and Justice Augustine George Masih observed that the auction purchaser...