Bussiness Law Presenttion

1. Presentation on
Negotiable Instrument Act,1881.
With Cases
Presented To:- Presented By:-
Prof. (Dr) Resham Chopra Khyati Patel
Sub.:- Legal Aspects Ashish Kumar Singh &
Sandhya Nair.
PGDM, Trim-1

2. OBJECTIVE…
For commercial transaction, it is always not
possible for a business man to carry huge
amount of cash. Business man , therefore adopt
a new method of exchanging documents- Bills of
Exchange, Cheques etc, in place of money.
These documents which are used as a
substitution for money are known as negotiable
instrument. The Law relating to negotiable
instrument is contained in the Negotiable
Instrument Act, 1881.

3. INRODUCTION
 The term Negotiable instrument literally means ‘a written
document transferable by delivery ’. According to this Act “A
negotiable instrument means a Promissory Note, Bill of exchange
or Cheque payable either to order or to bearer “.
 Negotiable Instruments can be of two kinds :-
1) Negotiable by Statute: The Act mentions only three kinds
of instruments by Law, i.e. Promissory Note , Bill of Exchange and
Cheque.
2) Negotiable by Custom or Usage: Other than above three,
all other custom and usage based locally negotiable instruments
belong to this type. Ex:- Hundis, Bankers Draft , Treasury Bill..etc

4. CASE 1: B.N.Tripathi v/s Rajendra Kumar Srivastava
Civil Court, Kanpur.
 Plaintiff: B.N.Tripathi
 Defendant: Rajendra Kumar Srivastava
 Case: Tripathi had taken a loan of Rs 35,000 in the year
November(2011) from complainant Rajendra Kumar
Srivastava for the marriage of his daughter. He passed a
cheque of loan amount to Rajendra Kumar just to clear his
dues. But the cheque was not honoured by his bank.
Despite the service of legal notice, the professor did not
return the loan amount.
 Decision: Special metropolitan magistrate J P Agarwal, on
Thursday (11th October), punished a professor of Chandra
Shekher Azad Agriculture University professor named as B
N Tripathi under Negotiable Instrument Act (cheque
bouncing) with one-year simple imprisonment and a fine of
Rs 70,000.

5. CASE 2: Modi Cements Ltd. vs Kuchil Kumar
Nandi
 Plaintiff: Modi Cements Ltd.
 Defendant: Kuchil Kumar Nandi (1998)
 Supreme Court of India.
 Case: Kuchil Kumar Nandi draws a cheque in favour of
Modi Cements Ltd. After having issued the cheque he
informs Modi Cements Ltd not to present the cheque for
payment. He also informs the bank to stop payment.
Under provisions of the Negotiable Instruments Act, 1881,
the said acts of Kuchil Kumar Nandi constitute an offence
against him.
 Result declared as-The object of Sections 138 to 142 of the
Act is to promote the efficacy of the banking operations
and to ensure credibility in transacting business through
cheques.Because of insufficiency of amount to honour the
cheques or the amount exceeding the arrangement made

6. Case 3:Rajkumar Santoshi v/s PVR Pictures
 Plaintiff: PVR Pictures
 Defendant: Rajkumar Santoshi .
 Case: Rajkumar Santoshi gave a cheque for 50 lakh against the
advance for filmmaking to PVR Pictures, which did not get
cleared due to "insufficient funds", so a cheque-bouncing case
has been filed against the director at the Metropolitan
Magistrate's Court in Delhi by PVR Pictures.
 Jurisdiction: The PVR lawyers sent a legal notice to Santoshi
demanding the payment but he failed to make it on the due date.
The court has issued the summons to Santoshi to appear on
October 7, 2012.

7. CASE 4: Rajkumar Sahajwani of Saibaba Investment v/s
Sadhu Manjwani
 Plaintiff: : Rajkumar Sahajwani of Saibaba Investment
 Defendant: Sadhu Manjwani.
 Nagpur Bench Of Bombay High Court.
 Case: Saibaba Investment was engaged in the business
of sale and purchase of shares and securities. Various
transactions of sale and purchase of shares,
debentures and securities were entered into between
the firm and respondent Sadhu Manjwani between
February 1995 and March 1996.
The outstanding amount against Manjwani was Rs4.46
lakh. The firm then entered into mutual agreement with
him for clearing their dues. However, the cheque was
dishonoured and returned unpaid with endorsement
'payment stopped by the drawer.

8. Continue….
Judgment Given: Sahajwani then lodged a
complaint in the capacity of power of attorney
holder under NI Act in the sessions court which
was dismissed on the point of non-maintainability
of the complaint for want of authorization from the
sole proprietor of Saibaba Investments - Jyoti
Sahajwani - who was payee of the cheque. He
then challenged this judgment in the high court,
but it was also dismissed as the petitioner failed
to provide other documents apart from power of
attorney.

9. CASE 5: Nunna Gopalan vs Vuppuluri
Lakshminarasamma on 25 October, 1939.
 Plaintiff: Nunna Gopalan
 Defendant: Vuppuluri Lakshminarasamma .
 Madras High Court.
 Case: On 10th December 1933 the respondent executed a
promissory note in favour of one Maddipati Tattabayi,
alias Tata, defendant 2 in the suit out of which this petition arises.
The respondent saya that she paid the
amount due on the promissory note two days later, but the
instrument was left in the hands of the payee, who
the next day endorsed it to the petitioner. The petitioner instituted a
suit on the promissory note in the Court of
the District Munsif of Kovvur.

11. CASE 6: Indo Polycoats Pvt Ltd v/s
Gopal Goyal Kanda
 Plaintiff: Indo Polycoats Pvt Ltd
 Defendant: Former Haryana minister Gopal Goyal Kanda &
Brother.
 New Delhi Trial Court.
 Case: The cheque bounce case was registered in 1997
against Gobind and Gopal on the complaint of Indo
Polycoats Pvt Ltd, engaged in manufacturing of coated
fabrics and vinyl flooring. In August 1997, the complainant
had got a request from Kanda's company “Kanda Polymers”
for supply of coated fabrics. Two cheques of Rs 2 lakh and
Rs 2.10 lakh were issued by Gobind, as authorised signatory
of the firm, in the name of the complainant firm and a case
under the Negotiable Instruments Act was filed against the
Kanda brothers as the cheques got dishonoured due to

12. Thank You