Section 138 nickel Act: will the arbitration continuing bar the plaintiff from filing or continued the criminal case of cheque bounce? [Read the Order]


There are often no bar to the cooccurring continuance of a criminal continuing and a civil continuing if the 2 arise from separate causes of action.
Supreme Court has command that simply as a result of arbitration proceedings are undertaken, the criminal proceedings of cheque bounce couldn’t be foiled.
bench of Justice Kabir and Justice Katju passed the order within the case titled as M/s Sri avatar Agencies vs State of A.P. on 11.11.2008.
Accused challenged a cheque bounce continuing and argued before the supreme court that since the appellant herein had already taken recourse to arbitration proceedings, the dispute was clearly of a civil nature and also the criminal grievance couldn’t be proceeded with. acceptive the statements created on behalf of suspect the supreme court quashed the grievance. plaintiff challenged the order before the Supreme Court.
Counsel for plaintiff in support of the charm, submitted that the supreme court has apparently confused the problem with reference to the continuance of the arbitration proceedings as conjointly the criminal proceedings, since once the cheques were dishonoured, a separate liability arose in terms of Section 138 of the Act, whereas the arbitration proceedings were beneath the agreement signed between the parties. it had been submitted by him that the commencement and also the continuance of the arbitration proceedings might in no means have an effect on criminal proceedings taken singly.
On behalf of suspect, the submissions that had been urged before the supreme court, were reiterated. Supreme Court but found those submissions unacceptable having relation to the choice in Trisuns industry vs. Rajesh Agarwal and Ors., (1999) eight SCC 686.
Supreme Court ultimately put aside the order of supreme court and allowed continuance of grievance by expression “We also are of the read that there are often no bar to the cooccurring continuance of a criminal continuing and a civil continuing if the 2 arise from separate causes of action. the choice in Trisuns Chemical Industry’s case (supra) seems to squarely cowl this case as well“.

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