# In the matter of Shri Gurudatta Sugars Marketing Pvt. Ltd. vs. Prithviraj Sayajirao Deshmukh & Ors.

> SC judgment dated 2024-07-24. Citation: TCN-2024-SC-00050. The case involves appeals challenging judgments and orders passed by the Bombay High Court, which…

- **Court:** SC
- **Order date:** 24 Jul 2024
- **Citation:** TCN-2024-SC-00050
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/shri-gurudatta-sugars-marketing-pvt-ltd-vs-prithviraj-sayajirao-deshmukh-ors-31f7fc03

## Summary

### Background

The case involves appeals challenging judgments and orders passed by the Bombay High Court, which had allowed criminal applications filed by the respondents, setting aside the Judicial Magistrate's order directing interim payment under Section 143-A of the Negotiable Instruments Act, 1881. The appellant company had entered into agreements with Cane Agro Energy (India) Ltd. for the supply of sugar, making advance payments. Disputes arose when Cane failed to supply the agreed quantities of sugar. Subsequently, the respondents issued cheques that were dishonoured, leading to a complaint filed by the appellant before the Judicial Magistrate. Cane was admitted into Corporate Insolvency Resolution Process (CIRP) by the National Company Law Tribunal (NCLT), Mumbai. The

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## Facts

Shri Gurudatta Sugars Marketing Pvt. Ltd. (appellant) entered into agreements with Cane Agro Energy (India) Ltd. (Cane) between September 2016 and June 2017, making advance payments of Rs.63,46,00,000 for sugar supply. Cane allegedly failed to supply the sugar. Cane refunded Rs.1,00,00,000 on 2018-01-30. Subsequently, Prithviraj Sayajirao Deshmukh & Ors. (respondents), directors of Cane, issued two cheques totaling Rs.51,64,41,300 in favor of the appellant on 2020-03-30. These cheques were dishonored due to insufficient funds, with return memos dated 2020-06-02. The appellant issued a notice on 2020-06-18 to the respondents demanding payment, which was served on 2020-06-30. The appellant filed a complaint before the Judicial Magistrate, First Class, Kolhapur,

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## Issues and analysis

### Issue 1: Whether the signatory of the cheque, authorized by the "Company", is the …

**Ratio:** The 'drawer' under Section 143A of the Negotiable Instruments Act refers specifically to

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**Reasoning:** The High Court's interpretation of Section 7 of the NI Act accurately identifies the

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**Interpretation:** Section 143A of the NI Act should be interpreted plainly, without resorting to

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**Application:** The appellants' attempt to extend the principle of liability under Section 141

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## Parties

- **Judges:** VIKRAM…; PRASHANT KUMAR…
- **Appellants:** GURUDATTA SUGARS…
- **Respondents:** Cane Agro Energy…; PRITHVIRAJ…

## Timeline

- **2016-09-01 — Agreements and Sale…**: Appellant company entered into several Agreements and Sale Orders with Cane Agro Energy…
- **2017-06-01 — Agreements and Sale…**: Appellant company entered into several Agreements and Sale Orders with Cane Agro Energy…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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