Act/Law wise: Judgment of Supreme Court of India

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Negotiable Instruments Act, 1881 (India)
Section/Order/Article/Rule/Regulation Head Note
Section 138 and 143A

Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book–
In the present case, the Complaint was lodged in the year 2016 that is to say, the act constituting an offence had occurred by 2016 whereas, the concerned provision viz. Section 143A of the Act was inserted in the statute book with effect from 01.09.2018. The question that arises therefore is whether Section 143A of the Act is retrospective in operation and can be invoked in cases where the offences punishable under Section 138 of the Act were committed much prior to the introduction of Section 143A. We are concerned in the present case only with the issue regarding applicability of said Section 143A to offences under Section 138 of the Act, committed before the insertion of said Section 143A.
“143A. Power to direct interim compensation. – (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant –
(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and
(b) in any other case, upon framing of charge.
(2) The interim compensation under sub-section (1) shall not exceed twenty per cent of the amount of the cheque.
(3) The interim compensation shall be paid within sixty days from the date of the order under subsection (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.
(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial years, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.
(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).
(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973 (2 of 1974), shall be reduced by the amount paid or recovered as interim compensation under this section.”
Ultimate analysis, we hold Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book. Consequently, the orders passed by the Trial Court as well as the High Court are required to be set aside. The money deposited by the Appellant, pursuant to the interim direction passed by this Court, shall be returned to the Appellant along with interest accrued thereon within two weeks from the date of this order. The Appeal is allowed in aforesaid terms. …G.J. Raja =VS= Tejraj Surana, (Criminal), 2019 (2) [7 LM (SC) 261] ....View Full Judgment

Section 138, 139

Cheque dishonour–
The oral and the documentary evidence adduced by the complainant are sufficient to prove that it was a legally enforceable debt and that the cheques were issued to discharge the legally enforceable debt. With the evidence adduced by the complainant, the courts below ought to have raised the presumption under Section 139 of the Act. The evidence adduced by the respondent-accused is not sufficient to rebut the presumption raised under Section 139 of the Act. The defence of the respondent that though he made payment for the commodities/rice bags, the blank cheques were not returned by the appellant-complainant is quite unbelievable and unacceptable. The impugned judgment of the High Court cannot be sustained and is liable to be set aside.
The impugned judgment of the High Court in Criminal Appeal Nos.53 and 54 of 2006 is set aside and these appeals are allowed. The respondent-accused is convicted under Section 138 of Negotiable Instruments Act and a fine of Rs.2,97,150/- (Rs.53,171/- + Rs.1,93,979/- + compensation of Rs.50,000/-) is imposed on the respondent in default of which, the respondent shall undergo imprisonment for six months. The fine amount of Rs.2,97,150/- is to be deposited before the trial court within twelve weeks from today, failing which the respondent shall be taken into custody to serve the default sentence. On deposit of fine amount, the amount of Rs.2,97,150/- shall be paid to the appellant-complainant. …M/S Shree Daneshwari Traders =VS= Sanjay Jain, (Criminal), 2019 (2) [7 LM (SC) 268] ....View Full Judgment

Sections 138, 148

Cheque Dishonour–
The criminal complaints against the appellants under Section 138 of the N.I. Act were lodged/filed before the amendment Act No. 20/2018 by which Section 148 of the N.I. Act came to be amended and therefore amended Section 148 of the N.I. Act shall not be made applicable– The appellants submitted application/s under Section 389 of the Cr.P.C. to suspend the sentence pending appeals challenging the conviction and sentence, amended Section 148 of the N.I. Act came into force and was brought on statute w.e.f. 1.9.2018. Therefore, considering the object and purpose of amendment in Section 148 of the N.I. Act and while suspending the sentence in exercise of powers under Section 389 of the Cr.P.C., when the first appellate court directed the appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court, the same can be said to be absolutely in consonance with the Statement of Objects and Reasons of amendment in Section 148 of the N.I. Act.
Facts and circumstances of the case and considering the fact that the appellants were bonafidely litigating before this Court challenging the order passed by the first appellate court, in exercise of powers under Article 142 of the Constitution of India and in the peculiar facts and circumstances of the case and the amount to be deposited is a huge amount, we grant further four weeks’ time from today to the appellants to deposit the amount as directed by the first appellate court, confirmed by the High Court and further confirmed by this Court.
We see no reason to interfere with the impugned common judgment and order passed by the High Court dismissing the revision application/s, confirming the order passed by the first appellate court directing the appellants to deposit 25% of the amount of fine/compensation pending appeals. The instant appeals are accordingly dismissed with the aforesaid observations and appellants are now directed to deposit the amount directed by the first appellate court within extended period of four weeks from today. …Surinder Singh Deswal @ Col. S.S.Deswal =VS= Virender Gandhi, (Criminal), 2019 (2) [7 LM (SC) 284] ....View Full Judgment

Section 138

Appellant is acquitted of the charge under section 138 of the N.I. Act subject to payment–
Filed a complaint under Section 138 of the Negotiable Instruments Act in C.C. No.40274/2002 before the XVIII ACMM & XX ASCJ, Bangalore City. The Trial Court by its judgment dated 27.04.2004 acquitted the appellant/accused on the ground that the complainant has not proved the case beyond reasonable doubt as the documentary and also the oral evidence adduced by the appellant/accused substantiates. Being aggrieved, the said complainant preferred appeal before the High Court in Criminal Appeal No.895 of 2004, in and by which the High Court reversed the acquittal and convicted the appellant as aforesaid in paragraph (2). Being aggrieved, the appellant/accused is before us in this appeal by way of special leave. The Court of Small Causes and ACMM, Bangalore, which has at an amicable settlement. .....A.T. Sivaperumal =VS= Mohammed Hyath, (Criminal), 2017 (2)– [3 LM (SC) 53] ....View Full Judgment

Section-138

The appellants have proved their case by overwhelming evidence to establish that the two cheques were issued towards the discharge of an existing liability and legally enforceable debt. The respondent having admitted that the cheques and Pronote were signed by him, the presumption under S.139 would operate. The respondent failed to rebut the presumption by adducing any cogent or credible evidence. Hence, his defence is rejected. In view of the aforesaid facts and circumstances, the impugned order dated 27.09.2013 passed in Criminal Revision Petition Nos. 1657 and 1658 of 2008 is hereby set aside, and the order of Conviction and Fine passed by the Trial Court is restored. .....T.P. Murugan =VS= Bojan, (Criminal), 2018 (2) [5 LM (SC) 73] ....View Full Judgment

Section-138

The cheques issued by him were not ornamental but were meant to be presented if the amount in question was not paid within the extended period–
The trial court found the Respondent guilty and accordingly convicted him for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced him to undergo simple imprisonment for a period of one year. In addition, the trial court awarded compensation to the Complainant/Appellant in a sum of Rs.12,00,000/- to be paid within a period of three months.
The Respondent preferred Criminal Appeal No.9 of 2010 before Additional Sessions Judge, Kamrup at Guwahati, who, while upholding the conviction of the Respondent modified the sentence awarded to him to payment of a fine of Rs.2,000/- (Rupees Two Thousand only) and, a default sentence of imprisonment for a period of one month, in addition to the amount of compensation awarded by the trial court.
The High Court has, as seen earlier, set aside the conviction of the Respondent and allowed Criminal Revision No.41 of 2012.
A negotiable instrument is supported by consideration there was no dispute that such a consideration existed in as much as the cheques were issued in connection with the discharge of the outstanding liability against Nazimul Islam. At any rate the endorsement made by the respondent on the promissory note that the cheques can be presented for encashment after 25-09-2007 clearly shows that the cheques issued by him were not ornamental but were meant to be presented if the amount in question was not paid within the extended period. The High Court in our view fell in error in upsetting the conviction recorded by the Courts below who had correctly analysed the factual situation and applied the law applicable to the same. .....Don Ayengia =VS= The State of Assam (Criminal), 2016-[1 LM (SC) 600] ....View Full Judgment

Section 138 & 139

The trial court as well as the Appellate Court having found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank of the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. The accused even did not come in the witness box to support his case.
No evidence was led by the accused. The defence taken in the reply to the notice that cheque was stolen having been rejected by the two courts below, we do not see any basis for the High court coming to the conclusion that the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability. How the presumption under Section 139 can be rebutted on the evidence of PW.1, himself has not been explained by the High court. We are of the view that the High Court committed error in setting aside the order of conviction in exercise of revisional jurisdiction. No sufficient ground has been mentioned by the High Court in its judgment to enable it to exercise its revisional jurisdiction for setting aside the conviction. In the result, the appeal is allowed, judgment of the High Court is set aside and judgment of trial court as affirmed by the Appellate Court is restored. .....Kishan Rao =VS= Shankargouda, (Criminal), 2018 (2) [5 LM (SC) 77] ....View Full Judgment

Section 138

Cheque dishonour–
The High Court patently erred in holding that the burden was on the appellant-complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above.
The appeals are allowed. The judgment and order of the High Court is set aside. The conviction of the respondent under Section 138 of the Negotiable Instruments Act is confirmed. However, the respondent-accused is sentenced only to fine, which is enhanced to Rs.16 lakhs and shall be paid as compensation to the appellant complainant. The fine shall be deposited in the Trial Court within eight weeks from the date, failing which the sentence of imprisonment of one year as imposed by the Trial Court shall revive. There shall be no order as to costs. ...Bir Singh =VS= Mukesh Kumar, (Criminal), 2019 (1) [6 LM (SC) 94] ....View Full Judgment

Section 138, 141

Cheque dishonour–
The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished.
During the pendency of these proceedings, this Court on 28 November 2008 recorded the statement of the appellant that he was willing to deposit the entire cheque.
In our view, having regard to the intent of the order which was passed by this Court on 28 November 2008, it would be appropriate and proper if the amount deposited in this Court, together with accrued interest, is paid over to the respondentcomplainant. The criminal appeal is, accordingly, disposed of. ...Himanshu =VS= B. Shivamurthy, (Criminal), 2019 (1) [6 LM (SC) 90] ....View Full Judgment