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

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

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

The Negotiable Instruments Act, 1881
Section 138
CrPC
Section 391
The appellant preferred an appeal before the Principal Sessions Judge, Gandhinagar and during pendency thereof, he filed an application under Section 391 CrPC for taking additional evidence at appellate stage and seeking a direction to obtain the opinion of the handwriting expert after comparing the admitted signature of the accused appellant and the signature as appearing on the disputed cheque. Another prayer made in the said application was that the concerned officer from the Post Office should be summoned so as to prove the defence theory that the notice under Section 138 of NI Act was never received by the accused appellant. The appellant had sought for comparison of the signature as appearing on the cheque through the handwriting expert by filing an application before the trial Court which rejected the same vide order dated 13th June, 2019. The said order was never challenged and had thus attained finality. So far as the allegation of the accused appellant that he did not receive the notice under Section 138 of the NI Act is concerned, it would be for the appellate Court while deciding the appeal to examine such issue based on the evidence available on record and thus, there was no requirement for the appellate Court to have exercised power under Section 391 CrPC for summoning the official from the Post Office and had rightly rejected the application under Section 391 CrPC. .....Ajitsinh Chehuji Rathod =VS= State of Gujarat, (Criminal), 2024(2) [17 LM (SC) 1] ....View Full Judgment

In fact even we notice that there is no reference to the loss of the cheque book or signed cheque leaf. No complaint was given of the loss of the cheque book or the signed cheque leaf either to the police or to the bank– Supreme Court would think that in the totality of facts of this case the appellant has not established a case for interference with the finding of the Courts below that the offence under Section 138 N. I. Act stands committed by the appellant. This Court has been told that the amount of compensation in a sum of Rs.7 Lakhs which is relatable to the cheque amount has been deposited already in the Trial Court. However, this Court would think that the appellant should be granted relief in the form of substitution of the sentence of imprisonment of one year with a fine. An amount of Rs.5,000/-(Five thousand) commends itself to us as an amount which should suffice as substitution for the imprisonment. Apart from that, this Court would also direct that a further amount of Rs.15,000/- shall be paid as compensation to the respondent. The appeal is partly allowed. While this Court upholds the conviction, this Court direct that sentence of imprisonment of one year shall stand vacated. However, the appellant shall stand sentenced to fine of Rs.5,000/- which he will deposit within a period of one month from today in the Trial Court. In case of default, the appellant shall undergo simple imprisonment for a period of one month. The appellant shall also deposit a sum of Rs.15,000/- as further compensation which can be withdrawn by the respondent. The deposit shall be made in the Trial Court within a period of four weeks from today. .....Tedhi Singh =VS= Narayan Dass Mahant, (Criminal), 2022(1) [12 LM (SC) 10] ....View Full Judgment

Negotiable Instruments Act, 1881
Section 138
CrPC
Section 200
An abuse of the process of law— The respondent filed the complaint bearing Criminal Case No. 648 of 2016 before JMFC, Kalwan, alleging the commission of an offence punishable under Section 138 of the NI Act on 15th December 2016 in relation to dishonoured Cheque No.010722. The JMFC issued the process on 2nd March 2017. Challenging the issuance of process, the appellant filed a Criminal Writ Petition No. 2316 of 2017 before the Hon’ble High Court of Bombay, which was dismissed by the impugned order dated 18th December 2023. The High Court found no infirmities in the order of the JMFC issuing process and held that the contentions raised by the appellant could only be decided at trial.
While filing a complaint under Section 200 of CrPC and recording his statement on oath in support of the complaint, as the complainant suppresses material facts and documents, he cannot be allowed to set criminal law in motion based on the complaint. Setting criminal law in motion by suppressing material facts and documents is nothing but an abuse of the process of law. Hence, the High Court ought to have interfered and quashed the complaint. Accordingly, the impugned order of the High Court is set aside. The complaint bearing S.C. No. 648 of 2016 pending in the court of the learned Judicial Magistrate First Class at Kalwan and the order of cognizance dated 2nd March 2017 are hereby quashed and set aside. .....Rekha Sharad Ushir =VS= Saptashrungi Mahila Nagari, (Criminal), 2025(2) [19 LM (SC) 27] ....View Full Judgment

Negotiable Instruments Act, 1881
Section 138
Cr.P.C.
Section 255(2), 255(3)
Bhartiya Nagarik Suraksha Sanhita, 2023
Section 278
Probation of Offenders Act, 1958
This Court is of the view that if the Accused is willing to pay in accordance with the aforesaid guidelines, the Court may suggest to the parties to go for compounding. If for any reason, the financial institutions/complainant asks for payment other than the cheque amount or settlement of entire loan or other outstanding dues, then the Magistrate may suggest to the Accused to plead guilty and exercise the power under Section 255(2) and/or 255(3) of the Cr.P.C. or 278 of the BNSS, 2023 and/or give the benefit under the Probation of Offenders Act, 1958 to the Accused. The appeal is allowed. The impugned order passed by the High Court dated 16th April, 2009 is set aside and the judgment as well as the orders of Trial Court and Sessions Court are restored with a direction to the Respondent No.1-Accused to pay Rs.7,50,000/- (Rupees Seven Lakhs Fifty Thousand) in 15 (fifteen) equated monthly instalment of Rs.50,000/- (Rupees Fifty Thousand) each. The High Courts and District Courts shall implement the aforesaid guidelines not later than 01st November, 2025. .....Sanjabij Tari =VS= Kishore S. Borcar, (Criminal), 2025(2) [19 LM (SC) 34] ....View Full Judgment

Negotiable Instruments Act, 1881
Section 138
IPC
Section 174A
Compromise has been effected wherein the matter has been settled— The original offence pertains to the year 2010; the money subject matter of dispute stands paid, the judgment of the High Court with the particulars as mentioned in paragraph 1 of this judgment, stands quashed and set aside. All criminal proceedings, inclusive of the FIR under Section 174A IPC, shall stand closed. The Appellant’s status, as a ‘proclaimed person’ stands quashed. .....Daljit Singh =VS= State of Haryana, (Criminal), 2025(2) [19 LM (SC) 47] ....View Full Judgment

Considering his age, he may be only subjected to fine and not imprisonment— On an overall circumspection of the entire facts and circumstances of the case, Supreme Court finds that the appellant succeeded in establishing his case and the Orders passed by the Trial Court and the Appellate Court did not warrant any interference. The High Court erred in overturning the concurrent findings of guilt and consequential conviction by the Trial Court and the Appellate Court.
Considering his age, he may be only subjected to fine and not imprisonment, Supreme Court is inclined to modify the sentence to only payment of a fine restricted to Rs.32,00,000/- (Rupees Thirty-Two Lakhs). Acceding to the request by the learned senior counsel, such fine be paid within four months from today to the appellant, failing which the sentence in entirety, as awarded by the Trial Court and upheld by the Appellate Court, will stand restored, with the added modification that the entire fine of Rs.35,00,000/- (Rupees Thirty Five Lakhs) will be payable to the appellant. .....Ashok Singh =VS= State of Uttar Pradesh, (Criminal), 2025(2) [19 LM (SC) 54] ....View Full Judgment

Negotiable Instruments Act, 1881
Section 138 r/w Section 141
Code of Criminal Procedure, 1973
Section 482
Non-executive directors cannot be held liable under section 138 NI Act unless specific evidence proves their active involvement— Perusal of the record and submissions of the parties, it is evident that the Appellant was neither a signatory to the dishonoured cheques nor was he actively involved in the financial decision-making of the company. Moreover, he resigned from the post of independent non-executive director on 03.05.2017, duly notified through Form DIR-11 and DIR-12 to the Registrar of Companies. The complaints do not contain any specific averments detailing how the Appellant was responsible for the dishonoured cheques.
The legal precedents cited above, including Pooja Ravinder (supra), clearly hold that non-executive directors cannot be held liable under section 138 NI Act unless specific evidence proves their active involvement. The Impugned Judgment and Order dated 06.08.2019 of the High Court is set aside, and the criminal proceedings against the Appellant in Complaint Nos. 66/SS, 645/SS, 697/SS, 1595/SS (all) of 2017 pending against the present Applicant before the Learned Metropolitan Magistrate 28th Court, Esplanade, Mumbai are hereby quashed. .....Kamalkishor Shrigopal Taparia =VS= India Ener-Gen, (Criminal), 2025(2) [19 LM (SC) 64] ....View Full Judgment

Negotiable Instruments Act, 1881
Section 138 r/w Section 141
Code of Criminal Procedure, 1973
Section 482
Appellant(s) attended board meetings does not suffice to impose financial liability on the Appellant(s), as such attendance does not automatically translate into control over financial operations— It is evident that the Appellant(s) neither issued nor signed the dishonoured cheques, nor had any role in their execution. There is no material on record to suggest that they were responsible for the issuance of the cheques in question. Their involvement in the company’s affairs was purely non-executive, confined to governance oversight, and did not extend to financial decision making or operational management.
The complaint lacks specific averments that establish a direct nexus between the Appellant(s) and the financial transactions in question or demonstrate their involvement in the company’s financial affairs. Additionally, the CGR(s) and ROC records unequivocally confirm their non-executive status, underscoring their limited role in governance without any executive decision-making authority. The mere fact that Appellant(s) attended board meetings does not suffice to impose financial liability on the Appellant(s), as such attendance does not automatically translate into control over financial operations. Accordingly, the Impugned Judgment and Order dated 28.11.2023 of the High Court is set aside, and the criminal proceedings against the Appellant(s) in Complaint No(s). 15858 and 15857 of 2017 pending before the Court of Additional Chief Metropolitan Magistrate,New Delhi are hereby quashed. The appeals are allowed. .....K. S. Mehta =VS= M/S Morgan Securities & Credits Pvt., (Criminal), 2025(2) [19 LM (SC) 69] ....View Full Judgment

Negotiable Instruments Act, 1881
Section 138
Criminal Procedure Code, 1973
Section 482
Insolvency and Bankruptcy Code, 2016
Section 17
When the notice was issued to the appellant, he was not in charge of the corporate debtor— The appellant did not have the capacity to fulfil the demand raised by the respondent by way of the notice issued under clause (c) of the proviso to Section 138 NI Act. When the notice was issued to the appellant, he was not in charge of the corporate debtor as he was suspended from his position as the director of the corporate debtor as soon as IRP was appointed on 25.07.2018. Therefore, the powers vested with the board of directors were to be exercised by the IRP in accordance with the provisions of IBC. All the bank accounts of the corporate debtor were operating under the instructions of the IRP, hence, it was not possible for the appellant to repay the amount in light of section 17 of the IBC. Additionally, Supreme Court has been informed on behalf of the appellant that, after the imposition of the moratorium, the IRP had made a public announcement inviting the claims from the creditors of the Corporate Debtor and the respondent has filed a claim with the IRP.
Supreme Court is of the considered view that the High Court ought to have quashed the case against the appellant by exercising its power under section 482 of the CrPC. Therefore, this Court allow this appeal by setting aside the impugned order dated 21.12.2021 and quash the summoning order dated 07.09.2018. Further, this Court hereby quash the complaint case no.15580/2018, pending before the Chief Judicial Magistrate Court, Chandigarh, filed by the respondent against the appellant. .....Vishnoo Mittal =VS= M/S Shakti Trading Company, (Criminal), 2025(2) [19 LM (SC) 75] ....View Full Judgment

Dishonour of 7 cheques– The matters relating to 7 cheques issued by the appellant in favour of respondent No. 2 for a sum of Rs. 3 lakhs each are being considered together; and the appellant is being penalised with double the amount of cheques in each case i.e., in all a sum of Rs. 42,00,000/-, in our view, the appellant deserves to be extended another chance to mend himself by making payment of fine, in case of default in payment of the amount of fine, he would undergo simple imprisonment for a period of one year.
The sentence is modified in the manner that in each of these 7 cases, the accused-appellant shall pay fine to the extent of double the amount of each cheque (i.e., a sum of Rs. 6 lakhs in each case) within 2 months from today with the stipulation that in case of default in payment of fine, the accused-appellant shall undergo simple imprisonment for a period of one year. On recovery of the amount of fine, the complainant-respondent No. 2 shall be compensated to the tune of Rs. 5.5 lakhs in each case. In the event of imprisonment for default in payment of fine, the sentences in all the 7 cases shall run concurrently. …Rohitbhai Jivanlal Patel =VS= State of Gujarat, (Criminal), 2020 (1) [8 LM (SC) 15] ....View Full Judgment

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

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

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

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

Modified order– Cheque dishonour– Appellant No.2 would be liable to undergo the sentence of simple imprisonment as awarded by the High Court. However, given the peculiar facts and circumstances of the case, namely, that the appellants volunteered and thereafter have deposited the cheque amount with the Registry of this Court in the year 2018, we are inclined to take a lenient view. The impugned judgment of the High Court dated 09112017 is thus modified, and it is directed that Appellant No.2 shall not be required to undergo the awarded sentence. ...M/s. Kalamani Tex =VS= P. Balasubramanian, (Criminal), 2021(1) [10 LM (SC) 6] ....View Full Judgment

Quashed and set aside– The appellant herein is neither a Director nor a partner in any firm who has issued the cheque. Therefore, even the appellant cannot be convicted with the aid of Section 141 of the NI Act. Therefore, the High Court has committed a grave error in not quashing the complaint against the appellant for the offence punishable under Section 138 r/w Section 141 of the NI Act. The criminal complaint filed against the appellant for the offence punishable under Section 138 r/w Section 141 of the NI Act, therefore, can be said to be abuse of process of law and therefore the same is required to be quashed and set aside.
The impugned judgment and order dated 21.08.2019 passed by the High Court in Criminal Writ Petition No. 2595 of 2019 refusing to quash the criminal complaint against the appellant for the offence punishable under Section 138 read with Section 141 of the NI Act is hereby quashed and set aside. The complaint case pending in the Court of the learned Metropolitan Magistrate filed by respondent No. 1 – original complainant being C.C. No. 2802/SS/2016 is hereby quashed and set aside. The appeal is allowed accordingly. ...Alka Khandu Avhad =VS= Amar Syamprasad Mishra, (Criminal), 2021(1) [10 LM (SC) 11] ....View Full Judgment

The Negotiable Instruments Act, 1881
Sections 138, 143(A), 145(2)
The Criminal Procedure Code, 1973
Section 357
The remedy for failure to pay interim compensation as directed by the court is thus provided for by the Legislature–– The right to cross-examine the respondent was denied to the Appellant, the decisions rendered by the courts below suffer from an inherent infirmity and illegality. Therefore, Supreme Court have no hesitation in allowing this appeal and setting aside the decisions of all three courts with further direction that Complaint Case No. 244 of 2019 shall stand restored to the file of the Trial Court. The Trial Court is directed to permit the Appellant to cross-examine the Respondent and then take the proceedings to a logical conclusion. With these observations the appeal is allowed.–– It is also directed that 20% of the cheque amount namely Rs.1,40,000/- must be deposited by the Appellant as interim compensation. .....Noor Mohammed =VS= Khurram Pasha, (Criminal), 2022(2) [13 LM (SC) 1] ....View Full Judgment

Employees’ State Insurance Act, 1948
Section 85(a)
Sick Industrial Companies (Special Provisions) Act, 1986
Sections 22(1) or 22A
Negotiable Instruments Act, 1881
Section 138
The Madras High Court ruled that an order declaring a company sick under the Sick Industrial Companies (Special Provisions) Act, 1986 did not prohibit criminal proceedings against such company, under Sections 22(1) or 22A thereof— The Trial Court on 28.09.2013 convicted the Appellant under Section 85(i)(b) of the Act and sentenced him to undergo imprisonment for six months along with a fine of Rs.5000/- (Rupees Five Thousand). Aggrieved, the Appellant and Respondent No.2 filed Criminal Appeal No.553/2013, before the Principal City Civil and Sessions Judge, Bangalore which was subsequently transferred to the Fast Track Court VI, Bangalore (hereinafter referred to as the ‘First Appellate Court’). The First Appellate Court on 14.11.2014 upheld the order of conviction and sentence passed by the Trial Court and dismissed Criminal Appeal No.553/2013. Aggrieved by such Order of the First Appellate Court, the Appellant and Respondent No.2 filed Criminal Revision Petition No.164 of 2015 before the High Court. The High Court by the Impugned Order dated 08.12.2023 dismissed the Revision Petition of the Appellant and Respondent No.2 on the ground that the evidence on record clearly established that the Appellant was General Manager and Principal Employer of Respondent No.2 and it was also established that a contribution of Rs.8,26,696/- (Rupees Eight Lakhs Twenty-Six Thousand Six Hundred and Ninety-Six) was deducted during the period 01.02.2010 to 31.12.2010 from the employees of Respondent No.2, but not remitted to the ESIC.
The High Court rightly indicated that non-remittance of the contribution deducted from the salary of an employee to the ESIC is a offence under Section 85(a) of the Act and punishable under Section 85(i)(a) of the Act but the Trial Court had imposed a lesser sentence as provided under Section 85(i)(b) of the Act. This is clearly borne out by Section 85(i)(a) of the Act which provides for a sentence of not less than one year imprisonment and fine of Rs.10,000/- (Rupees Ten Thousand), since the amount had been deducted from the salaries of the employees and not paid, which is the fact in the present case, whereas under Section 85(i)(b) of the Act, sentence of imprisonment is not less than six months and with fine of Rs.5,000/- (Rupees Five Thousand) in other cases. Of course, the Trial Court could have given a lesser sentence even for an offence under Section 85(i)(a) of the Act under the proviso to Section 85(i) of the Act. Overall, the High Court did not feel the necessity to interfere in the lesser sentence awarded by the Trial Court. Thus, Supreme Court finds that the conviction and the sentence does not require any interference, much less in the present case, where despite contributions having been deducted from the employees’ salaries, they were not deposited with the ESIC. Accordingly, the appeal, being devoid of merit, stands dismissed. The Appellant is directed to undergo the sentence after setting off the period already undergone, if any and pay the fine, if not already paid, as awarded by the Trial Court. The exemption from surrendering granted by order dated 18.03.2024 stands withdrawn. The appellant shall surrender before the Trial Court within two weeks from today. .....Ajay Raj Shetty =VS= Director, (Criminal), 2025(2) [19 LM (SC) 80] ....View Full Judgment

It is a settled proposition of law that the standard of proof in criminal proceedings differs with that in civil proceedings. ––In the facts and circumstances of the present case, the decree needs to be modified restricting it to the amount already deposited by the appellants in both the proceedings with interest accrued thereon. In the result,
(i) Criminal Appeal Nos. 1978 of 2013 and 1990 of 2013 are allowed and the common judgment of conviction dated 28th October 2008 and order of sentence dated 30th October 2008 respectively are quashed and set aside. The judgments and orders dated 10th July 2011 passed by the learned Trial Court is confirmed.
(ii) Civil Appeal Nos. 10500 of 2013 and 10501 of 2013 are dismissed. However, the decrees of the High Court are modified, thereby restricting them to the amount already deposited by the appellants in this Court in the civil and criminal proceedings, along with interest accrued thereon.
(iii) The respondents in both the Civil Appeals would be entitled to withdraw 50% of the amount each from the amount deposited in this Court with interest accrued upto date. .....Rajaram =VS= Maruthachalam, (Criminal), 2023(1) [14 LM (SC) 14] ....View Full Judgment

Insolvency and Bankruptcy Code, 2016
Section 79(15), 96
Negotiable Instruments Act, 1881
Section 138
Consumer Protection Act, 1986
Section 27
The damages awarded by the NCDRC arise from a consumer dispute, where the appellant has been held liable for deficiency in service. Such damages are not in the nature of ordinary contractual debts but rather serve to compensate the consumers for loss suffered and to deter unethical business practices— The appellant argues that all debts and all proceedings relating to debt are automatically stayed under Section 96 of the IBC. The respondents, on the other hand, contend that the penalties imposed by NCDRC are distinct from "debt recovery" proceedings and should not fall within the ambit of the interim moratorium.
In the present case, the damages awarded by the NCDRC arise from a consumer dispute, where the appellant has been held liable for deficiency in service. Such damages are not in the nature of ordinary contractual debts but rather serve to compensate the consumers for loss suffered and to deter unethical business practices. Courts and tribunals, including the NCDRC, exercise their statutory jurisdiction to award such damages, and these are distinct from purely financial debts that may be subject to restructuring under the IBC. Since such damages are covered under "excluded debts" as per Section 79(15) of the IBC, they do not get the benefit of the moratorium under Section 96 of the IBC, and their enforcement remains unaffected by the initiation of insolvency proceedings.
The present case does not involve a mere financial dispute but concerns the enforcement of consumer rights through regulatory penalties. Given that the legislative intent behind the CP Act is to ensure compliance with consumer welfare measures, staying such penalties would be contrary to public policy. Further, the appellant cannot invoke insolvency proceedings as a shield to evade statutory liabilities. The objective of the IBC is to provide a mechanism for resolving financial distress, not to nullify obligations arising under regulatory statutes. The penalties imposed by the NCDRC are regulatory in nature and do not constitute "debt" under the IBC. The moratorium under Section 96 of the IBC does not extend to regulatory penalties imposed for non-compliance with consumer protection laws. The appeal is accordingly dismissed, and the appellant is directed to comply with the penalties imposed by the NCDRC within a period of eight weeks from the date of this judgment. .....Saranga Anilkumar Aggarwal =VS= Bhavesh Dhirajlal Sheth, (Civil), 2025(2) [19 LM (SC) 1] ....View Full Judgment

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

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

Quashment of proceedings— Applying the said legal position to the facts of the present case, it is found that the averments in the complaint set out hereinabove against the respondent No.2 – Mrs. Ranjana Sharma fulfill the requirement of Section 141(1) of the NI Act, and this is not a case where trial against her can be aborted by quashment of proceedings. The High Court was completely unjustified in quashing the proceedings against her. The appeal is, accordingly, allowed and the judgment of the High Court of Judicature at Bombay dated 10.01.2024 in Criminal Writ Petition No. 275 of 2022 is set aside. Consequently, the order dated 16.12.2019 issuing process to respondent No.2 in proceeding in C.C. No. 2486/SS/2019 is restored to the file of the Metropolitan Magistrate, 7th Court, Bhiwandi, Dadar, Mumbai to be proceeded with in accordance with law. .....HDFC Bank Limited =VS= State of Maharashtra, (Criminal), 2025(2) [19 LM (SC) 89] ....View Full Judgment

The High Court correctly observed that three categories of persons were covered by Section 141 of the NI Act – the company who committed the offence as alleged; everyone who was in-charge of or was responsible for the business of the company and any other person who was a Director or a Manager or a Secretary or Officer of the Company with whose connivance or due to whose neglect the company had committed the offence. The judgment and order of the High Court is set aside. Criminal Case No. AC/121/2017 pending under Section 138/141 of the NI Act in the Court of Judicial Magistrate, 2nd Court, Suri, Birbhum is quashed in so far as these Appellants are concerned. It is made clear that the proceedings may continue against the other accused in the criminal case, including in particular the Accused Company, its Managing Director/Additional Managing Director and/or the signatory of the cheque in question. .....Sunita Palita =VS= M/S Panchami Stone Quarry, (Criminal), 2025(1) [18 LM (SC) 5] ....View Full Judgment