2019 (2) TMI 1845 - HC - Indian Laws

Dishonor of Cheque - Non-Grant of compensation by the Trial Court - the accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act - HELD THAT - Sending the accused in jail for dishonour of cheque will not serve the purpose of the Act. The Court has to keep in mind the provisions of Section 357 of the Code of Criminal Procedure. As per Section 357 the Court has to award compensation in a suitable case. Once it is proved by the side of complainant that cheque was dishonoured then it was for the trial Court to award compensation to the complainant. Learned trial Court as well as first appellate Court not taken into consideration the provisions of Section 357 of the Code of Criminal Procedure. Accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act. He shall pay compensation of 80, 000/- to the complainants/applicants within a period of 15 days from the date of this order - Petition allowed in part.

Summary

Issues:
Compensation not granted despite conviction under Section 138 of the Negotiable Instruments Act.

Analysis:
The revision raised by the applicants/complainants highlighted the trial court's failure to grant compensation despite the accused being convicted under Section 138 of the Negotiable Instruments Act. The accused had issued a cheque of ?80,000 to the applicants, leading to the conviction by the Learned Judicial Magistrate First Class, Nagpur. The court's discretion in awarding sentence under the Act was emphasized, urging judicious use of this discretion.

Section 138 of the Negotiable Instruments Act was cited, outlining the offense of dishonoring a cheque due to insufficient funds in the account. The provision details the punishment, including imprisonment and fines, for such offenses. The importance of timely presentation of the cheque, notice to the drawer, and failure to make payment within the stipulated period were highlighted in the explanation provided.

Referring to a previous judgment, it was emphasized that merely convicting and imprisoning the accused does not fulfill the objectives of the Act. The need for the money to be returned to the complainant within the specified time was stressed. The court was reminded of the provisions of Section 357 of the Code of Criminal Procedure, which mandates the award of compensation in suitable cases. The trial court's oversight in considering Section 357 led to the modification of the operative part of the order.

In the final order, the revision was partly allowed, maintaining the judgment while modifying the operative part to include the payment of compensation of ?80,000 to the complainants/applicants within 15 days. Failure to comply would result in one month of imprisonment for the accused. The importance of compensating the complainants in cases of dishonored cheques was reinforced, aligning with the principles of justice and the legal framework provided by the relevant statutes.