2021 (1) TMI 1182 - HC - Indian Laws

Dishonor of Cheque - existence of legally recoverable debt or not - mis-use of cheque - section 138 of NI Act - HELD THAT - A mere denial that the cheque is not issued for legally recoverable debt would not be sufficient enough to hold that there was no legally recoverable debt on record. The materials on record has been properly considered by the learned Magistrate which was re-appreciated by the learned Principal District and Sessions Judge in the first appeal. In such circumstances, even after perusing the records and in the light of the arguments advanced on behalf of the Revision Petitioner, this court does not find any patent defect on record nor there is any error of jurisdiction or law which would entitle the accused to seek for interference by this court in this Revision Petition. The sentence passed by the learned Magistrate which is confirmed by the first Appellate Court in so far as the simple imprisonment is concerned is excessive as there is no reason assigned for awarding simple imprisonment. Since there is no fine amount ordered against the State, if Revision Petitioner in ordered to pay fine of ₹ 3,05,000/- for the offence punishable under Section 138 of the Negotiable Instruments Act and ordering sum of ₹ 5,000/- as fine to the State and maintaining the compensation amount payable to the complainant in a sum of ₹ 3,00,000/- would meet the ends of justice. The Revision Petition is allowed in part while maintaining the conviction for the offence punishable under Section 138 of the Negotiable Instruments Act, the Order passed by the learned Magistrate, which is confirmed by the first Appellate Court is hereby set aside.

Summary

Issues:
1. Conviction under Section 138 of the Negotiable Instruments Act and compensation order.
2. Excessive sentence and fine amount.

Analysis:

Issue 1: Conviction under Section 138 of the Negotiable Instruments Act and compensation order:
The accused challenged the order convicting him under Section 138 of the Negotiable Instruments Act and sentencing him to pay compensation of ?3,00,000 to the complainant. The accused had issued a cheque which was dishonored due to insufficient funds, leading to a legal notice and subsequent complaint under Section 138. The Magistrate, after trial, convicted the accused based on evidence presented by the complainant-Bank's officer and another witness. The accused's defense of being a guarantor for a business partner was not accepted as he failed to prove the absence of a legally recoverable debt. The Principal Sessions Judge upheld the conviction. The accused argued that the conviction was erroneous and the sentence excessive, but the court found no jurisdictional defect or error in law, upholding the conviction and compensation order.

Issue 2: Excessive sentence and fine amount:
The Magistrate had sentenced the accused to three months of simple imprisonment and a compensation amount of ?3,00,000 to be paid to the complainant. The court found the imprisonment term excessive as no reasons were provided for it. Therefore, the court modified the sentence, ordering the accused to pay a fine of ?3,05,000, with ?3,00,000 as compensation to the complainant and ?5,000 as fine to the State. The accused was granted time until June 30, 2021, to pay the balance amount, failing which the original sentence of three months' imprisonment would be enforced. This modification was deemed necessary to ensure justice while considering the impact of the COVID-19 pandemic.

In conclusion, the Revision Petition was partially allowed, maintaining the conviction under Section 138 of the Negotiable Instruments Act but modifying the fine amount and granting a deadline for payment to avoid imprisonment.