2018 (2) TMI 2057 - HC - Indian Laws

Dishonor of Cheque - insufficiency of money - sufficient cause for not being convicted or not - cooling off period - Section 138 of Negotiable Instrument Act - HELD THAT - It is clear that the petitioner has now no cause, what to speak of sufficient cause for not being convicted. The Magistrate has rightly convicted him. When the mandate of law and the procedure prescribed has been strictly followed i.e. Chapter XX of Cr.P.C. has been followed, there could be no requirement of following Section 17 of the Evidence Act. The argument advanced is accordingly repelled. The provision of Negotiable Instrument Act has an object of controlling and discouraging the cheque bouncing. Conviction or sentence is only resorted to when the accused fails to pay the borrowed amount. Scheme of the Act is such which provides that when a cheque is bounced, notice of demand shall be issued. Then a cooling off period of one month for filing the complaint has been prescribed, so that the amount is paid. Commission of other crimes is different to the crime covered by the Negotiable Instrument Act. Award of compensation - permissible under Section 138 of N.I. Act or not - HELD THAT - Learned Appellate Court while dealing with the contention has noticed that in view of conferment of special power and the jurisdiction of the Judicial Magistrate 1st Class, the ceiling as to the amount of fine stipulated in the Criminal Procedure Code has been removed and, as such, Magistrate can impose sentence or fine under Section 138 N.I. Act beyond ₹ 5000/, which opinion is based on the judgment rendered by the Hon'ble Apex Court titled R. VIJAYAN VERSUS BABY 2012 (6) TMI 519 - SUPREME COURT where it was held that Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary. The conclusions drawn by learned Additional Sessions, Anantnag, in maintaining the sentence and then modifying the order of fine enhancing it to ₹ 7,00,000/- is perfectly justified and in-keeping with the position of law, therefore, no interference is warranted - petition dismissed.

Summary

Issues Involved:
Conviction under Section 138 of Negotiable Instrument Act, application of Section 17 of Evidence Act, imposition of fine, awarding compensation beyond the specified limit under Section 138 of N.I. Act.

Analysis:

1. The petitioner was convicted under Section 138 of the Negotiable Instrument Act for bouncing two bearer cheques. The conviction was upheld by the Appellate Court. The petitioner admitted to issuing the cheques and failing to pay the amount owed to the respondent. The trial court followed the procedure under Chapter XX of the Cr.P.C., granting opportunities for settlement, which the petitioner failed to avail.

2. The petitioner argued that Section 17 of the Evidence Act was not followed while recording his confessional statement. However, it was clarified that Chapter XX of the Cr.P.C. governs complaints under Section 138 of the N.I. Act. The Magistrate properly explained the particulars of the offence to the petitioner, who admitted to issuing the cheques and owing money to the complainant.

3. The petitioner's claim of non-application of mind in passing the judgment was dismissed as the trial court and the Appellate Court followed the prescribed procedure. The petitioner's admission to the offence and failure to settle the amount led to his conviction.

4. The petitioner contested the imposition of a fine, arguing that the Appellate Court wrongly enhanced the fine amount. However, it was clarified that the Appellate Court acted in accordance with the mandate of Section 138 of the N.I. Act, which allows for a fine up to twice the amount of the cheque bounced.

5. The Appellate Court's decision to award compensation beyond the specified limit under Section 138 of the N.I. Act was justified based on the power conferred to the Magistrate. The court cited relevant case law to support the imposition of compensation linked to the cheque amount, ensuring recovery for the complainant.

6. The judgment emphasized the objective of the Negotiable Instrument Act to deter cheque bouncing and ensure recovery for the complainant. The court upheld the conviction and the modified fine amount, concluding that no interference was warranted in the case.

7. The petition was dismissed, upholding the judgments of the trial court and the Appellate Court. The trial court record was directed to be sent back for further proceedings.

This detailed analysis covers the issues of conviction under Section 138 of the Negotiable Instrument Act, application of relevant legal provisions, imposition of fine, and awarding compensation beyond the specified limit, providing a comprehensive understanding of the judgment.