2018 (6) TMI 934 - HC - Indian Laws

Non-payment of Cheque amount - Dishonor of Cheque - Offence punishable under Section 138 of the Negotiable Instruments Act - Held that - The entire compensation amount, as deposited, before the learned trial Court, be released in favor of the complainant/respondent - appeal disposed off.

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act.
2. Contesting the findings of conviction and sentence by the lower courts.
3. Composition of the offence and subsequent settlement.
4. Application of precedents from higher courts regarding the settlement and compensation.

Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act:
The petitioner was convicted and sentenced by both the trial court and the Sessions Judge for committing an offence under Section 138 of the Negotiable Instruments Act. The complainant, a private limited company dealing in construction materials, sold materials worth ?3,61,838/- to the accused on credit. The accused issued two cheques to discharge this liability, but one cheque for ?50,000/- was dishonored due to insufficient funds. Despite being informed and requested to present the cheque again, it was dishonored a second time. A legal notice was sent, but the accused failed to make the payment, leading to the complaint.

2. Contesting the Findings of Conviction and Sentence by the Lower Courts:
The accused challenged the findings of conviction, arguing that the Sessions Judge's decision was based on a misappreciation of the evidence. The defense claimed innocence and false implication. However, both the trial court and the Sessions Judge found the evidence sufficient to convict the accused under Section 138.

3. Composition of the Offence and Subsequent Settlement:
The petitioner argued that the offence should be considered composed since the complainant had filed a civil suit for the recovery of the cheque amount, which was decreed in favor of the complainant and subsequently executed. The petitioner relied on the Supreme Court's judgment in M/s Meters and Instruments Private Limited vs. Kanchan Mehta, which allows for the composition of the offence even at a later stage if the complainant is duly compensated. The court examined whether the petitioner’s actions post the civil decree indicated a bona fide intention to settle the matter.

4. Application of Precedents from Higher Courts Regarding Settlement and Compensation:
The court referred to the Supreme Court judgments in P. Ram Das vs. State of Kerala and Priyanka Nagpal vs. State (NCT of Delhi), which allowed for modifying the sentence to additional compensation in lieu of imprisonment if the complainant is compensated. In the present case, the petitioner had deposited the compensation amount assessed by the lower courts. Considering the petitioner’s family responsibilities and the full realization of the cheque amount by the complainant, the court deemed it appropriate to substitute the sentence of imprisonment with an additional compensation of ?30,000/-. The petitioner was directed to pay this amount within two months, failing which the sentence of imprisonment would be executed.

Conclusion:
The court upheld the conviction but modified the sentence, substituting the imprisonment with an additional compensation payment. The deposited compensation amount was ordered to be released to the complainant. The appeal was disposed of accordingly, with all pending applications also disposed of and no order as to costs.

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