A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 415, 430 – Conviction in cheque bounce complaint – Appeal -- Suspension of sentence – Condition of deposit of 20% of compensation – Whenever the deposits are expensive than the liberty, and the Appellate Courts are convinced that the convicts are not in a position to deposit and likely to forego their liberty even when the first appeal is yet to be decided -- Appellate Courts must make efforts to prioritize hearing appeals filed against the convictions and decide those preferably within sixty days of filing, and not later than ninety days, which clearly aligns with the legislators’ intentions -- However, the time of sixty days should be extended to the extent to which the decision of the appeal is delayed because of the complainant.

(Para 76)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 415, 430 – Conviction in cheque bounce complaint – Appeal -- Suspension of sentence – Condition of deposit of 20% of compensation – The words, “Whether sufficient ground has been made out by the appellants to persuade the Sessions Court not to order any deposit is left entirely to its discretion and satisfaction.”, used by the Hon’ble Supreme Court in Muskan Enterprises, (2024) Law Today Live Doc. Id. 19767, would include a reduction of the amount below 20%, because if the Appellate Court can exempt the entire 20%, it can also reduce the deposit below 20% depending upon the convict’s financial capacity -- Any other interpretation would imply that even if a convict is willing to pay some amount, e.g., 15%, 10%, or 5%, and the Appellate Court exempts the entire amount, thereby preventing the complainant from collecting whatever the convict can afford to pay.

(Para 22)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 430 – Conviction in cheque bounce complaint – Appeal -- Suspension of sentence – Condition of deposit of 20% of compensation :

First proposition -- “Whether imposition of condition to deposit 20% of the compensation amount awarded by the Trial Court, is sustainable or not, while deciding the application for suspension of sentence in an appeal, when the judgment of conviction and order of sentence is still awaiting confirmation?”

Answer to the first proposition is that the imposition of condition to deposit 20% of the compensation amount awarded by the Trial Court, is sustainable, while deciding the application for suspension of sentence in an appeal, when the judgment of conviction and order of sentence is still awaiting confirmation.

(Para 16-36)

Second proposition -- “Whether the right of the convict-appellant being on bail in pending appeal, can be subjected to the compliance of direction to pay 20% of the compensation amount under Section 148 of the NI Act?

Answer to the second proposition was once addressed by Surinder Singh Deswal supra [Second case] (2020) 2 SCC 514, where the Hon’ble Supreme Court held that when an Appellate Court suspends the sentence on a condition, then the failure to comply with that condition adversely affects the continuation of the suspension.

The Appellate Court that has suspended the sentence on a condition, after observing non-compliance, could reasonably hold that the suspension stood vacated due to the non-compliance, and it is the responsibility of the said Appellate Court, which granted the suspension, to consider the non-compliance and make an appropriate decision. Nonetheless, non-compliance with the suspension condition is enough to declare that the suspension has been vacated.

(Para 37-41)

Third proposition -- “Whether the right of bail can be taken away by the Appellate Court, where final adjudication of the appeal is pending, due to non-compliance of the direction to pay 20% of the compensation amount under Section 148 of the NI Act, for any justifiable or un-justifiable reason, as discussed in the cases of Jamboo Bhandari and Muskan Enterprises ?

Answer to the third proposition is that the right of bail cannot be taken away by the Appellate Court, where final adjudication of the appeal is pending, due to non-compliance with the direction of paying 20% of the compensation amount under Section 148 of the NI Act. Whenever an Appellate Court directs a deposit under Section 148 of the NI Act and imposes conditions on the suspension of sentence, such conditions must be just conditions.

Here it requires to be understood that once the issue regarding deposit of 20% of the compensation or fine amount, payable under Section 148 of NI Act, is decided by the concerned Appellate Court by following the spirit of the observations made in the judgments of Jamboo Bhandari (2023) Law Today Live Doc. Id. 18509 and Muskan Enterprises (2024) Law Today Live Doc. Id. 19767, and condition, if any, is imposed while suspending the sentence, the same would be deemed to be just and fair, and undoubtedly such condition requires its fulfillment at the end of the appellant, who seeks suspension of sentence.

(Para 42-52)

Fourth proposition -- “Whether it is a pre-condition to deposit 20% of the compensation amount awarded by the Trial Court, for getting an appeal decided?

From the judgments of Noor Mohammed (2002) 9 SCC 23: 2022 and Vijay D. Salvi (2007) 5 SCC 741), it is clear that non-deposit of 20% of the compensation or fine amount would not disentitle the accused from availing any of his substantive rights, including the right of appeal. The case of Vijay D. Salvi, (2007) 5 SCC 741, clearly answers the fourth proposition of law. Thus, to get the appeal decided, there cannot be any precondition for depositing the amount ordered under Section 148 of the NI Act by the Appellate Court. The fourth question is answered accordingly.

(Para 53-57)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 430 – Conviction in cheque bounce complaint – Appeal -- Suspension of sentence – Condition of deposit of 20% of compensation – Requirement to deposit 20% or more of the fine amount or compensation is not an absolute rule and is subject to exceptions mentioned in Jamboo Bhandari, (2023) Law Today Live Doc. Id. 18509 and Muskan Enterprises (2024) Law Today Live Doc. Id. 19767, it can be reduced to below the statutory minimum of 20% or even waived in exceptional cases by assigning reasons.

(65-72)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 372, 378(4) – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 413, 419(4) -- Acquittal in cheque bounce complaint – Leave to appeal – Right of appeal -- Scope and ambit of proviso to Section 372 Cr.P.C./413 BNSS are inherently broader and more accommodating when juxtaposed with the comparatively narrower confines of Section 378(4) of Cr.P.C., 1973/ 419(4) of BNSS, 2023 – Matter relegated to Session Judge :

-- The appeal, along with accompanying application(s) remitted to the learned Sessions Judge with a direction to treat the same as having been filed under Section 372 of Cr.P.C., 1973/ Section 413 of BNSS, 2023. The said learned Sessions Judge may entrust the appeal to himself or assign it to another Court of competent jurisdiction for its disposal, as per law.

-- The Registry directed to send, expeditiously, the complete records of the present appeal (including the paper-book) to the said learned Sessions Judge.

(Para 3, 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 372, 378(4) – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 413, 419(4) -- Acquittal in cheque bounce complaint – Leave to appeal – Delay/ Limitation -- Appeal before Session’s Court -- Application u/s 378(4) Cr.P.C. disposed of by directing the learned Sessions Judge to treat the present leave to appeal as an appeal filed u/s 372 of the Cr.P.C. and entrust the same to any appropriate Court to try the same -- The concerned Court shall decide the appeal on merits as per law, as expeditiously as possible -- Concerned Appellate Court need not to adhere to the delay aspect, if any, involved in the case, for the purpose of considering the issue raised in the appeal and its disposal on merit.

(Para 5, 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque bounce complaint – Vicarious liability of Director of company --  Role of Director – Pleadings in complaint – Requirement of -- Administrative role of each director would be within the special knowledge of the company or the director of the firm and it is for them to establish that they were not in charge of the affairs of the company -- There is no obligation on the complainant to plead in the complaint as to matters within the special knowledge of the company or the directors or firm about the specific role attributed to them in the company.

(Para 38)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 83, 84 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint – Proclamation – Attachment of property – Objections to attachment – Decisioning upon – Requirement of – Petitioner claiming to be the owner of the attached property – Magistrate framed an opinion that the objections of the petitioner would be considered only after attachment order is implemented on spot – Held, procedure adopted by learned trial Magistrate is not countenanced by law -- Impugned order set aside -- Learned trial Magistrate directed to proceed ahead and decide the objections filed by the petitioner to the attachment order most expeditiously after hearing the parties, without waiting for the compliance report of the Deputy Commissioner.

(Para 6-8)

B. Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 83, 84 – Proclamation – Attachment of property – Objections to attachment – Decisioning upon – Requirement of – Section 84 of Cr.P.C. does not bar raising of objection prior to the attachment -- Thus, if a third party raises an objection prior to the attachment of the property, the court has to decide the same and if the court comes to the conclusion that the property does not belong to the accused, the court can pass an order, either declining to attach the property or withdraw the attachment order.

(Para 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 -- Appeal against conviction in cheque bounce complaint -- Suspension of sentence – Condition of deposit of 20% of compensation amount – Challenge to -- Ld. Lower Appellate Court suspended the sentence of the petitioner subject to depositing 20% of the compensation amount within 03 months – Held, appellate Court was required to consider whether the case falls in the exception or not -- Imposition of the condition of depositing 20% of the compensation amount set aside – Matter remanded back to the learned Lower Appellate Court with a direction to decide the matter afresh in accordance with law in the light of judgment passed by the Hon'ble Supreme Court in Jamboo Bhandari's case 2013 (12) SCALE 611.

(Para 4-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 397, 401 -- Conviction in cheque bounce complaint – Settled amount paid to bank -- Respondent-Bank shown no objection to compounding of offence -- Object and purpose of enactment is to provide a compensatory mechanism for expeditious recovery of money as opposed to punishing the accused -- Amendment carried out in the year 2002 in the NI Act intended to make the nature of offence u/s 138 of the NI Act as a civil wrong while making it compoundable -- Conviction and order of sentence quashed/ set aside -- Petitioner acquitted.

(Para 3, 5-8)

Indian Penal Code, 1860 (45 of 1860), Section 420 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Conviction in cheque bounce complaints – FIR u/s 420 IPC by accused against complainant party – Quashing of FIR – Finding recorded by the jurisdictional criminal court in 138 NI Act proceedings between the parties would be binding to both the parties in any subsequent proceedings involving the same issue – Respondent cannot maintain a prosecution on the basis of allegations which were precisely his defence in the earlier proceedings wherein he was an accused -- Criminal proceedings deserve to be quashed on this ground alone -- Impugned criminal proceedings instituted against the appellant for offences u/s 420 of the IPC, quashed.

(Para 12, 20-25)

Negotiable Instruments Act, 1881 (26 of 1881), Section 148 – Cheque bounce appeal -- Deposit of 20% of compensation – Mandate of -- Appellate court to determine financial condition directed the applicant/ appellant to submit ITR for the last 5 years -- Court has to consider that condition of deposit of 20% will not be unjust but also, the fact whether the imposing condition would amount to deprivation of the right of the appeal of the appellant -- No illegality in the impugned order.

(Para 8, 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148(1) – Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 -- Conviction in cheque bounce complaint – Expedite decision on appeal – Suspension of sentence -- On joint request of the parties, petitioners exempted from depositing an amount of Rs.43,65,125/- i.e. 20% of the amount of compensation during the pendency of the appeal, before the Appellate Court -- Since the complaint was initially filed on 11.01.2018 and a period of 7 years has lapsed, after the institution of the complaint, the Appellate Court is directed to decide the appeal within a period of 04 months.

(Para 6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148(1) – Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 – Conviction in cheque bounce complaint – Appeal – Suspension of sentence -- Deposit of 20% compensation – Requirement of -- Petitioners/ convicts directed to deposit 20% of the compensation amount awarded by trial Court by the Appellate Court -- No reason given by the Court while issuing directions -- Condition of depositing of 20% of compensation amount awarded by the trial Court imposed for the purpose of suspension of sentence, set aside -- Appellate Court directed to re-consider the same after giving opportunity of hearing to the parties and then to pass appropriate order in accordance with the law laid down in Jamboo Bhandari’s case (SC) 2024(2) L.A.R. 323 = (2023) Law Today Live Doc. Id. 18509 and till then not to take any coercive action against the petitioners.

(Para 7, 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148(1) -- Deposit of 20% compensation – Requirement of -- According to Section 148 NI Act, the requirement to deposit a minimum 20% of the fine or compensation during an appeal is not mandatory, instead, it is discretionary power vested with the appellate Court meaning the said Court can choose to waive the said deposit in certain exceptional circumstances depending on the facts of the case.

(Para 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 225 – Cheque bounce complaint – Enquiry u/s 225 BNSS – Requirement of -- Drill of Section 225 BNSS (erstwhile Section 202 Cr.P.C.) was not followed before issuance of process -- Intention is to ensure that sufficient grounds exist in order to proceed against an accused in a private complaint -- It is pertinent that the concerned Court passes an order indicating substantial compliance of the aforementioned provision, in view of the directions issued in In re: Expeditious Trial of Cases under Section 138 NI Act 1881 2021(2) L.A.R. 366 = (2021) Law Today Live Doc. Id. 16184 -- Matter remanded back to concerned Court to consider the matter afresh in accordance with law, by taking recourse to Section 225 BNSS.

(Para 4-10)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Inherent powers of High court – Change in law -- Second petition – Maintainability of -- Change of law can legitimately be regarded as a vital change in circumstance clothing the high court with the power, competence and jurisdiction to entertain the subsequent petition notwithstanding the fact that the earlier petition was withdrawn without obtaining any leave, subject to the satisfaction recorded by the high court that the order prayed for in the subsequent petition ought to be made, inter alia, either to prevent abuse of the process of any court or to secure the ends of justice.

(Para 19)

B. May – Shall – Interpretation of -- Use of the verbs ‘may’ and ‘shall’ in a statute is not a sure index for determining whether such statute is mandatory or directory in character -- The legislative intent has to be gathered looking into other provisions of the enactment, which can throw light to guide one towards a proper determination -- While the general impression is that ‘may’ and ‘shall’ are intended to have their natural meaning, it is the duty of the court to gather the real intention of the legislature by carefully analysing the entire statute, the section and the phrase/expression under consideration.

(Para 24)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 148 – Appeal – Conviction in Cheque bounce complaint – Suspension of sentence Since the self-same section, read as a whole, reveals that ‘may’ has been used twice and ‘shall’ thrice, it must be presumed that the legislature was well and truly aware of the words used which form the skin of the language -- Reading and understanding the words used by the legislature in the literal sense does not also result in manifest absurdity and hence tinkering with the same ought to be avoided at all costs -- Therefore, read ‘may’ as ‘may’ and ‘shall’ as ‘shall’, wherever they are used in Section 148.

(Para 27)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Insolvency and Bankruptcy Code 2016 (31 of 2016), Section 7, 14 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce complaint – Quashing of – Insolvency proceedings – Effect of -- Cheques were dated 15.01.2020 and 15.03.2020 and the Interim Resolution Professional/ IRP was appointed on 31.10.2019, prior to these dates -- Account was blocked due to the order issued by the NCLT -- As a result of the NCLT’s order, the authority and control of the account holder over the account ceased to exist – Cheques were dishonoured for the reason ‘Drawer Signature to operate account not received’ – Offence occurred post imposition of moratorium -- Petitioners cannot be held vicariously responsible for dishonour of cheque – Summoning order along with consequential proceedings quashed.

(Para 1, 10-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 -- Cheque bounce complaint – Proclaimed person --  Petitioner is keen to join the proceedings -- Petition disposed of and the impugned order set aside subject to payment of Rs.10,000/- as costs to be paid to the complainant – On surrender of the petitioner with cost of Rs.10,000/- within 10 days, the Court concerned directed to admit him to bail subject to its satisfaction and decide the application for revival of the complaint in accordance with law.

(Para 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 256 – Cheque bounce complaint – Dismiss in default -- Complaint was filed on 18.12.2020 and thereafter, the appellant/ complainant was regularly appearing before the Trial Court, however, on 23.08.2024 the appellant could not appear as wrong date was noted by the counsel, complaint was ordered to be dismissed for non-prosecution -- Held, Magistrate has discretion to dismiss the complaint, however, if the Magistrate finds that there was some valid reason for non-appearance of the complainant or the presence of the complainant was not required during the Court proceeding, he can very well exercise his discretion to adjourn the complaint -- While exercising the jurisdiction u/s 256 Cr.P.C., the Court has to take into consideration that the powers vested in it have to be exercised judiciously and in the interest of justice -- Impugned order set aside and the complaint is ordered to be restored to its original number.

(Para 11-14)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 446, 482 – Cheque bounce complaint – Absence of accused -- Forfeiture of bail bond – Presence of accused – Requirement of – Presence of an accused, where proceedings are semi-criminal/ civil in nature, should ordinarily not be insisted upon, if an application is moved for a particular hearing, unless the trial court needs to either examine the under-trial or his statement is to be otherwise recorded for proceeding further in the matter -- Impugned order directing the forfeiture of the bail-bonds of the petitioner accused and initiating proceedings against his surety u/s 446 Cr.P.C. set aside.

(Para 1, 7-10)

Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148A -- Conviction in cheque bounce complaint -- Appeal -- Suspension of sentence – Pre-deposit of 20% of compensation -- Looking at the financial condition of the petitioner, directing her to deposit 20% of the amount as per impugned order shall result in jeopardizing her appeal being dismissed on account of non-compliance of the condition of deposit -- Condition of pre-deposit of 20% of interim compensation set aside, Ld. Sessions Judge ordered to proceed with hearing of the appeal without insisting for pre-deposit and dispose of the same in accordance with law.

(Para 8, 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Conviction in cheque bounce complaint – Compromise quashing of conviction and sentence – Back-out from compromise – Effect of -- As per compromise, the petitioner has already paid Rs.3,00,000/- to the complainant and the complainant pleaded no objection -- Held, resiling from the compromise by the complainant is immaterial and the continuation of the case would be an abuse of the process of the Court -- Petition allowed, complaint alongwith the judgment of conviction and order of sentence quashed on the basis of compromise.

(Para 5-8)

A. Code of Criminal Procedure, 1989 (XXIII of 1989), Section 190, 203 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- Summon of accused -- Dropping of proceedings -- Once the Magistrate takes the cognizance and issues the process against the accused, then the Magistrate cannot put the clock back and drop the proceedings – Revisional Court was not right in returning the finding that the trial court had wrongly dismissed the application for dropping of the proceedings filed by the respondent/ accused.

(Para 12)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint – Account frozen -- Whether the complaint for dishonour of cheque due to the reason ‘account frozen’ is maintainable under section 138 of the Act? -- Complaint u/s 138 of the Act is maintainable even if the cheque is dishonoured due to reason ‘Account frozen’.

(Para 13, 14)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Principal amount – Interest thereupon – Repayment of loan – Ground of -- If the rate of interest of 3% instead of 1.8% per month has been added on the principal amount and the amount in the cheques reflects the same, it cannot be said that the cheques were not for repayment of the principal amount -- When the respondent/ accused does not dispute that he has handed over the cheques or signed on them, it was incumbent upon him, the moment he claims the amount(s) were repaid to the appellant/ complainant to have either taken back the cheques or instructed the bank concerned to not honour the concerned cheques -- Closure of the bank accounts within a few weeks of issuance of the cheque raises serious questions about the conduct and intent of the respondent/ accused – Conviction  by trial court, upheld.

(Para 16)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 7, 138, 141, 143A -- Drawer – Cheque bounce complaint – Interim compensation u/s 143A of NI Act -- Liability of Directors of Company -- Interpretation of -- High Court's interpretation accurately identified the "drawer" as the individual who issues the cheque -- Drawer u/s 143A refers specifically to the issuer of the cheque, not the authorized signatories -- Primary liability rests on the drawer, emphasizing the drawer's responsibility for maintaining sufficient funds -- Section 141 of the NI Act extending liability to the company's officers for the dishonour of a cheque -- Appellants' attempt to extend this principle to Section 143A, to hold directors or other individuals personally liable for interim compensation, is unfounded -- Authorized signatories act on behalf of the company but do not assume the company's legal identity.

(Para 28-30)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 7, 138, 143A -- Drawer – Cheque bounce complaint – Interim compensation u/s 143A of NI Act -- Liability of Directors of Company – Interpretation of -- When statutory language is clear and unambiguous, it should be given its natural and ordinary meaning -- Legislative intent, as discerned from the plain language of the statute, aims to hold the drawer accountable -- Appellants' argument for a broader interpretation to include authorized signatories u/s 143A contradicts this principle and would lead to an unjust extension of liability not supported by the statutory text.

(Para 31)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Indian Penal Code, 1860 (45 of 1860), Section 174A, 420 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint – Withdrawal of complaint -- Quashing of FIR u/s 174A IPC -- Proceedings u/s 138 and 142 of the N.I. Act read with Section 420 IPC have culminated in a settlement with the withdrawal of the aforesaid complaint -- Petition allowed subject to a deposit of Rs.25,000/- as costs -- FIR u/s 174-A IPC and all other subsequent proceedings arising therefrom are quashed.

(Para 12, 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint – Examination of Handwriting expert – Application for -- Holder in due course -- Burdon of proof -- A burden lies heavy on the person issuing the cheque particularly the accused who does not dispute the authenticity of the signatures to furnish a justifiable explanation as to how such cheque came into the hands of the complainant -- Mere fact that body writing on the cheque in question has not been made by the accused would not offer any kind of defence to the accused – Trial court declined application --  No infirmity in the impugned order,  and the same is upheld.

(Para 1, 11, 12)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 311 -- Scope and object of the Section 311 Cr.P.C. – Provision is to enable the Court to determine the truth and to render a just decision after discovering all relevant facts and obtaining proper proof of such facts to arrive at a just decision of the case -- Power is to be exercised judiciously and not arbitrarily -- Such a power is to be exercised, provided that the evidence that is likely to be adduced by the concerned witness is relevant to the issue involved -- Application could not be rejected on the sole ground that the case has been pending since long.

(Para 5)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 311 – Cheque bounce complaint -- Re-examination of complainant/ witness – FIR by complainant for same transaction as well -- Complainant’s cross-examination was completed on 21.11.2019 -- However, challan in criminal case was filed in year 2022 – It is the case of the petitioner that certain new facts having bearing on the present case, surfaced in the said report submitted by the police u/s 173 Cr.P.C and it is necessary to put the said new facts to the complainant in his cross examination -- Application u/s 311 Cr.P.C. allowed subject to cost of Rs.5,000/-.

(Para 3, 6, 7)

Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148A -- Cheque bounce complaint -- Appeal against conviction – Suspension of sentence – Condition to deposit 20% of compensation amount -- Appellate Court was required to consider whether the case falls under exception or not – Impugned order set aside, Ld. Appellate Court directed to pass the order afresh, after granting opportunity to the parties with regard to, whether the petitioner is able to make out a ground that his case falls under exceptional category which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount or whether the petitioner is liable to pay less amount of compensation.

(Para 6-8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 397 – Conviction in cheque bounce complaint – Compromise thereafter – Quashing of conviction/ sentence – Trial court convicted and sentenced the petitioner to undergo simple imprisonment for a period of eight months and pay compensation to the tune of Rs.2,25,000/- to the complainant – Appellate court affirmed the same -- Matter ordered to be compounded and impugned judgments of conviction and sentence quashed and set aside -- Petitioner-accused acquitted subject to deposit of 10% of the Cheque amount with the HPSLSA.

(Para 1, 8, 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Conviction in cheque bounce complaint – Compromise – Acquittal --  Entire amount of compensation agreed to be paid to the respondent-complainant and respondent has no objection in compounding the offence -- No impediment in accepting the prayer for compounding of offence while exercising power u/s 147 of the Act even after recording of conviction by the courts below – Matter compounded, impugned judgments of conviction and sentence quashed and set aside. Damodar S. Prabhu’s case (2010) 5 SCC 663 = (2010) Law Today Live Doc. Id. 15231 relied.

(Para 9-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint – Presumption – Rebuttal of presumption -- Witness very categorically stated that the documents had been executed by the petitioner and identified the signatures of the petitioner on the documents – Petitioner was at liberty to get her signatures compared through some handwriting & finger print expert, however, she did not do so – Held, cheque has been issued by the petitioner in discharge of her legal liability and she has failed to rebut the presumption as exists as per Section 118 read with Section 139 of the N.I. Act – Revision against conviction dismissed.

(Para 1, 16-18)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138, 139 -- Cheque bounce complaint – Acquittal -- Huge amount of Rs.5 lacs was allegedly given to the respondent-accused in cash -- Complainant failed to provide any documentary evidence in support of the advancement of loan, raising doubts about the credibility of the said transaction – Absence of specific dates regarding the loan advancement and issuance of cheque further weakens the case of the complainant -- Concealment of facts by the complainant including his involvement in a case of fraud and also depositing money into unrelated party’s accounts further undermines the credibility of the case brought-forth by the complainant against the respondent-accused – Acquittal order upheld.

(Para 5-8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138, 139 -- Cheque bounce complaint – Presumption for legally enforceable liability -- Huge amount of Rs.5 lacs was allegedly given to the respondent-accused in cash -- In order to draw presumption u/s 118 read with Section 139 of the Act, the burden was heavily upon the complainant to prove his case against the accused.

(Para 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 91 – Cheque bounce complaint – Production of Bank Account statement of complainant from Bank – Locus standi of accused -- Trial Court dismissed the application by observing that power to summon any document on file is vested with the Court or the Officer In-charge of the Police Station and thus, the application moved at the instance of petitioner-accused could not be entertained -- Held, power u/s 91 of CrPC can be exercised either by the Court on its own or even on an application moved by either of the parties to the trial – Impugned order set aside, matter remanded back to trial court to adjudicate afresh.

(Para 3-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143A – Cheque bounce complaint – Interim compensation -- Trial Court passed the impugned order and awarded maximum of the permissible compensation of 20% of the cheque amount by invoking provisions of Section 143-A under the impression that the said provision is mandatory in nature -- Impugned order set aside, direction given to learned trial Court to decide the matter afresh in consonance with the provision of Section 143-A NI Act as is explained and clarified by the Hon’ble Supreme Court in Rakesh Ranjan Srivastava Vs. State of Jharkhand & Anr., 2024(2) RCR(Crl.) 279 =  2024 INSC 205 = (2024) Law Today Live Doc. Id. 19277.

(Para 6, 7)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 311 – Additional evidence -- Section 311 Cr.P.C. confers wide power, the said power is to be exercised only for strong and valid reasons with great caution and circumspection.

(Para 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Evidence Act, 1872 (1 of 1872), Section 65, 65B – Code of Criminal Procedure, 1973 (2 of 1974), Section 311  -- Screen shots of mobile – Secondary evidence -- Copies of the  screen shots being secondary evidence is admissible in evidence subject to requirement of certificate as per provisions of Section 65-B of the Evidence Act -- Electronic documents ordered to be admitted in evidence subject to provisions of Section 65-B of the Evidence Act with liberty to the petitioner to cross-examine the complainant -- Evidentiary value and relevancy of the said electronic documents will be adjudicated by the learned trial Court at the time of final disposal of the case.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 406 – Cheque bounce complaint – Transfer of case -- Agreement executed at Pune, petitioner/accused is resident of Pune -- Cheques which were dishonoured are also issued on Bank at Pune -- In the agreement, the jurisdictional clause provide that the Court where the bank has provided loan facility will have a jurisdiction to entertain dispute between the parties -- Cheque was presented in the respondent’s Branch at Calcutta – Entire cause of action has arisen at Pune and only in order to harass the petitioner the complaints have been filed at Calcutta by manipulating the jurisdiction – Complaint transferred from Calcutta to Pune.

(Para 6-11)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 256 -- Acquittal/ Dismissal of complaint for want of prosecution -- Power of the Magistrate u/s 256 Cr.P.C to acquit an accused should be exercised judicially, based on a definite conclusion that the complainant no longer desires to prosecute the complaint -- Judicious course would be to direct the complainant to appear for the hearing, if it is imperative, and decide whether the drastic step of acquittal is to be passed in case he fails to appear.

(Para 15)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 256, 378(4) -- Cheque bounce complaint – Absence of complainant -- Dismissed for want of  prosecution -- Neither the complainant was present for trial nor any order directing complainant to remain present was passed on the earlier occasion – Ld. Magistrate ought to have adjourned the complaint to a later date directing the complainant to positively remain present on the next date -- Held, learned Magistrate was not justified in straight away dismissing the complaint and ordering acquittal of the accused respondents on mere non-appearance of the complainant -- Impugned order quashed and set aside -- Proceedings restored to its original number.

(Para 18-20)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 389 – Conviction in cheque bounce complaint -- Suspension of sentence – Condition to deposit  20% of compensation -- Petitioner directed to deposit 20% of the compensation amount awarded by trial Court, while passing the said direction, the Appellate Court has not referred to the ratio laid down by Hon’ble Supreme Court in Jamboo Bhandari’s case (2023) Law Today Live Doc. Id. 18509 and no reason given by the said Court – Condition of deposit set aside, Appellate Court directed to decide afresh.

(Para 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 406, 420, 120-B – Constitution of India, Article 142 – Cheque bounce complaint / FIR -- Compounding of offence – No consent of complainant – Quashing of criminal proceedings -- Initially, both sides agreed to compound at the appellate stage but the appellant could not pay the amount within the time – Now appellant has paid the entire amount with interest – Appellant in jail for more than 1 year before being released on bail – Now no purpose to keep the proceedings pending – Transaction between the parties was purely civil in nature which does not attract criminal law -- Even though complainant is unwilling to compound, proceedings must come to an end – While exercising powers under Article 142 of the Constitution, criminal proceedings in FIR and criminal appeals against conviction u/s 138 of the NI Act quashed and sentence awarded by the trial court set aside.

(Para 13-15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bonce case – Quashing of complaint -- Though the prayer for quashing was made only as regards first and second respondents, by the impugned judgment, the complaint has been quashed in its entirety – Held, there was no reason for the High Court to quash the complaint in its entirety -- Impugned order modified.

 (Para 3-5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce complaint – Presumption as to liability – Rebuttal – Standard of proof -- Once execution of the cheque is proved/ admitted, the presumptions u/s 118(a) and 139 of the said Act would arise that it is supported by a consideration -- Such presumptions are rebuttable in nature and the accused can prove the non-existence of a consideration by raising a probable defence, and if the accused is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would dis-entitle him to the grant of relief on the basis of the negotiable instrument -- Standard of proof so as to prove defence on the part of an accused is 'preponderance of probabilities' and inference of preponderance of probabilities can be drawn not only from the materials brought on records by the parties but also by reference to the circumstances upon which he relies.

(Para 6, 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Void cheque – Alteration in cheque -- Amount written in cheque corrected in figures or in number without the knowledge and consent of maker of the cheque amounts to material alteration and also amounts cancellation -- The figure “2" was specifically inserted in cheque specifically without the knowledge of the drawer is a material alteration which makes the documents void -- Accused is not liable for any type of legal recoverable debt -- Nothing is on file to prove any type of transaction or debt to held the accused liable – Acquittal order upheld.

(Para 8-10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint – Receipt issued on the letter pad of the shop of accused is also not proved the liability of the accused in any manner as no witness regarding the receipt is on the letter pad and without any witness the document did not prove any type of liability towards the accused.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Proprietorship Firm not impleaded as party – Neither it is the case of the petitioner/ accused that the amount in question had been advanced as loan to the firm nor the cross-examination of the complainant suggest any such stand of the petitioner -- Firm in question is a sole proprietorship firm of the petitioner/ accused and, as such, it cannot be said that the petitioner would not be responsible for the affairs of the said firm – Guilt of the petitioner/ accused upheld.

(Para 9)

A. “May” – “Shall” – Interpretation -- Word “may” ordinarily does not mean “must” -- Ordinarily, “may” will not be construed as “shall” -- But this is not an inflexible rule -- The use of the word “may” in certain legislations can be construed as “shall”, and the word “shall” can be construed as “may” -- It all depends on the nature of the power conferred by the relevant provision of the statute and the effect of the exercise of the power -- The legislative intent also plays a role in the interpretation of such provisions. Even the context in which the word “may” has been used is also relevant.

(Para 9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A – Cheque bounce complaint – Interim compensation -- Clause (b) of sub-section (1) of Section 143A will apply only when the case is being tried as a warrant case -- In the case of a summary or summons trial, the power under sub-section (1) of Section 143A can be exercised after the plea of the accused is recorded.

(Para 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A – Code of Criminal Procedure, 1973 (2 of 1974), Section 421 -- Cheque bounce complaint – Interim compensation -- Recovery of -- By a legal fiction, the interim compensation is treated as a fine for the purposes of its recovery -- Section 421 of the Cr.PC deals with the recovery of the fine imposed by a criminal court while passing the sentence -- Thus, recourse can be taken to Section 421 of the Cr.PC. for recovery of interim compensation -- Interim compensation amount can be recovered treating it as fine -- Interim compensation amount can be recovered by the Trial Court by issuing a warrant for attachment and sale of the movable property of the accused -- If acquitted, he may get back the money along with the interest as provided in sub-section (4) of Section 143A from the complainant.

(Para 11, 12)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A(5) – Cheque bounce complaint – Non-payment of interim compensation – Right to defend -- Non-payment of interim compensation by the accused does not take away his right to defend the prosecution.

(Para 12)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A – Cheque bounce complaint – Interim compensation -- Power of Trial Court – It can be exercised even before the accused is held guilty -- Sub-section (1) of Section 143A provides for passing a drastic order for payment of interim compensation against the accused in a complaint u/s 138, even before any adjudication is made on the guilt of the accused.

(Para 14)

F. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A – Cheque bounce complaint – Interim compensation -- Word “may” used in Section 143A, cannot be construed or interpreted as “shall”. Therefore, the power under sub-section (1) of Section 143A is discretionary.

(Para 14)

G. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A, 148 – Cheque bounce complaint – Interim compensation -- Tests applicable for the exercise of jurisdiction under sub-section (1) of Section 148 can never apply to the exercise of jurisdiction under sub-section (1) of Section 143A of the N.I. Act.

(Para 15)

H. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A, 148 – Cheque bounce complaint – Interim compensation – Financial distress -- Factors to be considered while exercising discretion -- When the court deals with an application u/s 143A of the N.I. Act, the Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application under sub-section (1) of Section 143A -- Presumption u/s 139 of the N.I. Act, by itself, is no ground to direct the payment of interim compensation -- At this stage, the fact that the accused is in financial distress can also be a consideration –  Court will have to apply its mind to the quantum of interim compensation to be granted – Court will have to consider various factors such as the nature of the transaction, the relationship, if any, between the accused and the complainant and the paying capacity of the accused -- If the defence of the accused is found to be prima facie a plausible defence, the Court may exercise discretion in refusing to grant interim compensation -- Factors set out are not exhaustive -- There could be several other factors, such as, the pendency of a civil suit, etc. -- While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all the relevant factors.

(Para 16)

I. Negotiable Instruments Act, 1881 (26 of 1881), Section 143A, 148 – Cheque bounce complaint – Interim compensation – Law summarised:

a. The exercise of power under sub-section (1) of Section 143A is discretionary. The provision is directory and not mandatory. The word “may” used in the provision cannot be construed as “shall.”

b. While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all relevant factors.

c. The broad parameters for exercising the discretion under Section 143A are as follows:

i. The Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application. The financial distress of the accused can also be a consideration.

ii. A direction to pay interim compensation can be issued, only if the complainant makes out a prima facie case.

iii. If the defence of the accused is found to be prima facie plausible, the Court may exercise discretion in refusing to grant interim compensation.

iv. If the Court concludes that a case is made out to grant interim compensation, it will also have to apply its mind to the quantum of interim compensation to be granted. While doing so, the Court will have to consider several factors such as the nature of the transaction, the relationship, if any, between the accused and the complainant, etc.

v. There could be several other relevant factors in the peculiar facts of a given case, which cannot be exhaustively stated. The parameters stated above are not exhaustive.

(Para 19)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Punjab Registration of Money Lenders Act, 1938 (3 of 1938), Section 3 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378 (4) -- Cheque bounce complaint – Acquittal – Money Lender’s license – Respondent/ accused is under no legally enforceable debt as the complainant-company has been advancing loans illegally -- It is imperative to possess a money lending licence as per the Money Lender’s Act -- Section 3 of the said Act provides that the suit or application for recovery of the loan shall be dismissed if the person claiming recovery does not hold a valid licence under the Act -- Thus, the debt becomes an unenforceable debt – Acquittal order upheld.

(Para 3-7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 406 -- Transfer of cheque bounce complaint -- Several complaint cases u/s 138 of the N.I. Act are pending in the Court at Gurugram, Haryana and it is a solitary case which was instituted in the Court at Dwarka – Parties to the proceedings are residents of Gurugram and the witnesses are also hailing from Gurugram – Complaint transferred from Dwarka Court, New Delhi to the Court of the Gurugram, Haryana.

(Para 3-6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Handwriting expert -- Defence set up by the petitioner/ accused is that the cheque in question had been issued not for the purpose of returning any loan, but for the purpose of making a donation to a Saint -- Mere fact that the body writing on the cheque in question is not of the accused or of the complainant and is in the hand of some 3rd person, would not have any bearing either on the case of the complainant or on the defence plea being set up by the accused – Application for examining Handwriting expert dismissed.

(Para 1, 5, 6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Handwriting expert -- Accused would be required to prima facie show that the witness sought to be examined does have a relevance with the defence plea sought to be substantiated by the accused or has a potential to demolish the case of the complainant.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint – Quashing of complaint – Basic ingredients – Requirement of -- Submission that complaint does not contain date of presentation of cheque before the bank, the date of return of the cheque as unpaid from the bank, the date of issuing mandatory notice within 30 days and the date of service of such notice on the drawee – Held, complaint cannot proceed u/s 138 of the N.I. Act without the basic ingredients being mentioned therein – Proceedings of Complaint case quashed.

(Para 2, 5, 6)

Indian Penal Code, 1860 (45 of 1860), Section 420, 467, 406, 468 – Code of Criminal Procedure, 1973 (2 of 1974), Section 438 -- Anticipatory bail – Cheating -- Petitioner already facing prosecution u/s 138 of the NI Act -- Submitted that mere dishonour of cheque does not amount to cheating – Appeal allowed, in case of arrest petitioner be released on bail by the arresting/ investigating officer/ trial court.

(Para 1-4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Code of Criminal Procedure, 1973 (2 of 1974), Section 389 -- Cheque bounce case -- Appeal against conviction -- Suspension of sentence – Pre-condition of deposit of 20% of compensation amount -- Appellate Court required to consider whether the case falls in the exception or not -- Appellate Court directed to re-examine the case.

(Para 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 82 – Indian Penal Code, 1860 (45 of 1860), Section 174A – Settlement in cheque bounce complaint – Proclaimed person -- Quashing of FIR u/s 174A IPC -- Proceedings under the N.I. Act culminated in a settlement with the withdrawal of the complaint – F.I.R. u/s 174-A of IPC along with all subsequent proceedings quashed.

(Para 11-13)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce complaint -- Legally enforceable liability -- Loan -- Money lending licence – Requirement of -- Complainant was involved in money-lending business without possessing any valid license -- Respondent/ accused used to borrow money from him -- Claim of the applicant/ complainant against the respondent is an unenforceable claim and thus, cannot be considered a legally enforceable liability u/s 138 of the NI Act.

(Para 4)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce complaint -- Acquittal by Trial court – Leave to appeal -- Power of the Appellate Court to unsettle the order of acquittal on the basis of re-appreciation of the evidence is subject to the settled law that where two views are possible and out of the two, one points towards the innocence of the accused, the view which favours the accused should prevail over the other pointing towards his guilt.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200, 406 -- Transfer of cheque bounce complaint -- Proprietor of the Complainant Company is working at Mumbai -- Yet the cheque was presented before the Bank at Darbhanga which led to the proceeding u/s 138 of the Act initiated before the Chief Judicial Magistrate, Darbhanga, Bihar -- Just because the respondent/ complainant who is a permanent resident of Darbhanga or has business interest in Bihar, may not justify filing of a case in another Court when all the transactions were in Mumbai -- Project site is at Maharashtra -- Complaint transferred to Mumbai.

(Para 4-8)