A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138, 139 – Cheque bounce case – Presumption as to issuance of cheque in discharge of debt or other liability -- Admission of issuance of cheque and signature -- Presumption envisaged u/s 118 read with Section 139 of NI Act would operate in favour of the complainant – Presumption is one of law and there under the court shall presume that the instrument was endorsed for consideration -- In absence of contrary evidence on behalf of the petitioner/ accused, the presumption under section 118 and 139 of the NI Act, goes in favour of the complainant.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Presumption as to issuance of cheque in discharge of debt or other liability -- Wrong cheque number in legal notice/ complaint – Effect of -- Original cheque was placed before the trial court and the same was exhibited -- Cheque as well as the signature has been accepted by the petitioner -- Thus, the presumption u/s 139 would operate and the wrong number of the cheque in the complaint and/or in the legal notice would not make any difference and has to be taken as typographical error.

(Para 11, 12)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 401 – Conviction in cheque bounce case – Long pendency of case – Sentence of compensation -- Ld. Appellate Court has sustained the compensation amount of Rs.9 lakhs and sentenced of S.I. for a period of 1 year -- Having regard to the facts of the case and looking to the continuity of litigation, since the case is of the year 2009 and 13 years have elapsed; interest of justice would be sufficed if the sentence part is modified in lieu of compensation itself -- Sentence of one year modified to an amount of Rs.1 lakh over and above 9 lakhs compensation – Petitioner directed to pay the amount within a period of 10 weeks’, failing which the trial court shall proceed in accordance with law.

(Para 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Constitution of India, Article 136 -- Conviction u/s 138 of NI Act --  Upheld by Supreme Court – Compromise/ Settlement between parties – Recalling of order -- In view of the statement made and as full payment has been made along with compensation, order recalled and the special leave petition restored to its original number – Leave granted, impugned order upholding the conviction of the appellant would be treated as settled and compounded -- Appeal allowed.

(Para 2-7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 190 -- Cheque bounce case -- Amendment in complaint – Wrong mentioning the name of Bank in complaint as Punjab National Bank instead of HDFC Bank – Held, mistake is a simple infirmity which is curable by means of formal amendment, and by allowing such amendment, no prejudice would be caused to the applicant as there is no dispute about the issuance of cheque of HDFC bank by the petitioner/accused and same was annexed at the time of filing of complaint – Infirmity can be cured through amendment at any stage before pronouncement of the judgment.

(Para 10-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Constitution of India, Article 136 – Cheque bounce case – Security deposit cheque – Quashing of Complaint u/s 138 of NI Act – High Court quashed the complaint -- Dispute between the parties regarding the quality of the material supplied – Respondent/ accused made a complaint in writing of the defective material and then stopped the payment – Respondent has already filed a Civil Suit for damages – Held, the issues between the parties can be effectively resolved through Civil Suit only – Petitioner shall be at liberty either to file counter claim or a separate suit in accordance with law – Observations made by the High Court in its impugned order shall have no bearing on the outcome of the Civil Suit.

(Para 1-7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Conviction in cheque bounce case – Revision -- Allegation of forgery against complainant -- Had that been the case, the accused would have certainly filed a criminal complaint in that regard -- No effort has been made to examine any expert either -- Further, there is no denial by the petitioner to the signatures upon the cheque -- Except bald assertion, the accused has not been able to raise a probable defence even while referring to the cross-examination of the complainant and his witnesses – No infirmity in the judgment of conviction passed by the Trial Court affirmed by the ld. Appellate Court – No merit, revision dismissed.

(Para 16)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Conviction in cheque bounce case -- Revision -- Reduction of sentence -- Cheque amounting Rs.4,58,000/- -- Sentenced to R.I. for one year, fine of Rs.5,000/- and in case default sentence of one month -- Conduct of the petitioner is extremely disturbing, firstly, did not appear at the time the Appeal was pending before the ASJ and was declared a proclaimed offender and was released on interim bail -- Petitioner continued as such for a period of approximately three years -- When the matter came up for hearing before High Court, an assurance was given that he would surrender and file a revision petition, however the petitioner was untraceable -- No mitigating circumstances for reducing his sentence.

(Para 8, 17, 18)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Opportunity to cross-examine witness -- Petitioner adopting delaying tactics and wants to prolong the adjudication -- Be that as it may, in the interest of justice, one and last opportunity grated to the petitioner to cross examine subject to payment of cost of Rs.1 lakh to be paid to complainant.

(Para 6-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cheque bounce case -- Non-appearance of accused after grant of bail – Cancellation of bail – Rule of natural justice -- Address mentioned in the Court notice, being an incorrect description thereof, petitioner/accused did not come to be validly served on his correct address, hence the learned trial Magistrate concerned, could not conclude that any valid service, became caused upon him, nor could he conclude, that there was any willful, and, deliberate omission on the part of the petitioner, to cause his personal appearance -- Contrarily, it became incumbent upon the learned Magistrate, to after discovering the correct address, cause there his valid service however,  did not recourse, the above measure -- Impugned order quashed, and, set aside -- Petitioner directed to cause his personal appearance before the learned Magistrate.

(Para 2, 5, 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Compromise post-conviction -- Nature of dispute is predominantly private -- Statement made in the joint petition preferred by the informant and the accused as well as the affidavit filed discloses that the compromised has been entered into voluntarily -- Nature of the offences is also not heinous – Conviction and sentence set aside and quashed.

(Para 7-9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Constitution of India, Article 136 -- Cheque bounce case – Compromise after conviction -- Compounding of offence -- In conformity with the settlement requisite payment accepted -- It does appear appropriate to accept the terms of settlement between the parties and allow the compounding of offence – Orders passed by the Appellate Court and the Trial Court are set aside.

(Para 7, 8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 148 – Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 397, 401, 482 -- Deposit of 20% compensation – Interlocutory order – Maintainability of revision – Inherent power u/s 482 Cr.P.C -- Order passed in exercise of power u/s 148 of the NI Act, is neither a final order nor an intermediate order -- Such powers are in the interlocutory in nature and Revision is not maintainable -- Petitioner would be at liberty to approach High Court in exercise of inherent power u/s 482 of the Code of Criminal Procedure.

(Para 15-18)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 -- Cheque bounce complaint – Quashing of proceedings -- Partial payment of cheque amount – Effect of -- Cheque when presented for realization was returned for technical reason -- On the very same date, the accused transferred a sum of Rs.10,00,000/- to the account of the complainant through RTGS – No material placed that the cheque was re-presented towards recovery of balance amount – Ld. Magistrate has committed an error in taking cognizance of the offence punishable u/s 138 of the Negotiable Instruments Act – Petition allowed, impugned proceedings quashed.

(Para 6, 7)

Code of Criminal Procedure, 1973 (2 of 1974), Section 401 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Cheque bounce case – 20% pre-deposit of compensation – Extension of time-- Addl. Session Judge directed the petitioner to deposit 20% amount of compensation by 04.06.2022 vide order dated 26.04.2022 – High Court extended time upto 30.06.2022 by taking sympathetic consideration.

(Para 3-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case -- Proclaimed person – Quashing of FIR u/s 174-A of IPC -- Complaint u/s 138 of N.I. Act withdrawn by complainant as compromised – Case of the petitioner that he was not aware of the proceedings u/s 138 of the Act of 1881 and was subsequently arrested and released on bail -- Order declaring the petitioner as proclaimed person would prove to be insignificant inasmuch as the main complaint u/s 138 of the Act itself has been withdrawn -- Petition allowed -- FIR u/s 174-A of the IPC and all the subsequent proceedings arising therefrom quashed/set aside.

(Para 9-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Summary trial – Conviction in cheque bounce complaint -- Ld. trial court recorded the statement of the complainant and convicted the petitioner and imposed one year’s sentence and fine of Rs.14 lakhs – Additional evidence application for calling witness pending before appellate Court – Held, decision arrived at by the learned trial court held to be justified -- Trial u/s 138 of NI Act has to be a summary trial and if sufficient evidence  to convict and the preponderance of probability is met, then there is no reason for creating an elaborate trial -- No interference in the revision called for, dismissed.

(Para 3, 8, 9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 273, 299 – Cheque bounce complaint -- Absence of accused – Recording of evidence -- If the personal attendance of the accused is dispensed with, evidence may be recorded in the presence of the pleader of the accused -- Except u/s 299, evidence cannot be recorded for any other reason in the absence of the accused.

(Para 11)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 273, 299 – Absence of accused – Ex-parte proceedings -- There is no provision in Cr.P.c. for keeping an accused ex parte similar to one found in CPC -- Held, trial cannot be held in the absence of an accused unless personal appearance is dispensed with for valid reasons.

(Para 12, 15)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 313 – Absence of accused – Statement u/s 313 Cr.P.C. – Dispense with – Permissibility of -- There cannot be dispensation of examination of an accused u/s 313 Cr.P.C if incriminating evidence appears in the evidence of the witness -- Speedy trial does not take the meaning of jumping the stages in criminal trial.

(Para 16)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Signatures on cheque not disputed – Effect of -- Undisputed signatures of the respondent/accused on the cheque in itself is not sufficient for conviction u/s 138 of the Act -- One of the ingredient for succeeding u/s 138 of the Act is that the cheque was issued for discharge of debt or other liability.

(Para 10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143A -- Bihar and Orissa Public Demands Recovery Act, 1914 (4 of 1914), Schedule I, Clause 3 – Code of Criminal Procedure, 1973 (2 of 1974), Section 421 -- Cheque bounce complaint -- Interim compensation – Recovery as public demand -- Whether an order for payment of interim compensation under the Negotiable Instrument Act can be enforceable under the Bihar & Orissa Public Demands Recovery Act, 1914 as a public demand? -- Interim compensation so ordered u/s 143A of the NI Act is recoverable as a fine u/s 421 of Cr.P.C. which then, clearly falls under the definition of ‘public demand’ – Held, interim compensation ordered under the NI Act falls within the ambit of Schedule I of the Recovery Act, realization thereunder cannot be stopped.

(Para 17-20)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 438 -- Cheque bounce case -- Non-bailable warrants – Bailable case – Need of anticipatory bail – Held, petitioner has been summoned for an offence u/s 138 of the N.I. Act which is a bailable offence -- Hence, there is no occasion for apprehension of arrest and detention in a bailable offence provided the petitioner is ready and willing to comply with the conditions set forth by the concerned Illaqa Magistrate for granting him the concession of bail – Petition withdrawn with liberty to move an application/petition for bail before the concerned Illaqa Magistrate.

(Para 2)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 389, 421, 446 – Conviction in 4 cheque bounce cases – Suspension of sentence in appeals – Brother/Appellant stood surety for Rs. 1 lac – Convict/Appellant in appeals absented and bail bond/ surety bond forfeited – Appellate court directed the surety/appellant to deposit Rs. 1 lac each in four cases – Recovery warrants issued – Convict/ Appellant has already appeared before the lower Appellate Court -- Absence of convict/ appellant was beyond the control of the Surety/appellant – Penalty reduced to Rs.10,000/-.

(Para 11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143(A) – Cheque bounce case – Interim compensation – Opportunity of hearing –Trial Court granted interim compensation u/s 143(A) just in a routine manner and there is no application of mind as to why the said compensation has to be awarded – No opportunity was given to the petitioner to file his response, before passing of the impugned order – Trial Court misread Section 143(A) and treated the said provision as mandatory in nature, whereas the legal position is otherwise – Matter remanded back to learned Trial Court to dispose of the matter regarding grant of interim compensation to the complainant in accordance with law.

(Para 7-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Code of Criminal Procedure, 1973 (2 of 1974), Section 374 -- Conviction in cheque bounce complaint – Appeal -- Compensation of 20% or less -- Discretion of Court -- Minimum sum of 20% is a statutory mandate, no discretion is left with the Court to order to deposit less than 20% of the compensation amount -- Appellate Court has rightly ordered to deposit 20% of the compensation amount.

(Para 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Probation of Offenders Act, 1958 (20 of 1958), Section 4 – Code of Criminal Procedure, 1973 (2 of 1974), Section 374 -- Probation – Conviction in cheque bounce complaint -- Matter pertains to an incident that occurred in the year 2000 and the present appeal has been pending since 2012 – No material on record that the accused-petitioner has any criminal antecedents – Held, the accused-petitioner are entitled to the benefit under the Probation of Offenders Act, 1958 -- Petitioner ordered to be released on probation, u/s 4 of the Act.

(Para 12-14)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 389 -- Conviction in cheque bounce case – Suspension of sentence in appeal with pre-condition to deposit 20% of compensation – Held, pre-condition as imposed by the Additional Sessions judge, cannot be found fault with, being legal and in consonance with the provisions of Section 148 of the N.I. Act, 1881.

(Para 1, 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 401, 482  -- Cheque bounce case – Compromise after conviction – Compounding of offence -- Exemption from 15% of Cheque amount -- Petitioner is stated to be a poor farmer, who had taken the said loan for treatment of his son, who was suffering from cancer and stated to be 67 years of age – Petitioner exempted from paying 15% of the cheque amount -- Application u/s 320 Cr.P.C. read with Section 482 of Cr.P.C. for compounding of offence allowed -- Judgment and order of sentence set aside.

(Para 17-19)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Compromise after conviction – Compounding of offence -- Cheque amount paid -- No one appeared to oppose the application on behalf of the private respondent, in spite of service of notice -- Since amount of both the dishonoured cheques (each of Rs.1,00,000/-) has been paid and the disputes have been compromised, the offence may be compounded -- Sentence of imprisonment of the petitioner set aside.

(Para 1, 2)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cheque bounce case -- Quashing of non-bailable warrants – Petitioner ready to surrender and apply for regular bail -- Further submitted that since the petitioner is resident of Delhi, he has no local surety and he can furnish security bonds as per valuation certificate regarding his residential house, therefore, the trial Court may be directed to accept the bail/security bonds in this regard – Considering the limited prayer direction given that in case the petitioner appears before the trial Court within a period of 15 days, the trial Court will not insist upon furnishing a local surety and will accept any other surety/security bonds, on the basis of property offered by the petitioner.

(Para 1-4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143A – Cheque bounce case -- Death of accused – Interim compensation – Final compensation – Recovery from Estate – Permissibility of -- In case of death of an accused the compensation awarded u/s 138 of the Negotiable Instruments Act, 1881 can be recovered from the estate of a deceased accused, but an interim compensation awarded u/s 143A of the said Act cannot be recovered from the estate of a deceased accused, who died before the conclusion of the trial.

(Para 38)

Indian Penal Code, 1860 (45 of 1860), Section 174-A – Negotiable Instruments Act, 1881 (26 of 1881) , Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Proclaimed person – FIR u/s 174-A IPC – Compromise in cheque bounce case – Complaint u/s 138 NI Act withdrawn --  Held, since the main complaint stands withdrawn the matter being compromised between the parties, therefore, continuation of the proceedings under Section 174-A IPC would be nothing but an abuse of the process of law – FIR and all other subsequent proceedings arising thereof quashed qua the petitioner subject to payment of cost of Rs.7000/- to the Legal Services Authority.

(Para 5-7)

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 174-A -- Cheque bounce case – Proclaimed person -- FIR u/s 174-A IPC – Compromise in complaint u/s 138 NI Act case – Complaint was dismissed as withdrawn – FIR u/s 174-A of IPC and all consequential proceedings arising therefrom quashed.

(Para 2-6)

Negotiable Instruments Act, 1881 (26 of 1881) Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 357(3), 389 – Conviction in cheque bounce case -- Suspension of sentence in appeal – Pre-condition to deposit 20% of compensation -- Petitioner was directed to deposit 20% of the compensation amount, as a pre-condition for his suspension of sentence during the pendency of the appeal – Petition seeking quashing/setting aside of the order dismissed.

(Para 1-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Conviction in cheque bounce case – Compromise at revisional stage – Waiver of cost of 15% of cheque amount -- Petitioner has a poor financial condition is apparent from the fact that the complainant has agreed to finally settle the matter for an amount of Rs.2,50,000/-, although, the cheque was for an amount of Rs.5,00,000/- -- Petitioner is a 51 year old lady who is stated to be having no source of livelihood and with great difficulty, she has repaid the amount of Rs.2,50,000/- to the complainant -- Keeping in view the said special facts and circumstances, this Court deemed it appropriate that no costs should be imposed upon the petitioner -- Revision allowed and judgments of Lower Courts set aside and the petitioner acquitted.

(Para 18-21)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 251, 254, 482 -- Cheque bounce complaint – Discharge application – Dismissal of -- Particulars of offence were stated to the accused/petitioners u/s 251 of CrPC, which was denied by him and it was stated that he had given the blank cheque to the respondent firm, which has been misused -- Complaint case u/s 138 of the NI Act is a summons trial case and the ld. Trial Court has rightly held that prima facie application cannot be decided without going into merits of the case in absence of any evidence -- This finding cannot be interfered with by High Court.

(Para 6-8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce complaint – Pre-mature complaint -- Leave to appeal -- Trial Court found the complaint pre-mature -- Cheque dishonored and returned with the remark ”Account Closed” -- Notice sent to the accused, who refused to accept notice – Complaint filed on 13^th day of refusal – Complainant-appellant registered the complaint before the statutory period of 15 days -- Leave to appeal dismissed.

(Para 4-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Cheque bounce complaint – Legally enforceable debt – Friendly loan of Rs. 3 lacs -- Basic ingredients which are required for transaction is not disputed -- There was good acquaintance between the petitioner and the accused prior to the transaction took place – No dispute relating to the issuing of demand notice by the petitioner to the accused – Accused/ Respondent No.1 convicted, sentenced to pay fine of Rs.3,00,000/-, in default simple imprisonment for one year.

(Para 2, 29, 30)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint for dishonour of cheque -- Stop payment – Account closed -- Not only the cases of dishonour of cheques on account of insufficiency of funds or on account of exceeding of arrangement but the cases involving dishonour of cheques on account of “stop payment” and “account closed” have also been brought within the ambit of offence under the aforesaid provision.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint for dishonour of cheque -- Difference in signature -- Contention of the petitioner that in the case offence under Section 138 of the NI Act is not constituted because the cheque was dishonoured on account of difference in signatures and not for the reason of insufficiency of funds or exceeding the arrangement, deserves to be rejected.

(Para 15)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint for dishonour of cheque -- Security cheque -- Even if cheque issued as a security, still then it cannot be stated that no offence is made out, once the cheque issued by him has been dishonoured by the banker.

(Para 19)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Complaint for dishonour of cheque -- Security cheque -- Whether the petitioner had issued the cheque as a security and whether at the time when the cheque was presented for its payment, it was not for discharge of any debt or any other liability cannot be determined either by the trial Magistrate at the time of taking of cognizance or by High Court in these proceedings -- These are defences available to the accused/ petitioner, veracity whereof can be determined during the trial of the case -- Trial Magistrate directed to proceed further in the matter in accordance with law.

(Para 20, 21)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378, 389 -- Cheque bounce case -- Conviction in -- Appeal against -- Suspension of sentence -- Non-deposit of 20% compensation within 60 days -- Submits that the petitioner had already deposited an amount equivalent to 20% of the cheque amount as interim compensation during the proceedings of trial and that the petitioner presently is facing a financial crunch and is unable to deposit another 20% though he has a good case on merits -- Lower Appellate Court directed to take necessary steps to hear the appeal and dispose off the same in the given time – If the petitioner or his counsel is not present on the dates fixed, it shall be open to the Lower Appellate Court to nominate any counsel from Free Legal Aid.

(Para 1-3)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 142 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Quashing of complaint -- Cheque by Company – Vicarious liability -- Resignation by Directors before issuance of cheque – Plea that resignation not accepted by the Company – Resignation were tendered before issuance of the cheques and petitioners have sent resignation in the Form No. DIR 11 & 12 to the Registrar of the Company and the same are available in the website -- Only a bald averment is made in the complaint against the petitioners that they were responsible for day to day affairs of the company -- There is no specific averment against them to show, as to how and in what manner the petitioners are responsible for the conduct of the business of the Company – Moreover, they were not the Managing Director of the Company – Petition allowed, complaint qua the petitioners quashed.

(Para 4, 8-17)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 190 -- Dishonour of cheques – Complainant has right to file and maintain separate complaint for dishonour of each and every cheque.

(Para 17)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 218, 219, 220, 482 -- Dishonour of cheques – Separate notices on dishonour -- Charge together -- At no stretch of imagination it can be termed to be a single transaction attracting the provision of Section 220 of Cr.P.C. -- Liability of accused in both cases is different in nature as in one case cheques are stated to have been issued to discharge the debt of financial assistance provided by an individual, whereas, in another case cheques are stated to have been issued for discharging the liability towards the purchase of goods from sole proprietorship concern – Application u/s 219, 220 of Cr.P.C. dismissed by Trial court, upheld.

(Para 1, 8-19)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 406 -- Supreme Court Rules, 2013, Order XXXIX – Transfer of complaint u/s 138 of NI Act – Karnataka to Telangana – Matter pending before the Court at Hubli, Dharwad District, Karnataka transferred to Kukatpally, Hyderabad, Telangana State where the petitioners are residing.

(Para 2-3)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 – Cheque bounce case -- Conviction u/s 138 NI Act – One year RI and Rs.60 lacs as compensation – Appeal against – Suspension of sentence with pre-condition of deposit of 20% of cheque amount given as compensation – Sustainability of – Direction(s) appears to be oppressive, especially given that a sum of Rs. 60 lakhs became assessed -- Necessarily, also it negates the efficacy of the impugned order, besides fetters the liberty of the petitioner – Held, Appellate Court was enjoined to ensure his bringing inter se proportionality inter se the compensation, and/ or the cheque amount, and, to thereafter, impose a tenable, and, just condition for the orders, suspending the execution of sentence of imprisonment, as imposed upon the convict(s)-appellant(s), by the learned trial Judge concerned, rather taking the fullest effect, through his hence directing them to deposit a reasonable, and, just sum, before the learned trial Judge concerned – Petition accepted, Court proceeded to modify the impugned order, through a direction to deposit 10% amount of the disputed cheque amount, before the learned trial Court concerned.

(Para 6-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Cheque bounce complaint – Presumption – Rebuttal of presumption  -- Signature mismatch – Cheque lost Complaint – Stop payment – Effect of -- Cheque is dated 12.06.2017 -- Cheque books were lost in 2016, GD entry and the acknowledgment of the concerned police station cannot be ignored –Request for stopping of cheques way back in 2016 made to Bank -- Subject cheque which has been dishonoured is the leaf from the cheque book which is lost way back in 2016 -- Complainant failed to place any document to establish the transaction between the complainant and the accused – In the absence of the same, it throws a doubt that whether the cheque which is the subject matter of the dispute is legally enforceable or not -- Judgment & order passed by the trial court punishing the accused and order of the lower appellate court confirming the order of the trial court set aside.

(Para 2, 3, 9-14)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 446A -- Cheque bounce case -- Non-appearance of accused – Cancellation of bail bond – Non-bailable warrant issued -- Order does not disclose that the complainants evidence was present or not -- Consequently, the ld. Judicial Magistrate, could not draw any valid conclusion whether merely for non-appearance of the accused, and, of his counsel both were intending to delay the proceedings – Yet a reading of the order also makes a disclosure that the notice for ensuring the personal appearance of the accused before the ld. Judicial Magistrate, rather was issued -- No echoing in the order that the above notice was ever validly served or not upon accused – Therefore, the impugned order is ridden with the vice of breaching the principles of natural justice and also for its untenably interfering with the personal liberty of the petitioner -- Petition allowed, impugned order set aside.

(Para 3-5)

Code of Criminal Procedure, 1973 (2 of 1974), Section 82 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Proclamation Person – Accused was at abroad -- Averred that at the relevant time, of the serving constable proceeding to execute the proclamation notice, the petitioner was outside India -- Without believing the afore averment, supported by an affidavit, rather the impugned order yet depended upon the infirm report of the serving constable, and, hence becomes ridden with a vice of infirmity, as it was incumbent, upon the learned Magistrate concerned, to ensure, that prior thereto, his eliciting a report of the serving officer, whether the petitioner was residing at his abode, as mentioned against his name, in the memo of parties -- Service of the proclamation notice never became validly caused upon the petitioner – Impugned order quashed and set aside.

(Para 3-5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 389 -- Cheque bounce case -- Conviction u/s 138 NI Act – Suspension of sentence on furnishing of personal and surety bonds in the sum of Rs. 1 Lakh – Later on an application by complainant, Appellate Court proceeded to direct the appellant, to pay an amount of Rs. 2,30,000/- comprising 20% of the compensation amount to the complainant within one month – Order made by Appellate Court is a discreet, and, tacit attempt, to proceed to impermissibly review, and scuttle the effect of the binding order -- It is ridden with a vice of infirmity, if so, and, even if assuming the order did hold some aura or tinge of validity, yet until and unless there was some evidently deterrent circumstances, prevailing upon the learned Appellate Court, as comprised in the appellant rather deliberately delaying the making of an expeditious decision, upon the appeal, there was no occasion for the learned Appellate Court to make the order -- De hors finality being assignable to P-3/order suspending sentence, High Court directed the convict / petitioner to deposit 15% of the cheque amount before the learned Appellate Court within one month.

(Para 2-9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 374 -- Cheque bounce case -- Interim deposit of compensation u/s 148 of NI Act – Restoration of compensation to accused/appellant – Order of – Requirement of -- Legally incumbent upon the learned First Appellate Court, to order that in case there is allowing of the appeal, as preferred before it, by the accused-convict, thereupon the interim compensation, as determined, be restored or refunded to the accused/ convict, by the complainant -- However, the directions, as legally required to be made, while being seized with an application, u/s 148 of the NI Act, are not existing, hence the order suffers from an infirmity.

(Para 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Return of complaint – Delay in refiling -- Patiala House Court returned the original complaint to present it before the appropriate Court having jurisdiction, i. e. Saket Court on 25.08.2014, the physical copy of which was received by the complainant on 13.10.2015 and complaint was refiled with the Saket Court on 4.11.2015 – Saket Court not accepted the complaint on the ground that it was not filed within 30 days as per direction – High Court affirmed the same – If view accepted, without deciding the complaint on merits the accused would be acquitted and the complainant would be without any remedy – Orders passed by Saket Court and High Court set aside -- Saket Court directed to accept the refiled complaint and decide same in accordance with  law and on its own merits.

(Para 2-5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 142, 145(2) – Cheque bounce case -- Striking off evidence of complainant -- Application of the petitioners/accused for striking off the evidence dismissed by Trial Court – Challenge to -- In case the complainant is required to be re-examined, the Court needs to pass a specific order either on the application u/s 145(2) of the N.I. Act or suo motu by the Court – Trial Court has allowed the complainant for re-examination suo motu, keeping in view the peculiar facts and circumstances of the case and the stakes involved therein in view of the enunciation of law laid down by the Supreme Court in Indian Bank Association’s case 2014 (5) SCC 590 and as such the application of the petitioners for striking off the evidence has rightly been dismissed -- If the complainant is not allowed in the case at hand to file detailed affidavit, then the purpose and purport of the provisions contained in the N.I. Act would be rendered to be a nullity and the same would definitely prejudice the indefeasible rights of the complainant – Petition dismissed.

(Para 1, 10-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Code of Criminal Procedure, 1973 (2 of 1974), Section 357(3), 389 -- Conviction in Cheque bounce case – Non-compliance of 20% deposit of compensation order – Cancellation of bail -- R.I. for a period of one year and to pay Rs.13,00,000/- as compensation and in default further R.I. for three months – Appellate court directed the petitioner to deposit 20% of the amount of compensation within a period of 60 days -- Instead of depositing, the petitioner chose to file review and the same was dismissed, statutory period of 90 days for compliance elapsed -- Consequently, petitioner’s bail was cancelled and his bail bonds were forfeited to the State -- After a period of about more than 2 ½ years, the petitioner approached High Court for setting aside the impugned orders – Held, conduct of the petitioner itself shows that he is adopting dilatory tactics in order to evade and avoid the payment of compensation -- Petition dismissed.

(Para 6-9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 420 – Cheque bounce case -- Cheating -- Amount advanced towards the business transaction and loan agreement entered into between the parties -- Period for repayment was agreed and the cheque issued to ensure repayment -- Mere dishonour of the cheque cannot be construed as an act with a deliberate intention to cheat and the mens rea in that regard cannot be gathered from the point the amount had been received -- No offence u/s 420 IPC is made out.

(Para 11)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Loan agreement – Security cheque – Complaint u/s 138 of N.I. Act, 1881 -- A cheque cannot be considered as a worthless piece of paper under every circumstance -- If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same -- On such presentation, if the same is dishonoured, the consequences contemplated u/s 138 and the other provisions of N.I. Act would flow.

(Para 12-16)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Loan transaction – Civil remedy -- Security cheque – Complaint u/s 138 of N.I. Act, 1881 -- Prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security -- Holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation.

(Para 17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 389 – Cheque bounce case – Conviction in -- Suspension of sentence – Pre-deposit of 20% of compensation amount – Non-waiver of – Reasoning for – Requirement of -- While dealing with the exceptional circumstances, the Court has to justify the direction for waiver by assigning reasons – If a prayer for waiver of pre-deposit has been made before the Appellate Court, the minimum requirement for compliance of principle of natural justice would be that the litigant comes to know from the order passed that the plea raised by him were considered and dealt with -- Supreme Court decision was not considered -- It is not forth coming from the order that the pleas raised by the petitioner for waiver of pre-deposit were dealt with, it is so, as the Court proceeded on the basis that there is no discretion for waiver -- Impugned orders are set aside -- Petitions disposed of by remanding the matter back to the Appellate Court, to consider the application for suspension of sentence and prayer for waiver of pre-deposit afresh in view of decision of the Supreme Court in Surinder Singh Deswal's case 2019 AIR (Supreme Court) 2956 = (2019) Law Today Live Doc. Id. 10018 = 2019 (1) L.A.R. 21.

(Para 9-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 – Cheque bounce case -- Convicted u/s 138 of the N.I. Act on 17.8.2018 -- Appeal preferred by petitioner -- Challenge to the order passed Appellate Court whereby he has been directed to deposit 20 % of the compensation amount -- Contends that as the complaint has been filed prior to the amendment of Section 148, the same was not applicable to the case of the petitioner – Section 148 has been introduced w.e.f. 01.09.2018 and amendment shall have retrospective effect and shall be applicable to all the pending cases even wherein the complaints were filed prior to 01.09.2018 – Petition dismissed. Surinder Singh Deswal’s case 2020(1) RCR (Criminal) 604 = (2019) Law Today Live Doc. Id. 10018 = 2019 (1) L.A.R. 21 relied.

(Para 3-7)