***

Dishonour of cheque -- Material alteration -- Cheque originally made out for Rs.10,000/-, altered to Rs.1,10,000/- -- Material alteration apparent on face of cheque -- Courts below ought not to have insisted upon any further evidence -- Conviction cannot be sustained.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Dishonour of cheque -- Material alteration -- Cheque originally made out for Rs.10,000/- altered to Rs.1,10,000/- -- Words “One Lak” inserted before “Ten Thousand only” and numerical “1” inserted before “10,000/-” -- Material alteration manifest on bare perusal of cheque -- Courts below erred in insisting upon further evidence in that regard -- Conviction of appellant for dishonour of cheque, held, cannot be sustained -- Judgments of Courts below set aside.

(Paras 4 to 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Dishonour of cheque -- Material alteration -- Effect -- Where alteration in cheque is patently clear and manifest on the face of cheque itself, no further evidence is required to establish such material alteration -- Conviction based upon dishonour of materially altered cheque cannot be sustained.

(Paras 6 to 8)

***

Dishonour of cheque -- Conviction -- Plea of guilt -- Admission of issuance and signatures on cheque not amounting to unqualified, unambiguous and voluntary admission of guilt -- Mandatory procedure under Sections 251 and 252 Cr.P.C. not complied with -- Conviction unsustainable.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Sections 251, 252 and 375 -- Dishonour of cheque -- Conviction -- Plea of guilt -- Statement of accused under Section 251 Cr.P.C. -- Accused admitting issuance and signatures on cheque but stating that cheque was given as security in connection with business transaction -- Such statement not constituting unqualified, unambiguous, clear and voluntary admission of guilt -- Magistrate required to state particulars of offence to accused and record plea as nearly as possible in words used by him -- Strict compliance with Sections 251 and 252 mandatory -- Mere admission of issuance of cheque and signatures thereon, without admission of legally enforceable debt or unconditional liability, insufficient to record conviction on plea of guilt -- Essential ingredient of offence relating to service of statutory demand notice not put to accused while recording plea -- Alleged admission, therefore, not sufficient to sustain conviction -- Payment of Rs.50,000 during pendency of complaint not amounting to admission of guilt -- Appellate Court having no jurisdiction to entertain appeal against conviction recorded on plea of guilt in view of Section 375 Cr.P.C. -- Impugned judgments set aside -- Matter remanded to Trial Magistrate to proceed further in accordance with law.

(Paras 8–21)

***

Dishonour of cheque -- Cash transaction in violation of Section 269SS, Income Tax Act, does not render transaction unenforceable under Section 138 of NI Act.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Sections 118(a), 138 and 139 -- Dishonour of cheque -- Presumption -- Execution of cheque admitted -- Presumption that cheque was drawn for consideration and received in discharge of legally enforceable debt or liability arises against accused -- Presumption rebuttable, but mere denial not sufficient.

(Paras 13 and 14)

B. Negotiable Instruments Act, 1881 (26 of 1881), Sections 118(a), 138 and 139 -- Income Tax Act, 1961 (43 of 1961), Sections 269SS and 271D -- Dishonour of cheque -- Cash transaction -- Violation of Section 269SS -- Such violation attracts penalty under Section 271D but does not render transaction illegal, invalid or statutorily void or unenforceable under Section 138 of N.I. Act or rebut presumptions under Sections 118 and 139 -- View that transaction in cash above Rs.20,000 is illegal and void and does not constitute legally enforceable debt cannot be countenanced -- Appeal dismissed.

(Paras 13 to 16)

***

NI Act -- Suspension of sentence -- Deposit of 20% compensation -- Requirement not absolute -- Appellate Court must exercise judicial discretion and consider exceptional circumstances before imposing condition of deposit.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 148 -- Suspension of sentence -- Appeal against conviction under Section 138 -- Deposit of 20% of compensation -- Appellate Court directed appellant to deposit 20% of compensation while suspending sentence without examining whether the case fell within the exceptions recognised by the Supreme Court and the Division Bench of the High Court -- Requirement of deposit under Section 148 is not absolute and may be reduced below 20% or waived altogether in exceptional circumstances by assigning reasons -- Failure to exercise judicial discretion rendered the impugned order unsustainable -- Matter remanded to the Appellate Court for fresh consideration after affording opportunity to the appellant to establish exceptional circumstances warranting reduction or waiver of deposit.

(Paras 5 & 6)

***

Dishonour of cheque -- Vicarious liability -- Complaint must be read as a whole -- Participation in antecedent financial transactions and execution of documents constitutes sufficient foundation for prosecution under Section 141 N.I. Act -- Mere status as office-bearer, without specific role in transaction, insufficient to attract liability.

***

Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 141 -- Code of Criminal Procedure, 1973, Section 482 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528 -- Dishonour of cheque -- Vicarious liability -- Society -- Office-bearers -- Quashing of complaint -- High Court quashed proceedings against Vice-President, Treasurer, Executive Member and Manager of borrowing Society on ground of absence of specific averments -- Complaint alleging respondents were in-charge of and responsible for affairs of Society -- MoU, promissory notes and allied financial documents showing participation of Vice-President, Treasurer and Manager in underlying borrowing transaction -- Treasurer also signatory to dishonoured cheque -- Complaint required to be read as a whole and not in isolated fragments -- Participation in antecedent financial transactions and execution of documents constituted sufficient foundational material for continuation of prosecution against Vice-President, Treasurer and Manager -- No specific role, document or material connecting Executive Member with transaction -- Mere status as office-bearer, without specific role in transaction, insufficient to attract liability -- Quashing set aside qua Vice-President, Treasurer and Manager and upheld qua Executive Member.

(Paras 27 to 43)

***

Dishonour of cheque -- Settlement -- Entire settlement amount received by complainant -- Conviction and sentence set aside and appellant acquitted.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Dishonour of cheque -- Compounding after conviction -- Settlement -- Parties having compromised and compounded the offence during pendency of Special Leave Petition -- Respondent-complainant having received entire settlement amount and agreed to cooperate for setting aside conviction -- In view of settlement, impugned order, conviction and sentence set aside -- Appellant acquitted of charge under Section 138 -- Appeal allowed.

(Paras 2 to 7)

***

Presumption -- Cheque bounce complaint – Once issuance and signature on cheque are not disputed, presumption u/s 139 that cheque was issued for legally enforceable debt arises and cannot be dislodged in summary manner at pre-trial stage – Complaint restored for trial.

***

Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 438, 528 -- Cheque bounce complaint – Issuance of process – Presumption -- Dismissal of complaint at pre-trial stage – At the stage of issuance of process what is prima facie required to be seen is issuance of cheque by drawer, its dishonour on presentation, issuance of statutory notice and filing of complaint within prescribed period – Once issuance of cheque and signature are not disputed, statutory presumption u/s 139 that cheque was issued for discharge of legally enforceable debt or liability comes into play – Burden shifts on drawer to prove contrary during trial – Statutory presumption cannot be dislodged in a summary manner at pre-trial stage by contending that cheque was not issued for legally enforceable debt – Sessions Court and High Court erred in setting aside order issuing process – Complaint restored for trial on merits.

(Paras 8-12)

***

Multiple cheque bounce complaints -- Each dishonour constituting a distinct cause of action – Filing of two separate complaints held maintainable despite common transaction; conviction upheld and sentences directed to run concurrently.

***

Security cheque given by husband – Cheque bounce complaint -- Loan liability of wife -- Drawer cannot escape from its liability merely on ground that debt was not personally incurred -- Conviction upheld.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Two separate complaints – Maintainability of -- Common financial transaction -- Seven cheques issued towards repayment of loan – Two cheques issued jointly by both accused while remaining five issued solely by one accused – Cheques dishonoured on different dates and followed by separate statutory notices – Each dishonour giving rise to a distinct cause of action under Section 138 NI Act – Filing of two separate complaints based on different drawers of cheques held legally permissible – Mere fact that cheques arose out of a common transaction not rendering separate complaints impermissible – Conviction upheld, sentences of imprisonment awarded to revisionist in both complaint cases ordered to run concurrently.

(Para 14, 15, 19)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Security cheque -- Liability of drawer – Loan by wife – Cheque by husband as security – Accused admitted signatures on cheques and admitted handing over cheques for repayment of loan – Presumption under Section 139 NI Act operating in favour of holder – Drawer issuing cheque towards discharge of liability of another person cannot escape liability merely on ground that debt was not personally incurred – Plea of “security cheque” insufficient in absence of credible rebuttal evidence – Conviction upheld.

(Para 16)

***

Scope of S. 528 BNSS -- Inherent powers u/s 528 BNSS are to be exercised sparingly and cannot be used unless the order reflects patent illegality or miscarriage of justice

***

Evidence -- Exhibiting a document does not amount to its proof; its execution and admissibility must still be established, failing which the Court may disregard it at final adjudication

***

Evidence -- Attorney of complainant can tender documents, subject to the accused’s right to challenge their admissibility and proof and evidential value during cross-examination and at the stage of final arguments

***

A. Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528 -- Inherent power u/s 528 of BNSS -- Scope of – Cane be exercised to prevent abuse of the process of law or to secure the ends of justice -- Jurisdiction is to be exercised sparingly and with great caution and interference is warranted only where the impugned order suffers from patent illegality, perversity or results in manifest miscarriage of justice -- Inherent jurisdiction cannot be invoked merely because another view is possible or to re-appreciate the factual aspects which have already been considered by the trial Court.

(Para 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- Marking or exhibiting of a document does not dispense with the requirement of proving the same in accordance with law -- Party relying upon the document still carries the burden to establish its execution, authenticity and admissibility -- If such proof is not forthcoming, the Court is always competent to eschew the document from consideration at the stage of final adjudication.

(Para 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint  – Evidence by attorney -- Once the attorney had been duly substituted to prosecute the complaint on behalf of the complainant and the complainant’s evidence was still continuing, the tendering of documents during the course of such evidence cannot be said to be wholly impermissible – Contention that the documents could not have been tendered by the Special Power of Attorney without prior permission of the Court does not merit acceptance -- Other party retains full liberty to challenge the admissibility, mode of proof and evidentiary value of such documents during cross-examination and at the stage of final arguments.

(Para 11)

***

Jumping bail – Cancellation of bail – Non-bailable warrants – Bail cannot be cancelled mechanically or non-bailable warrants issued without cogent reasons, particularly in the absence of misconduct, lack of bona fides or deliberate evasion of proceedings by the accused.

***

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 480(5), 528 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Jump of bail – Cancellation of bail -- Non-bailable warrants -- Learned trial Court, while cancelling bail, straight away proceeded to issue non-bailable warrants – Held, cancellation of bail orders amounts to an unjustifiable restriction on the procedural rights of the petitioner in the absence of any misconduct, lack of bona fides, or a deliberate attempt to evade the proceedings on his behalf -- Issuance of non-bailable warrants must not be exercised in a mechanical manner and the same must be adopted sparingly and only upon the recording of cogent reasons reflecting the necessity of adopting such a stringent course -- Petitioner-accused himself come forward to face trial -- Petition allowed, impugned order set aside.

(Para 7-9)

***

Cheque dishonour -- Complainant's right to appeal against acquittal without special leave under Section 378(4) of Cr.P.C. -- Divergent views -- Issue referred for authoritative pronouncement by larger Bench.

***

Code of Criminal Procedure, 1973 (2 of 1974), Sections 372 and 378(4) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Dishonour of cheque -- Appeal against acquittal -- Complainant -- Proviso to Section 372 -- In Celestium Financial's case, 2025 INSC 804 = (2025) Law Today Live Doc. Id. 20136, it was held that complainant in a case under Section 138 of Negotiable Instruments Act is a 'victim' who would be entitled to file an appeal under proviso to Section 372 without seeking special leave under Section 378(4) -- Present Bench unable to agree with such interpretation -- Earlier decisions holding to the contrary not considered -- Issue having far-reaching consequences -- Matter may be placed before Chief Justice for appropriate directions for authoritative pronouncement by larger Bench.

(Para 1-4)

***

Anticipatory bail – Non-bailable warrants – 138 NI Act -- Not maintainable where accused is summoned for a bailable offence; petition disposed of with liberty to surrender before trial Court and seek regular bail.

***

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 482 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint – Non-bailable warrants – Anticipatory bail – Maintainability of -- Since the petitioner has been summoned in a bailable offence, therefore, the provisions of Section 482 of BNSS are not attracted  -- Petition disposed of -- Petitioner on his surrender before the learned trial Court will be admitted to bail subject to the conditions being imposed upon him by the learned trial Court.

(Para 3)

***

Cancellation of bail -- Suspension of sentence – Bail cancellation for non-appearance – Absence occasioned by father’s serious illness and hospitalization held sufficient ground; cancellation order and warrant set aside subject to payment of Rs.10,000/- costs.

***

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 415, 430 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Conviction in cheque bounce complaint – Appeal – Suspension of sentence – Jump of bail -- Due to non-appearance of the petitioner before the learned Appellate Court, his bail order was cancelled -- Warrant of arrest issued -- Reason for his absence is that his father was seriously ill and got hospitalized on the same day -- Petition disposed of, impugned order set aside subject to payment of costs of Rs.10,000/-.

(Para 6)

***

Suspension of sentence – Deposit of 20% compensation – Appellate Court must first examine whether exceptional circumstances warrant waiver of the statutory deposit condition; matter remanded for fresh consideration after affording the petitioner an opportunity to establish such circumstances.

***

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 – Appellate court suspended the sentence of petitioner, subject to his depositing 20% of the compensation amount with the trial Court -- Appellate Court was firstly required to consider as to whether the instant case falls within the exceptions warranting grant of suspension of sentence without imposing condition of deposit of 20% of compensation amount/fine – Matter remanded back for deciding the same afresh after re-examining the case by granting an opportunity to the petitioner to make submissions regarding exceptional circumstances warranting waiver of requirement of depositing 20% of the compensation. Jamboo Bhandari’s case (2024) 1 SCC (Cri) 90 = (2023) Law Today Live Doc. Id. 18509.

(Para 3-5)

***

Suspension of sentence – 138, 148 NI Act & 415, 430 BNSS – 20% compensation deposit – Where the appellant is unable to furnish the deposit and continued incarceration would prejudice liberty, the Appellate Court should prioritize the appeal and endeavour to decide it preferably within 60 days and not later than 90 days, subject to extension where delay is attributable to the complainant.

***

Suspension of sentence – 138, 148 NI Act & 415, 430 BNSS – 20% compensation deposit – Appellate Court’s discretion to exempt the statutory deposit also encompasses power to reduce it below 20%, having regard to the convict’s financial capacity and circumstances.

***

Suspension of sentence – 138, 148 NI Act & 415, 430 BNSS – Deposit may be imposed as a condition for suspension of sentence, but non-compliance cannot defeat the pending appeal or extinguish the appellant’s right to have it decided; the 20% requirement is not absolute and may be reduced or waived in exceptional circumstances with reasons.

***

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)

***

Appeal against acquittal – Right of complainant – Proviso to Section 372 Cr.P.C./Section 413 BNSS confers a broader right of appeal than the restricted remedy under Section 378(4) Cr.P.C./Section 419(4) BNSS; matter remitted to Sessions Judge to treat the appeal as one under Section 372 Cr.P.C./Section 413 BNSS.

***

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)

***

Appeal against acquittal – 138 NI Act -- Delay – Leave application under Section 378(4) directed to be treated as an appeal under Section 372 Cr.P.C./Section 413 BNSS and remitted to competent Appellate Court, which shall decide the appeal on merits without being impeded by the delay involved.

***

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)

***

Vicarious liability of Director – 138, 141 NI Act -- Pleadings – Matters relating to the administrative role and affairs of the company being within the special knowledge of the directors, complainant is not required to plead specific details of the Director’s role in the complaint.

***

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)

***

Proclamation – 138 NI Act -- Attachment of property – Objections – Magistrate cannot defer consideration of objections by the claimed owner until implementation of attachment; objections must be decided expeditiously after hearing the parties, without awaiting compliance report.

***

Proclamation – 138 NI Act -- Attachment of property – Objections – Section 84 Cr.P.C does not bar a third party from raising objections prior to attachment; Court is required to adjudicate such objections and, if the property is found not to belong to the accused, decline or withdraw the attachment.

***

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)

***

Suspension of sentence – Deposit of 20% compensation – Appellate Court required to consider whether exceptional circumstances warranting waiver/reduction exist; condition set aside and matter remanded for fresh consideration in light of Jamboo Bhandari 2013 (12) SCALE 611.

***

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)

***

Compounding -- Settled amount paid to bank and bank having no objection to compounding – Object of Section 138 NI Act being compensatory and recovery-oriented, conviction and sentence set aside and petitioner acquitted.

***

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)

***

Quashing of FIR – Findings recorded in earlier Section 138 NI Act proceedings between the parties on the same issue bind them in subsequent proceedings; Accused in 138 case cannot maintain prosecution based on allegations which were his own defence in the earlier proceedings – Criminal proceedings under Section 420 IPC quashed.

***

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)

***

Suppression of material facts – Quashing -- Complainant suppressed the accused’s reply letters to statutory notice u/s 138 of NI Act seeking documents, in the complaint and statement on oath u/s 200 CrPC – It amounts to abuse of process of law, complaint and the order of cognizance quashed

***

Complaint u/s 200 CrPC (Section 223 BNSS) – Learned Magistrate is duty bound to examine the complainant on oath and witnesses, if any, present and reduce the substance of such examination into writing, required to be signed by the complainant and witnesses

***

Summoning – Magistrate must examine the complainant to ascertain the truth and apply his mind to determine whether sufficient grounds exist to issue process or not

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 200 (223 BNSS), Section 482 (528 BNSS) – Complaint in cheque bounce case -- Suppression of facts -- Effect: Statutory notice u/s 138 NI Act was issued by the complainant’s advocate – Appellant/ accused’s advocate write twice within few days seeking supply of documents relied upon in the notice – Documents were not supplied – Complainant suppressed the reply letters sent by the accused in the complaint as well as in the statement on oath under Section 200 CrPC – As the complainant suppresses material facts and documents, he cannot be allowed to set criminal law in motion based on the complaint – It is nothing but an abuse of the process of law – Held, High Court ought to have interfered and quashed the complaint -- Impugned order of the High Court set aside -- Complaint and the order of cognizance quashed and set aside.

(Para 13-22)

B. Code of Criminal Procedure, 1973 (2 of 1974), Section 200 (223 BNSS) – Complaint – Examination of complainant/ witness -- After a complaint is filed u/s 200 of the CrPC, the learned Magistrate is duty-bound to examine the complainant on oath and witnesses, if any, present and reduce the substance of such examination into writing -- What is reduced into writing is required to be signed by the complainant and witnesses, if any.

(Para 9)

C. Code of Criminal Procedure, 1973 (2 of 1974), Section 200 (223 BNSS) – Complaint – Examination of complainant/ witness -- Recording the complainant's statement on oath u/s 200 of the CrPC is not an empty formality, object is to ascertain the truth -- Learned Magistrate is duty-bound to put questions to the complainant to elicit the truth -- Learned Magistrate has to apply his mind to ascertain whether there is sufficient ground for proceeding against the accused -- If he is satisfied, then the learned Magistrate has to issue a process in terms of sub-Section (1) of Section 204 of the CrPC (227 BNSS) -- Setting criminal law in motion is a serious matter.

(Para 10)

***

Appeal – 138 NI Act -- Deposit of 20% compensation – Appellate Court may require production of income-tax returns to assess financial capacity and must balance the statutory deposit requirement against the appellant’s right of appeal; direction held not illegal.

***

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)

***

Suspension of sentence – Appeal – Deposit of 20% compensation – Petitioners exempted from depositing Rs.43,65,125/- during pendency of appeal on joint request of parties; considering pendency since 11.01.2018, Appellate Court directed to decide the appeal within four months.

***

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)

***

Suspension of sentence – Appeal -- Deposit of 20% compensation – Appellate Court imposed condition without recording reasons; condition set aside and matter remanded for fresh consideration after hearing parties in accordance with Jamboo Bhandari, (2023) Law Today Live Doc. Id. 18509 with coercive action stayed meanwhile.

***

Appeal -- Deposit of 20% compensation – 138 NI Act -- Requirement – Deposit of minimum 20% of fine or compensation is not an absolute mandate; Appellate Court has discretion to waive or reduce the deposit in exceptional circumstances having regard to the facts of the case.

***

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)

***

Enquiry before issuance of process – 138 NI Act -- Mandatory compliance – Failure to undertake enquiry under Section 225 BNSS (erstwhile Section 202 Cr.P.C.) before issuing process vitiated the proceedings; matter remanded for fresh consideration in accordance with law.

***

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)

***

Second petition -- 482 CrPC – Maintainability – Change in law constitutes a vital change in circumstances permitting a subsequent petition despite earlier withdrawal without liberty, subject to satisfaction that intervention is necessary to prevent abuse of process or secure the ends of justice.

***

 ‘May’ and ‘shall’ – Mandatory or directory – Use of ‘may’ or ‘shall’ is not conclusive; legislative intent must be gathered from the entire statute, relevant provisions and context to determine whether the provision is mandatory or directory.

***

Suspension of sentence – 148 NI Act -- Appeal against conviction – Interpretation of ‘may’ and ‘shall’ – Legislative use of ‘may’ and ‘shall’ in the same provision must be given their literal meaning where it does not cause absurdity; hence, ‘may’ means ‘may’ and ‘shall’ means ‘shall’.

***

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)

***

Moratorium – 138 NI Act -- Cheques issued after appointment of IRP and imposition of moratorium, when account was blocked pursuant to NCLT order – Petitioners not vicariously liable for dishonour – Summoning order and consequential proceedings quashed.

***

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)

***

Proclaimed person – 138 NI Act -- Petitioner willing to join proceedings – Impugned order set aside subject to payment of ?10,000 costs and surrender within 10 days, with direction to consider bail and revival of complaint in accordance with law.

***

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)

***

Dismissal for non-prosecution – 138 NI Act -- Complainant’s absence due to counsel noting wrong date – Magistrate must exercise discretion judiciously and in the interest of justice; complaint restored to its original number.

***

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)

***

Absence of accused – Forfeiture of bail bond – In proceedings of semi-criminal/civil nature, personal presence of accused should ordinarily not be insisted upon when an appropriate exemption application is moved, unless presence is required for examination or recording of statement; forfeiture proceedings set aside.

***

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)

***

Suspension of sentence – 138 NI Act -- Appeal – Pre-deposit of 20% compensation – Considering petitioner’s financial condition, pre-deposit condition set aside to avoid jeopardising the appeal; Sessions Court directed to hear and decide the appeal without insisting on pre-deposit.

***

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)

***

Resile form Compromise – 138 NI Act -- Conviction – Complainant resiling from compromise after receiving Rs.3 lakh and having no objection – Resiling held immaterial; continuation of proceedings would amount to abuse of process – Complaint, conviction and sentence quashed on basis of compromise.

***

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)

***

Dropping of proceedings – 138 NI Act -- Once cognizance is taken and process is issued, Magistrate cannot subsequently drop the proceedings; revisional court erred in holding otherwise.

***

Account frozen – Dishonour due to reason ‘account frozen’ – Complaint under Section 138 is maintainable even where the cheque is dishonoured on account of the drawer’s account being frozen.

***

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)

***

Interest on loan repayment – 138 NI Act -- Addition of interest to principal amount does not negate the cheques’ character as repayment of loan, particularly where the accused admitted signing the cheques and failed to stop their payment, while closure of bank accounts soon after issuance raised serious questions about his conduct – Conviction upheld.

***

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)

***

Interim compensation – 138, 141, 143A NI Act -- Company cheque – Section 143A fastens liability on the drawer of the cheque and cannot be broadened to include authorised signatories or directors beyond the statutory text.

***

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)

***

Proclaimed person – Cheque bounce complaint – Settlement and withdrawal of complaint – FIR under Section 174-A IPC and all consequential proceedings quashed.

***

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)

***

Handwriting expert – 138 NI Act -- Where accused does not dispute signatures, heavy burden lies on him to explain how cheque came into complainant’s possession; mere difference in handwriting on cheque does not constitute a defence – Application rightly rejected.

***

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)

***

Recall/examination of witness – Section 311 CrPC – Scope – Power is intended to discover the truth and ensure a just decision by obtaining relevant evidence; must be exercised judiciously and not arbitrarily, and an application cannot be rejected merely because the case has been pending for a long time.

***

Re-examination of complainant – 138 NI Act -- Subsequent challan in FIR arising from same transaction disclosed new facts having bearing on case; complainant permitted to be re-examined/cross-examined on such facts under Section 311 CrPC, subject to ?5,000 costs.

***

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)

***

Suspension of sentence – Appeal – Deposit of 20% compensation – Appellate Court must consider whether the case falls within an exceptional category warranting waiver or reduction of the statutory deposit before imposing the condition; order set aside and matter remanded for fresh consideration.

***

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)

***

Compounding – 138 NI Act -- Where the parties subsequently settled the matter, conviction and sentence were quashed and the accused acquitted, subject to deposit of 10% of the cheque amount with HPSLSA.

***

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)

***

Compounding – 138, 147 NI Act -- Offence can be compounded even after conviction by the courts below, where the complainant has received/agreed to receive the entire compensation and has no objection; conviction and sentence quashed and accused acquitted.

***

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)

***

Presumption under Sections 118 & 139 – Rebuttal – Where witness identified the accused’s signatures and she failed to seek their comparison by a handwriting/fingerprint expert, presumption of legally enforceable liability remained unrebutted; cheque held to have been issued in discharge of liability.

***

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)

***

Acquittal – Alleged cash loan of Rs.5 lakh unsupported by documentary evidence, with no specific dates of loan or cheque issuance and concealment of material facts undermining the complainant’s credibility; acquittal upheld.

***

Presumption of legally enforceable liability – 138, 139 NI Act -- Alleged cash loan of Rs.5 lakh was advanced, the complainant bore a heavy burden to establish the underlying transaction before the statutory presumption could operate.

***

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)

***

Bank account statement of complainant – 138 NI Act -- Court can exercise power under S. 91 CrPC suo motu or on application of either party -- Matter remanded for fresh consideration.

***

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)

***

Interim compensation – 138, 143A NI Act -- Trial Court awarded maximum 20% of cheque amount under Section 143-A treating the provision as mandatory -- Held, Section 143-A is not mandatory and exercise of power must be in accordance with principles laid down by Supreme Court in Rakesh Ranjan Srivastava’s 2024) Law Today Live Doc. Id. 19277 -- Impugned order set aside and matter remanded for fresh consideration.

***

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)

***

Additional evidence -- Section 311 Cr.P.C. confers wide power, to be exercised only for strong and valid reasons with great caution.

***

Screenshots of mobile phone – 138 NI Act -- Copies of screenshots admissible subject to production of requisite Section 65-B Evidence Act certificate.

***

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)

***

Transfer of case – 138 NI Act -- Agreement executed at Pune; accused resident of Pune; dishonoured cheques drawn on Pune bank; jurisdiction clause conferred jurisdiction on Court where bank provided loan facility -- Cheques presented at Calcutta branch -- Entire cause of action arose at Pune -- Complaints transferred from Calcutta to Pune.

***

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)