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)

Code of Criminal Procedure, 1973 (2 of 1974), Section 311A – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Evidence Act, 1872 (1 of 1872), Section 45 – Cheque bounce complaint – Expert evidence – Specimen handwriting of stranger/ third party – Permissibility of – Persons whose specimen handwriting is sought are neither the complainant nor the accused in the proceedings and are only witnesses to the case – Being third parties to the litigation, the Court cannot direct them to give specimen handwriting -- Application rightly dismissed.

(Para 5-8, 11)

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

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)

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)

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 442 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Conviction in cheque bounce complaint – Compromise thereafter at revisional stage -- Object and purpose of proceeding initiated under the Act is to provide a compensatory mechanism for expeditious recovery of money and not just punishing the offender, which is a secondary concern – Appellant acquitted, compounding of offence will be subjected to cost of 7.5 % of the cheque amount in question to be deposited with DLSA – Petition allowed, order of conviction and sentence passed by Ld. Trial Court and affirmed by Ld. Appellate Court set aside.

(Para 9-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Conviction in cheque bounce complaint -- Compounding of offence -- Settlement between parties -- Acquittal – Parties have voluntarily settled the disputes between themselves -- Impugned judgments of conviction and sentence set aside – Petitioner acquitted of the charge u/s 138 of the Negotiable Instruments Act -- Cost of Rs.15,000/- imposed.

(Para 8-12)

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Absence in trial -- Cancellation of bail – Non-bailable warrants issued -- Prime object of cancellation of bail and forfeiture of bail bonds is securing the presence of the accused, the petitioner-accused come forward himself to face trial -- No tangible material brought forward to indicate likelihood of the petitioner to interfere with the prosecution evidence -- Petition allowed -- Impugned order as well as all consequential proceedings set-aside – Cost of Rs.5,000/- and conditions imposed.

(Para 6-8)

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)

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 84, 528 -- Bharatiya Nyaya Sanhita, 2023 (45 of 2023), Section 209 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 -- Indian Penal Code, 1860 (45 of 1860), Section 174A -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Proclaimed person – FIR u/s 174A IPC/ 209 BNS – Quashing -- When the petitioner came to know about the fact he surrendered before the learned trial Court and got the benefit of bail in the case -- Complaint has already been disposed of -- Once the main case stands decided, the FIR u/s 209 BNS (Section 174-A) amounts to abuse of process of law and deserves to be quashed – FIR quashed.

(Para 9-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce complaint – Quashing – Cheque from Joint account -- In the complaint there is no specific allegation that the petitioner was signatory to the cheque or that she had been instrumental or responsible for the day to day business of the firm on whose behalf the cheques were issued by the husband of the petitioner -- Taking into consideration the fact that the respondent has failed to aver and lead preliminary evidence qua the fact that the petitioner was in any way responsible for the day to day affairs of the company, on whose behalf the cheques were issued or that she had signed the same, order for her summoning to face trial for the commission of offence punishable u/s 138 of NI Act is perverse and deserves to be quashed -- Impugned order quashed, qua petitioner.

(Para 13-20)

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)

Indian Penal Code, 1860 (45 of 1860), Section 174A -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 200, 482 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Dishonour of cheque – Proclaimed person -- Original complaint withdrawn -- Quashing of FIR u/s 17A IPC – -- Since the original complaint related to the dishonoured cheque has been withdrawn, no useful purpose would be served by continuing the proceedings u/s 174-A IPC against the petitioner – FIR quashed.

(Para 8, 9)

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)

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 (1) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- There shall be no requirement to issue summons to the accused in terms of Section 223 of BNSS i.e. at the pre-cognizance stage -- Trial Court proceeded to issue notice to accused at the pre-cognizance stage in purported adherence to the first proviso to sub-section [1] of Section 223, BNSS – Impugned Order passed by the Trial Court set aside and quashed to the afore-stated extent -- Learned Trial Court directed to take a fresh decision on the matter of cognizance and issuance of process to the accused persons. Sanjabij Tari’s case 2025 INSC 1158 = (2025) Law Today Live Doc. Id. 20758 relied.

(Para 8-12)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Inherent powers of High Court – Quashing of FIR/ Complaint -- High Court must avoid usurping the function of a Trial Court or conducting a mini trial when disputed factual questions attend the maintainability of a complaint -- Power to quash criminal proceedings must be exercised sparingly, and only where the complaint, even if accepted in full, discloses no offence or continuation would amount to abuse of process of law -- Though the powers u/s 482 of the Cr.PC are very wide, its conferment requires the High Court to be more cautious and diligent -- While examining any complaint or FIR, the High Court exercising its power under this provision cannot go embarking upon the genuineness of the allegations made -- Court must only consider whether there exists any sufficient material to proceed against the accused or not.

(Para 26-28)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Multiple cheques – Multiple complaints – Maintainability of – Inherent powers of High Court for quashing of Complaints – Under section 138 of the NI Act, a separate cause of action arises upon each dishonour of a cheque -- Multiple cheques arise from one transaction will not merge them into a single cause of action -- Scheme of Section 138 of the NI Act does not bar prosecution in such circumstances -- Whether those cheques were issued as alternative or supplementary instruments, or represented fresh undertakings, is a disputed question of fact requiring evidence at the time of trial and cannot be resolved at the threshold -- Inherent jurisdiction of the High Court u/s 482 of the Cr.PC cannot be used to decide such disputed issues.

(Para 33, 34)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Presumption of liability – Disputing the liability – Inherent powers of High Court for quashing of Complaints – Burden of proving whether there exists any debt or liability is something which must be discharged in trial -- Where the accused approaches the Court seeking quashing of proceedings even before the commencement of trial, the Court must exercise circumspection and refrain from prematurely stifling the prosecution at the threshold, particularly by overlooking the legal presumption that operates in favour of the complainant – Complaints prima facie discloses the ingredients of offence under Section 138 of the NI Act and must proceed to trial.

(Para 43)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 174A – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528 – Settlement in cheque bounce complaint – Proclaimed person -- Offence u/s Section 174A IPC – Quashing -- Original offence u/s 138 of NI Act, alleged to have been committed in the year 2019 -- Subject matter of the original offence settled amicably between the parties and the criminal complaint withdrawn -- Impugned FIR u/s 174A IPC, as also all proceedings emanating therefrom quashed.

(Para 11, 12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint -- Cognizance without condoning delay – Quashing of complaint -- Power to take cognisance of a belated complaint is subject to the complainant first satisfying the Court that he had sufficient cause for not making the complaint within time -- The satisfaction in that regard, resulting in condonation of the delay, must therefore precede the act of taking cognizance -- Respondent made a categorical statement in her complaint that it was filed within time, when it was not – Held, Ld. Magistrate erred in taking cognisance of the respondent’s complaint u/s 138 of the NI Act, even before the delay of two days in its presentation was condoned – Complaint quashed.

(Para 14, 15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528, 491 -- Cheque bounce complaint – Jump of bail – Cancellation – Warrant of arrest issued -- As per, the petitioner, he had instructed his counsel to move an application for exemption, but he forgot to move the same – Held, learned trial Court was left with no option but to cancel the bail order, forfeit the bail bonds and issue warrant of arrest against the petitioner -- No illegality -- Petition disposed of with a direction to petitioner to surrender before the learned trial Court and if he surrenders and moves an application for bail, the learned trial Court to dispose of the bail application on the same day -- Learned trial Court in the exercise of its discretion shall be at liberty to impose penalty u/s 491 of BNSS.

(Para 4)

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 Courts must make efforts to decide the appeal within 60 days of the filing and not later than 90 days, where the appellant is not in a position to deposit the compensation amount as ordered by the Appellate Court -- Petition disposed of with direction to the learned Appellate Court concerned to hear the appeal of the petitioner and decide the same within a period of 60 days and not later than 90 days. M/s Coromandel International Limited, (2025) Law Today Live Doc. Id. 20750 (P&H HC) D.B. relied.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881) Section 138, 148 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 84, 528 --  Cheque bounce complaint – Proclaimed person -- Bail cancelled due to non-appearance – Petitioner suffering from HIV+ (AIDS) -- When the petitioner came to know about passing of the impugned order, he immediately moved the petition, showing his inclination to submit himself before the trial Court -- Petitioner can be given one chance to appear before the trial Court, so that proceedings may restart and continue in smooth manner --  Impugned order set aside, petitioner directed to be released on bail, in the eventuality of surrender by him before the trial Court on or before 09.01.2026.

(Para 8)

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 – Matter required to be sent back to the Appellate Court, for decision afresh on the application for suspension of sentence of the appellant/ petitioner in consonance with the order passed by the Larger Bench/Division Bench (2025) Law Today Live Doc. Id. 20750 (P&H HC) (DB) in the case of M/s Coromandel International Limited &  Shivam Jindal (supra) cases relied.

(Para 5)

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 – Matter remanded back – If, the Ld. Appellate Court comes to the conclusion that the deposits are expensive than the liberty, and the convict is not in a position to deposit and likely to forego his liberty even when the first appeal is yet to be decided, the Appellate Court must make efforts to prioritize hearing appeal and decide the same preferably within next sixty days of passing of fresh order, and not later than ninety days, which clearly aligns with the legislators’ intentions – Till the time application for suspension of sentence is decided afresh, the condition of deposit of 20% of the compensation amount, as directed by the Appellate Court in its earlier order, shall remain inoperative and the bail shall not be cancelled in consequence thereof.

(Para 7-9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 359, 403, 528 – Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 362, 482 – Cheque bounce complaints -- Offence u/s 138 of NI Act – Compounding of offence can be at any stage/ after conviction also – Not amounting to review/ alteration of judgment -- Act of permitting compounding u/s 147 does not partake the character of a “review” or “alteration” of the judgment on merits, as contemplated by Section 362 CrPC -- Cases under of the Negotiable Instruments Act, 1881 would not strictly fall under the restriction provided as per Section 362 Cr.P.C. -- Offence punishable u/s 138 of the NI Act is amenable to compounding at any stage of the proceedings, including after conviction, during appeal or revision and even subsequent to the dismissal thereof, provided the settlement between the parties is voluntary, lawful and bona fide.

(Para 24-26, 31)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 359, 403, 528 – Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 362, 482 – Cheque bounce complaints -- Offence u/s 138 of NI Act – Nature of – Compounding of -- Cheque dishonour cases are predominantly compensatory in nature -- The penal provision is intended as a deterrent to ensure the credibility of negotiable instruments and the smooth functioning of commercial transactions and not as a means of retributive incarceration -- Once the monetary liability stands discharged, the continuation of criminal proceedings would neither advance public interest nor subserve the ends of justice -- On the contrary, it would frustrate the very legislative policy of de-clogging courts and encouraging early resolution of commercial disputes.

(Para 32)

Code of Criminal Procedure, 1973 (2 of 1974), Section 397, 401 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Income Tax Act, 1961 (43 of 1961), Section 269SS – Cheque bounce complaint -- Cash transaction above Rs.20, 000/- -- Effect of -- High Court acquitted the accused mainly on the ground that the petitioner having extended financial assistance to the tune of Rs. 9,00,000/- by way of cash transaction in violation of provisions of Section 269SS of the Income Tax Act, 1961 -- Judgment rendered by the Kerala High Court in P.C. Hari Vs. Shine Varghese & Anr.: 2025 SCC Online Ker 5535, came up for consideration before Supreme Court, particularly, on the issue as to whether the cash transaction more than Rs 20,000/- (Rupees twenty thousand) is in violation of Section 269SS would render the transaction unenforceable under Section 138 of NI Act – It was held that any violation of Section 269SS would not render the transaction unenforceable under Section 138 of the NI Act or rebut the presumptions under Sections 118 and 139 of the NI Act -- Accordingly, the conclusion of law in P.C. Hari’s case set aside – Held, very foundation of the impugned judgment does not survive as the legal proposition on which the impugned judgment has been rendered, has been set aside -- Matter remitted back to the High Court for consideration afresh on merits as permissible under the revisional jurisdiction.

(Para 3-9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 439 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 483 -- Regular bail -- Cheque bounce complaint -- Jump of bail – Proclaimed person -- Petitioner already remained in custody for a period of about 26 days after surrendering before the Court -- Keeping in view the bailable nature of the offence u/s 138 of the NI Act, Court deemed appropriate to grant him the concession of bail subject to the Rs.10,000/- as costs – Bail allowed.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 357, 374, 389, 397, 401 – Cheque bounce complaint – Appeal against conviction -- Suspension of sentence – Condition to deposit of 20% of compensation – Exception to –  Ld. Appellate Court was required to consider whether the present case falls in the exception or not, which was not considered -- Matter remanded back, Ld. lower Appellate Court to re-examine the case after granting an opportunity to the petitioner to make submissions regarding the exceptional circumstances and decide whether it is an appropriate case that warrants waiver of the requirement of deposit of 20% of the compensation awarded by learned trial Court in the light of judgment passed by the Hon'ble Supreme Court in Jamboo Bhandari's case (2023) Law Today Live Doc. Id. 18509 = 2024(2) L.A.R. 323.

(Para 5, 6)

A. Constitution of  India, Article 21 – Criminal justice system – Curtailment of liberty -- Criminal justice system, though permitting curtailment of personal liberty, mandates that such deprivation must strictly conform to the procedure established by law -- The said procedure must be fair, just, and reasonable in terms of Article 21 of the Constitution of India.

(Para 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 84, 528 -- Cheque bounce complaint – Proclaimed person order – Challenge to -- Procedure prescribed u/s 82 Cr.P.C. (section 84 BNSS) was not complied with -- Three conditions, contained in sub-clauses (a) to (c) of Section 82(2)(i), are cumulative in nature -- A valid proclamation can be said to have been made only when all three modes of publication are duly complied with and proved -- Object behind issuance of non-bailable warrants or proclamation is only to secure the presence of the accused -- Petitioner has voluntarily approached this Court and undertaken to appear before the trial Court regularly -- Moreover, the petitioner is ready to settle the matter with the complainant -- Petition allowed, impugned order declaring the petitioner proclaimed person set aside – Petitioner to appear before the trial Court within four weeks and upon doing so ordered to be released on bail.

(Para 8-11)

Code of Criminal Procedure, 1973 (2 of 1974), Section 311 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 348 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- Bank statements in application u/s 311 of Cr.P.C (348 BNSS)  -- Permissibility of -- Documents allowed to be proved by the learned trial Court are the statement of account being maintained by the Public Bank in usual course of its business -- If the respondent/ complainant is seeking the assistance of some documents, i.e. statement of account of the parties, it cannot be held that the respondent-complainant has created an evidence in his favour during the pendency of the case -- No illegality committed by the learned trial Court while permitting the respondent-complainant to prove the documents.

(Para 9, 10)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Conviction in cheque bounce complaint – Whether Moral turpitude -- Not justifiable to categorize a matter involving dishonor of a cheque, issued in a personal capacity, as an offence involving moral turpitude.

(Para 12(i))

B. Payment of Gratuity Act, 1972 (39 of 1972), Section 4(6) -- Constitution of India, Article 226 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Conviction in cheque bounce complaint – Not an moral turpitude – Withholding of gratuity – Permissibility of -- Deceased employee was denied gratuity and leave encashment owing to his conviction u/s 138, NI Act -- Cheques qua which criminal complaints had been filed against the deceased were not issued by him in an official capacity to make unlawful gains for himself or cause unlawful loss to respondent-Corporation -- No moral turpitude can be attributed to the deceased – Deceased would be deemed to be in service till his death on 15.06.2022 -- Respondent-Corporation directed to release all the admissible service benefits, including gratuity and leave encashment, accrued to the deceased till the date of his death with interest at the rate of 6% p.a. -- Respondent-Corporation further directed to consider the case of petitioner No.2 for compassionate appointment.

(Para 11, 12)

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 – In M/s Coromandel International Limited v. Shri Ambica Sales Corporation, (2025) Law Today Live Doc. Id. 20750, the Larger Bench/Division Bench has given cumulative answers, which summarized law as under :

*The offence under Section 138 of the NI Act is bailable, and after summoning of the accused in a complaint under Section 138 of the NI Act, bail is a right subject to the furnishing of bonds.

*In the event of conviction and sentence, fine, and compensation, it is for the convict to decide whether to undergo the sentence or to challenge it before the Appellate Court by filing an Appeal.

*In the cases of juristic persons, these can only be fined, and in the absence of a substantive sentence of imprisonment, there is no need for these entities to seek suspension of sentence.

*Section 148 of the NI Act neither restricts right of the convict to challenge the conviction, sentence, or compensation by filing an appeal, nor does it permit the Appellate Court to impose any prerequisites for the appeal to be admitted or decided.

*Section 148 of the NI Act, due to its non-compliance, does not explicitly prohibit the suspension of sentence or the hearing of the appeal.

*Neither Section 148 nor any other provision of the NI Act prescribes any provisions for the suspension of sentence. Therefore, Section 430 of the BNSS, 2023 shall apply.

*Neither Section 148 of the NI Act nor Section 430 of the BNSS, 2023 places any specific restrictions on suspension of sentence. Instead, Section 430 of the BNSS has carved out a separate, most lenient category, and in cases where the sentence prescribed is up to three years of imprisonment, or when the offences in which an accused is convicted are bailable offences, the sentence is suspended by the trial Court/convicting Court.

*The very purpose of Section 430 of the BNSS, 2023, which corresponds to Section 389 Cr.P.C., is to restore the liberty curtailed post-conviction until the decision of the appeal challenging such conviction and sentence.

*Appellate Court assumes the jurisdiction to order a deposit under Section 148 of the NI Act only if the convict files an appeal before it, challenging the conviction and sentence, and the jurisdiction stays only during the pendency of such an appeal, and jurisdiction of the Appellate Court would eclipse on the decision of the appeal.

*In the absence of specific provision in the language of Section 148 of the NI Act, that in the absence of deposit of 20% of compensation, neither shall any appeal be entertained nor the sentence shall be suspended, it shall be re-writing Section 148 of NI Act and Section 430 of the BNSS, 2023, to treat the deposit of 20% as a prerequisite for filing an appeal or for suspending the sentence.

*During pendency of an appeal, the Appellate Court is also competent to direct a deposit upon the filing of an application by the complainant.

*The words, “(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.”, used in Section 148(2) of the NI Act are significant, because sixty days extendable by another thirty days, are granted to a convict to deposit only if the appeal is pending, because of the words, “in an appeal by the drawer against conviction” used in Section 148 of the NI Act. In case, before the expiry of said period (sixty days + thirty days), the appeal itself is decided, then the Appellate Court shall also lose its jurisdiction to order such deposit.

*If the appeal is not decided within 60 days, with a possible extension of 30 days, then the convict must comply with the directions, if any, to deposit the compensation amount.

*When the convict challenges the conviction, sentence, or compensation by filing an appeal, the 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 (supra) and Muskan Enterprises (supra), it can be reduced to below the statutory minimum of 20% or even waived in exceptional cases by assigning reasons.

*When a convict challenges the judgment of conviction by filing an appeal, then during the pendency of appeal, i.e. if the appeal is not decided within 60 days, extendable by 30 days, then the convict might be compelled to deposit the amount as was directed, by taking recourse to Section 395 BNSS, 2023.

*Deposit of a minimum 20% amount is not an absolute rule.

*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, the Appellate Courts must make efforts to prioritize hearing appeals filed against the convictions under Section 148 NI Act 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.

In view above, matters sent back to the Appellate Courts, for decision afresh on the application(s) for suspension of sentence of the appellant(s)/petitioner(s) herein, in consonance with the order passed by the Larger Bench/Division Bench of this Court in the case of M/s Coromandel International Limited.

(Para 9, 10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 438, 442 – Conviction in cheque bounce complaint -- Compromise at revisional stage – Legality of cost imposed -- Acquittal order subject deposit of cost with State Legal Service Authority in accordance with the judgment of this Court in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 – Held, construing it to be a law would discourage settlements at the revisional stage -- When the complainant has no objection, there cannot be any mandate of law directing the appellant to pay any further amount – Held, law laid down in the aforementioned judgment cannot be regarded as a binding precedent -- Direction imposing costs on the appellant cannot be sustained in the eye of law, particularly when the complainant does not want any further amount and the appellant has expressed his inability to comply with the same.

(Para 2-7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 427 -- Concurrent running of sentence -- Conviction in two cheque bounce complaints -- Both the cheques were issued for the discharge of single liability – Substantive sentence imposed ordered to run concurrently -- However, the sentence of payment of compensation shall remain intact in each case.

(Para 17)

A. Indian Trusts Act, 1882 (2 of 1882), Section 3 – Trust/ Trustee – Nature -- Only a Trustee has the obligation to file, maintain and defend any suit on behalf of the Trust -- Meaning thereby, that a Trust does not have a separate legal existence of its own, making it incapable of suing or being sued.

(Para 23)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Complaint against trustee -- Trust not party in complaint – Effect of : Whether in the absence of a Trust being made an accused in a complaint under the NI Act, when a cheque has been issued on behalf of the Trust, the said complaint would be maintainable against the Chairman/a Trustee of the said Trust?

-- Question posed is answered in the affirmative. When a cause of action arises due to an alleged dishonour of cheque and a complaint is initiated under the NI Act, the same is maintainable against the Trustee who has signed the cheque, without the requirement to array the Trust also as an accused.

(Para 29)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 372 -- Acquittal – Cheque bounce complaint dismissed in default -- Appeal against an order of acquittal in a proceeding u/s of the N. I. Act preferred by the complainant squarely falls within the ambit of proviso to Section 372 of Cr.P.C. -- Petition along with the accompanying application ordered to be remitted to the Court of learned Sessions Judge.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 438, 442 -- Conviction in cheque bounce complaint – Compromise at revision stage – Setting aside of conviction/ sentence -- Acquittal -- In case of dishonour of cheque, accused convicted, there is no stage prescribed for compounding of offence -- Petitioner permitted to compound the offence -- Considering the mitigating circumstances of the petitioner cost reduced to Rs.5,000/- -- Judgment of conviction/ order of sentence recorded by the trial Court and affirmed by the appellate Court set aside -- Petitioner acquitted.

(Para 11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Cheque bounce complaint -- Jump of bail – Proclaimed person – Primary object of every Court is only to examine the commission of crime in question before it viz-a-viz the person/ accused, who is subjected to such proceedings, and if possible justice be imparted at the earliest without unnecessary delay -- Not expected that undue time would be devoted in securing the presence of absconded accused and also to waste energy by enforcing the special mechanism to arrest such accused -- When the petitioner came to know about passing of the impugned order, the petitioner immediately moved the petition, showing his inclination to submit himself before the trial Court – Impugned order set aside to the extent of declaring the petitioner as ‘proclaimed person’ -- Petitioner ordered to be released on bail.

(Para 6-8)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143, 147 --  Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 278 -- Probation of Offenders Act, 1958 (20 of 1958), Section 3, 4, 5 -- Cheque bounce complaints -- Compounding of offence – Release on probation -- Not only a voluntary compromise can bring the proceedings under Section 138 NI Act to an end, but the accused under the said offence are entitled to benefit under the Probation of Offenders Act, 1958 -- Guidelines of compounding given in Damodar S. Prabhu’s case (2010) 5 SCC 663 modified :-

(a) If the accused pays the cheque amount before recording of his evidence (namely defence evidence), then the Trial Court may allow compounding of the offence without imposing any cost or penalty on the accused.

(b) If the accused makes the payment of the cheque amount post the recording of his evidence but prior to the pronouncement of judgment by the Trial Court, the Magistrate may allow compounding of the offence on payment of additional 5% of the cheque amount with the Legal Services Authority or such other Authority as the Court deems fit.

(c) Similarly, if the payment of cheque amount is made before the Sessions Court or a High Court in Revision or Appeal, such Court may compound the offence on the condition that the accused pays 7.5% of the cheque amount by way of costs.

(d) Finally, if the cheque amount is tendered before Supreme Court, the figure would increase to 10% of the cheque amount.

If the Accused is willing to pay in accordance with the aforesaid guidelines, the Court may suggest to the parties to go for compounding. If for any reason, the financial institutions/complainant asks for payment other than the cheque amount or settlement of entire loan or other outstanding dues, then the Magistrate may suggest to the Accused to plead guilty and exercise the power under Section 255(2) and/or 255(3) of the Cr.P.C. or 278 of the BNSS, 2023 and/or give the benefit under the Probation of Offenders Act, 1958 to the Accused.

(Para 35-39)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143, 147 --  Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223, 278 -- Probation of Offenders Act, 1958 (20 of 1958), Section 3, 4, 5 -- Cheque bounce complaints -- Compounding of offence – Massive backlog – Directions issued :-

-- In all cases filed under Section 138 of the NI Act, service of summons shall not be confined through prescribed usual modes but shall also be issued dasti i.e. summons shall be served upon the accused by the complainant in addition -- Trial Courts shall further resort to service of summons by electronic means  -- Complainant shall, at the time of filing the complaint, provide the requisite particulars including e-mail address, mobile number and/or WhatsApp number/messaging application details of the accused, duly supported by an affidavit verifying that the said particulars pertain to the accused/respondent.

-- The complainant shall file an affidavit of service before the Court. In the event such affidavit is found to be false, the Court shall be at liberty to take appropriate action against the complainant in accordance with law.

-- In order to facilitate expeditious settlement of cases under Section 138 of the NI Act, the Principal District and Sessions Judge of each District Court shall create and operationalise dedicated online payment facilities through secure QR codes or UPI links. The summons shall expressly mention that the Respondent/Accused has the option to make payment of the cheque amount at the initial stage itself, directly through the said online link. The complainant shall also be informed of such payment and upon confirmation of receipt, appropriate orders regarding release of such money and compounding/closure of proceedings under Section 147 of the NI Act and/or Section 255 of Cr.P.C./278 BNSS, 2023 may be passed by the Court in accordance with law. This measure shall promote settlement at the threshold stage and/or ensure speedy disposal of cases.

-- Each and every complaint under Section 138 of the NI Act shall contain a synopsis in the given format.

-- There shall be no requirement to issue summons to the accused in terms of Section 223 of BNSS i.e., at the pre-cognizance stage.

-- Since the object of Section 143 of the NI Act is quick disposal of the complaints under Section 138 by following the procedure prescribed for summary trial under the Code, the Court reiterated the direction given in In Re: Expeditious Trial of cases under Section 138 of NI Act (supra) that the Trial Courts shall record cogent and sufficient reasons before converting a summary trial to summons trial. To facilitate this process, the Trial Court shall be at liberty (at the initial post cognizance stage) to ask questions, it deems appropriate, under Section 251 Cr.P.C. / Section 274 BNSS, 2023 including the following questions:-

(i) Do you admit that the cheque belongs to your account? Yes/No

(ii) Do you admit that the signature on the cheque is yours? Yes/No

(iii) Did you issue/deliver this cheque to the complainant? Yes/No

(iv) Do you admit that you owed liability to the complainant at the time of issuance? Yes/No

(v) If you deny liability, state clearly the defence:

(a) Security cheque only;

(b) Loan repaid already;

(c) Cheque altered/misused;

(d) Other (specify).

(vi) Do you wish to compound the case at this stage? Yes/No

-- The Court shall record the responses to the questions in the order-sheet in the presence of the accused and his/her counsel and thereafter determine whether the case is fit to be tried summarily under Chapter XXI of the Cr.P.C. / Chapter XXII of the BNSS, 2023.

-- Wherever, the Trial Court deems it appropriate, it shall use its power to order payment of interim deposit as early as possible under Section 143A of the NI Act.

-- Since physical courtrooms create a conducive environment for direct and informal interactions encouraging early resolution, the High Courts shall ensure that after service of summons, the matters are placed before the physical Courts. Exemptions from personal appearances should be granted only when facts so warrant. Clarified that prior to the service of summons the matters may be listed before the digital Courts.

-- Wherever cases under Section 138 of the NI Act are permitted to be heard and disposed of by evening courts, the High Courts should ensure that pecuniary limit of the cheque amount is realistic. For instance, in Delhi, the jurisdiction of the evening courts to hear and decide cases of cheque amount is not exceeding Rs.25,000/-. Said limit is too low. The High Courts should forthwith issue practice directions and set up realistic pecuniary benchmarks for evening Courts.

-- Each District and Sessions Judge in Delhi, Mumbai and Calcutta shall maintain a dedicated dashboard reflecting the pendency and progress of cases under Section 138 of the NI Act. The dashboard shall include, inter alia, details regarding total pendency, monthly disposal rates, percentage of cases settled/compounded, average number of adjournments per case and the stage-wise breakup of pending matters. The District and Sessions Judges in aforesaid jurisdictions shall conduct monthly reviews of the functioning of Magistrates handling NI Act matters. A consolidated quarterly report shall be forwarded to the High Court.

-- The Chief Justices of Delhi, Bombay and Calcutta requested to form Committee on the Administrative side to monitor pendency and to ensure expeditious disposal of Section 138 of the NI Act cases. These Committees should meet at least once a month and explore the option of appointing experienced Magistrates to deal with Section 138 of the NI Act cases as well as promoting mediation, holding of Lok Adalats and other alternative dispute resolution mechanisms in Section 138 NI Act cases.

(Para 36)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 Proviso (b) – Cheque bounce complaint – Demand notice u/ 138 of NI Act – Validity of -- It is mandatory that the demand in the statutory notice has to be the very amount of the cheque -- After mentioning the exact cheque amount, the sender of the service may claim in the notice amounts such as legal charges, notice charges, interest and such other additional amounts, provided the cheque amount is specified to be demanded for payment -- When the cheque amount is not mentioned in the Proviso (b) notice or the amount different than the actual cheque amount is mentioned, in the notice, such notice would stand invalid in eye of law -- In the event of the main ingredient not being satisfied on account of discrepancy in the amount of cheque and one mentioned in the notice, all proceedings u/s 138 of the NI Act would fall flat as bad in law.

(Para 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 Proviso (b) – Cheque bounce complaint – Demand notice u/ 138 of NI Act – Validity of -- Cheque which was drawn by the respondent was for Rs.1,00,000/- whereas in the notice issued under Proviso (b) to Section 138 of the NI Act against the respondent, appellant mentions the amount of Rs.2,00,000/- -- Rigours of law on this score being strict, the defence would not hold good that the different amount mentioned in the notice was out of inadvertence -- Even if the cheque number was mentioned in the notice, since the amount was different, it created an ambiguity and differentiation about the ‘said amount’ -- Any elasticity cannot be adopted in the interpretation -- It has to be given technical interpretation -- Typographical error can be no defence -- Notice stood invalid and bad in law -- Order of quashment of notice was eminently proper and legal.

(Para 8.1, 8.2, 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 Proviso (b) – Cheque bounce complaint – Demand notice u/ 138 of NI Act – Validity of -- When the provision is penal and the offence is technical, there is no escape from holding that the ‘said amount’ in proviso (b) cannot be the amount other than mentioned in the cheque in question for dishonour of which the notice is received, nor the mentioning of omnibus amount in the notice would fulfil the requirement -- It has to be held that in order to make a valid notice under the Proviso (b) to Section 138 of the NI Act, it is mandatory that ‘said amount’ to be mentioned therein is the very amount of cheque, and none other.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Conviction in cheque bounce complaint -- Compromise -- Acquittal – Non-appearance of complainant – Compounding of offence -- Dispute resolved before the Mediation and Conciliation Centre and the report submitted by the Mediator -- Matter was adjourned on numerous occasions mostly on account of non-appearance on behalf of respondent No.1 -- Amount of Rs.1,10,000/-, as agreed between them, already stands paid to respondent No.1- complainant -- Non-appearance on behalf of the respondent No.1- complainant is nothing but delaying tactics for finalization of proceedings  -- Offence u/s 138 of the N.I. Act, 1881 permitted to be compounded under Section 147 of the Act -- Judgment of conviction and order of sentence set aside -- Petitioner acquitted.

(Para 6-11)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 121 – Pronote – Proof of – Plaintiff/ PW-1 reiterated the facts stated in the plaint -- PW-2 deposed that the pronote and receipt were written by him at the request of the defendant and further stated that the documents were duly read over and explained to the defendant, who, after understanding and acknowledging the contents to be correct and upon receiving Rs. 3,00,000/- in cash, affixed his signatures thereon -- Attesting witness to the pronote and receipt was also examined as PW-3, his testimony is in line with the assertions made by PW-1 and PW-2 --  PW-3 further affirmed that the defendant signed the documents in his presence and that he could identify the signatures of both the plaintiff and the scribe -- Defendant has not denied his signatures on the pronote and receipt, he merely pleaded that the documents were blank at the time of signing and that his signatures were obtained under a false pretext -- Plaintiff examined a handwriting and finger print expert as PW-5, who confirmed that the signatures on the pronote and receipt (Ex. P-1 and P-2) were indeed those of the defendant -- Both the Courts below have rightly found the execution of the pronote and receipt to be duly proved

(Para 7-10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 121 – Pronote – Presumption -- Fraud -- Burdon of proof -- Once the due execution of the pronote and receipt is proved through the consistent and credible evidence of the plaintiff and the defendant admits his signatures thereon, the burden shifts to the defendant to prove the allegations of forgery or the claim that the documents were signed under a false pretext -- It is a settled principle that the person alleging fraud must prove it -- Self-serving testimony of the defendant as DW-1 is insufficient to dislodge the otherwise consistent and credible evidence of the plaintiff, PW-2 (scribe), and PW-3 (attesting witness), especially in light of the defendant’s admission regarding his signatures on the pronote note and receipt -- In view of the provisions of Section 118 & 121 of the N.I. Act, the defendant cannot deny receipt of consideration or question the paying capacity of the plaintiff, as the plaintiff is claiming under a pronote, which is promissory note.

(Para 11-15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 121 – Pronote – Execution of -- Allegation of forgery – Proof of – Suit for recovery decreed by learned Courts below -- Marginal witnesses PW2 and PW3 had duly proved that after taking the amount, the defendant had executed Pronote Ex.P1 in favour of the plaintiff and Receipt Ex.P2 -- Defendant has not even denied his signatures on the Pronote and Receipt -- Defendant had not moved any complaint before any police authorities or any other higher authorities against the plaintiff for the alleged forgery and fabrication of the Pronote -- Very fact that the cousin of the appellant/ defendant is deposing against the appellant, would prove the case against the appellant -- Defendant led no evidence to prove the alleged forgery -- No ground is made out to interfere in the concurrent judgments and decrees of the learned Courts below -- Regular Second Appeal dismissed.

(Para 4-6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 20, 118 -- Suit for recovery – Pronote & Receipt – Proof of -- Plaintiff-respondent himself duly appeared in support of his case -- Both the attesting witnesses examined as PW2 and PW3 -- Scribe of pronote and receipt who is an Advocate as PW4, who duly asserted that on the instance of defendant he had scribed the original pronote and receipt and got it typed in the presence of the parties -- He further asserted that the same was read over to defendant and after admitting the same to be correct, he had signed in his presence as well as in presence of witnesses after receiving Rs. 12,00,000/- – Appellant-defendant not denying his signatures over the pronote and receipt – His claim is that plaintiff has forged the pronote and receipt – Mere oral self-serving statement of appellant-defendant is not sufficient to conclude and throw the evidence of plaintiff-respondent, attesting witnesses and scribe who in a consistent manner had asserted due execution of pronote and receipt by appellant-defendant.

(Para 10, 11)

B. Punjab Registration of Money Lenders Act, 1938 (3 of 1938), Section 8 – Recovery suit -- Personal loan – Friendly loan – Money lending Licence – Requirement of -- One single act of personal loan to friend, relatives or known person does not amount to money lending and no licence is required.

(Para 19)

Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 528 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Long pendency of cheque bounce complaint – Petition seeking direction to decide expeditiously – Complaint is pending since 2020 – Petition allowed, Ld. Additional Chief Judicial Magistrate directed to expedite the proceedings and conclude the proceedings as per law as expeditiously as possible without granting any unnecessary adjournment to the parties. Indian Bank Association’ case (2014) 5 SCC 590 relied.

(Para 1-5)

Bharatiya Sakshya Adhiniyam, 2023 (47 of 2023), Section 39(1) -- Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 121 – Pronote -- Forged and fabricated – Expert examination -- Defendant has taken twin stand that stamp paper as well as receipt stamp are forged one and had not been issued since 2009 and their use in year 2016 goes to prove that pronote is false and fabricated -- Petitioner has also disputed his signatures over agreement -- At the stage of collection of evidence, finding given by the learned trial Court that age of stamp paper and receipt stamp is of no consequence cannot be accepted – Entire evidence as desired by defendant be allowed at this stage and its effect shall be taken in consideration at the time of passing of final judgement.

(Para 3, 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 438, 442 -- Cheque bounce case -- Compromise after conviction at revision stage – Acquittal – Complainant and the petitioner have amicably resolved the matter -- Judgment of conviction and order of sentence passed by the learned trial Court, as affirmed by the learned Appellate Court set aside -- Petitioner/ accused acquitted of all the charges framed against him.

(Para 7-9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 145 – Indian Partnership Act, 1932 (9 of 1932), Section 25 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 200 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 – Cheque bounce complaint – Non-impleadment of Partnership firm as accused – Maintainability of Complaint against Partner – Vicarious liability/ Joint and several – Since the liability is joint and several, even in the absence of a partnership firm being proceeded against by the complainant by issuance of legal notice as mandated u/s 138 of the Act or being made an accused specifically in a complaint filed under Section 200 of CrPC, (equivalent to Section 223 of the BNSS), such a complaint is maintainable.

(Para 7.21, 9.9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 -- Cheque bounce complaint -- Offence by partnership firm – Partners personally, jointly and severally liable in the case of a partnership firm, when the offence has been proved against a partnership firm -- Partnership firm is only a compendious name for the partners of the firm, any offence committed u/s 138 read with Section 141 of the Act would make the partners of the firm jointly and severally liable with the firm.

(Para 9.10, 9.11)

C. Indian Partnership Act, 1932 (9 of 1932), Section 4, 5 -- Partnership firm – Whether a Separate Legal Personality -- A partnership firm, unlike a company registered under the Companies Act, does not possess a separate legal personality and the firm’s name is only a compendious reference for describing its partners -- This fundamental distinction between a firm and a company rests on the premise that the company is separate from its shareholders -- Even the registration of a firm does not mean that it becomes a distinct legal entity like a company -- Hence, the partners of a firm are co-owners of the property of the firm, unlike shareholders in a company who are not co-owners of the property of the company.

(Para 7.9, 7.10, 8)

D. Indian Partnership Act, 1932 (9 of 1932), Section 42 (c) -- Partnership firm and partners – Death of partner -- Perpetual Succession -- A partnership firm’s fundamental identity is contingent on the partners and undergoes a change with a change in partners, subject to contract -- Section 42(c) of the Partnership Act provides that subject to contract between the partners, a firm is dissolved by the death of a partner.

(Para 7.17)

E. Indian Partnership Act, 1932 (9 of 1932), Section 25, 26 -- Liability of Partners -- Liability of partners for the debts of the business is unlimited and they are jointly and severally liable for all business obligations of the partnership firm --  Any liability of a firm has the same effect of a liability against the partners -- Debt of the firm is the personal debt of a partner and the debt of the firm has to be incurred by each partner as a financial personal liability -- The liability of the firm for acts done by the partner would arise when such acts are done in the ordinary course of the business of the firm.

(Para 7.18-7.20, 7.22)

F. Indian Partnership Act, 1932 (9 of 1932), Section 25, 26 -- Liability of Partners – Penalty -- Since the firm by itself cannot transact any business, if a partner of the firm commits any breach, all the partners would become liable for the consequent penalties, just as the firm would be liable -- Further, if a penalty is imposed on a partnership firm for contravention of a statute, it amounts to levy of penalty on the partners also and there is no separate or independent penalty on the partners for the said contravention.

(Para 7.23)

G. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 145 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 – Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), Section 223 – Cheque bounce complaint – Liability of Directors, manager, Secretary and other officer -- Director, manager, secretary or other officer of the company cannot be proceeded against per se by virtue of the position they hold in the company but can be proceeded against only when there is proof that the offence u/s 138 was committed by the company with their consent or connivance or due to negligence on their part -- Standard of proof is higher under sub-section (2) of Section 141 vis-à-vis the category of persons mentioned therein with regard to their specific role in the commission of the offence u/s 138 of the Act.

(Para 9.4)

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

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

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

(Para 3, 4)

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

(Para 5, 6)

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

(Para 38)