Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 438 -- Cheque bounce case – Conditional bail in Appeal subject to deposit 20% amount -- Non-payment of – Anticipatory bail – Maintainability of -- A person released on bail is already in constructive custody of law – Anticipatory bail is not maintainable. Manish Jain’s case 2022(1) SCC(Cri) 676 relied.

(Para 5-7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Presumption of legal enforceable liability – Rebuttal – Onus of proof -- Once the execution of cheque is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was for the discharge of any debt or other liability, however it is rebuttable presumption and the onus is on the accused to raise the probable defence -- Standard of proof for rebutting the presumption is that of preponderance of probabilities -- To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence -- Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

(Para 13)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Non-disclosure of loan amount in Income Tax Return (ITR) -- Trial Court found that the ITRs of the complainant did not disclose that he lent amount to the accused, and that the declared income was not sufficient to give loan of Rs.3 lakh -- Therefore, the case of the complainant that he had given a loan to the accused from his agricultural income was found to be unbelievable by the learned Trial Court – Trial Court acquitted however High Court convicted the appellant – Appeal allowed,  conviction set aside.

(Para 14-32)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint -- Quashing of Complaint -- Company not impleaded as party – Demand notice to wrong company – Cheque was issued in the capacity of an authorized signatory of BSR Health Ventures Private Limited and was not issued from a personal account -- However, the notice was issued and the complaint was filed against the Director of BSR Super Specialty Hospitals Ltd. – Held, since a wrong notice has been served and a wrong party has been made and further, the Company has also not been arrayed as an accused, the continuation of the criminal proceeding against the petitioner would amount to abuse of the process of law -- Criminal proceedings against the petitioner quashed.

(Para 9, 10)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque by company -- Vicarious liability of officer – Officer,  Non-signatory to cheque -- Pleadings as to role of Officer -- Specific averments must be made in the complaint itself highlighting the role of the said officer as to how he was either responsible for day-to-day affairs and conduct of business of the company or as to how and in what manner the officer was guilty of consent and connivance or negligence in the commission of the offence.

(Para 13)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque by company -- Vicarious liability of Chief Account officer – Officer,  Non-signatory to cheque -- Pleadings as to role of Officer -- Specific averments that, the petitioner persuaded the complainant to enter into the transaction with the Company by showing the financial position of the Company as well as making them believe in the capacity of the same to repay the debts -- Complainant has fulfilled the basic criteria of carving out the role of present petitioner in the complaint, for the commission of offence u/s 138 and 141 of NI Act.

(Para 13, 14)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque by company -- Vicarious liability of Chief Account officer – Company master data – Non-showing of resignation – Effect of -- In Company Master Data, the petitioner was a part of the Company on the date the alleged offence took place and when the complaint was filed before the learned Trial Court – Contentions of the petitioner that he had already resigned from the Company prior to dishonor of cheque – High Court in a petition u/s 482 Cr.P.C. cannot decide the genuineness of such records -- No case for quashing of complaint -- Petition dismissed.

(Para 15-17)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque by company -- Vicarious liability of Chief Account officer – Officer,  non-signatory to cheque -- Pleadings as to role of Officer – Specific averment that petitioner/ accused persuaded the complainant to enter into the transaction with the Company by showing the financial position of the Company as well as making them believe in the capacity of the same to repay the debts – Held, complainant has fulfilled the basic criteria of carving out the role of present petitioner in the complaint, for the commission of offence u/ss 138 and 141 of NI Act, 1881.

(Para 13, 14)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque by company -- Vicarious liability of Chief Account Officer – Resignation by Officer – Contention that petitioner had already resigned from the Company prior to dishonor of cheque and that his resignation was not accepted because of which his name continued to appear on the ROC records – Held, High Court in a petition u/s 482 Cr.P.C. cannot decide the genuineness of such records and these contentions of the petitioner can be raised and appropriately dealt with during the course of trial -- No case for quashing of complaint -- Petition dismissed.

(Para 14-17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Chhattisgarh Moneylenders Act, 1934 (13 of 1934), Section 11-H -- Code of Criminal Procedure, 1973 (2 of 1974), Section 251, 254, 482 -- Cheque bounce complaint – Challenge to order framing charge -- Contention that demand notice was never served on the petitioner; there is no legally enforceable debt; and the petitioner is under the category of money lender, therefore, the suit is barred under Section 11-H of the Chhattisgarh Money Lenders Act, 1934 – Held, defence taken by the petitioner/ accused may be seen during the trial -- Section 11-H of the Act, does not attract in the case -- Petition dismissed.

(Para 2-7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 256, 397 -- Complaint u/s 138 of N.I.Act – Dismiss in default – Revision -- Case was fixed for furnishing the complete particulars of the accused -- Summoning order had already been passed -- Accused had not put in appearance even once by that time -- Resorting to the step of axing down the complaint by dismissing it in default cannot be held to be a proper exercise of power envisaged under Section 256 Cr.P.C. -- Complaint restored by Ld. A.S.J in revision – Order upheld.

(Para 1, 13, 16)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 256, 397 -- Complaint u/s 138 of N.I.Act – Dismiss in default – Maintainability of revision -- Summoning order already passed -- Presence of the accused not secured by the date of dismissal of complaint in default, as he had not been served by that time – Held, discretion was not exercised by the Magistrate judiciously, fairly and without impairing the cause of administration of criminal justice in dismissing the complaint -- Revision in the facts and circumstances of the case, held maintainable.

(Para 15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Dismissed for want of prosecution – Petitioner/ complainant was continuously appearing before the Court, but on 08.08.2022, neither he nor his lawyer were present – Dismissal for want of prosecution should not have been done, instead another opportunity could have been granted to the petitioner for his appearance and the case should have been decided on merits -- Impugned order set-aside, Trial Court directed to proceed with the case after appearance of the complainant and the case shall be decided on merits in accordance with law.

(Para 1-6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 204 – Cheque bounce complaint – Cognizance by Magistrate -- Issue of process – Recalling of -- After completion of Section 204 of the Code of Criminal Procedure there is no provision for reverting back and question the taking of cognizance and dismissing the same.

(Para 1, 8, 9, 17)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cheque bounce complaint – Delay in complaint – Condonation of delay -- Ample power has been given by the legislature by inserting the provisions of Section 142 of the N.I. Act to protect the person who has given money from technicalities -- Proper explanation was given in the petition of complaint supported by medical papers which was overlooked by the Ld. Magistrate – Order passed by Ld. Judicial Magistrate set aside/quashed -- Criminal Proceedings in complaint restored -- Petitioner is permitted to file an application for condonation of delay before the trial court and if such an application is filed, the Trial Court shall be at liberty to consider the same on its own merits.

(Para 13-29)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque by Proprietorship firm – Complaint against Proprietor only – Amendment for impleading Proprietorship Firm as party/ accused allowed by Ld. Trial Court – Amendment upheld,  

-- firstly; the very factum of the petitioner not having even raised any objection or challenge to the complaint or the summoning order on the ground, either that petitioner was arraigned in individual capacity or that the proprietorship firm was not arraigned as an accused;

-- secondly, the application for impleading the proprietorship firm as an accused was soon after the summoning order was passed;

-- thirdly, the petitioner does not dispute her signatures on the cheque, as are also discernible therefrom, were on behalf of the proprietorship firm itself, raising the presumption under Sections 118 and 138 NI Act, though rebuttable by preponderance of probabilities;

-- fourthly, curable infirmities, can be cured by filing for amendment at any stage, which in the present case was right at the very outset of the proceedings.

-- Fifthly, and above all, the settled law being that in case of a proprietorship concern, the same would not come within the ambit of Section 141 of NI Act as it is only the sole proprietor, who is liable.

No illegality or perversity in the impugned order, the petition being sans merit, dismissed.

(Para 2, 23, 17-19)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Amendment of complaint u/s 138 of NI Act -- In the complaint, the date of cheque was mentioned as 22.07.2010 whereas as per the petitioner, the correct date of cheque is 22.07.2012 – If amendment of complaint is not permitted, it may prove fatal to the case of the complainant -- On account of clerical mistake substantial claim of the drawer may be defeated -- An accused cannot be let free just because there is some mistake on the part of complainant -- Mistake in question cannot be called as incurable mistake – Amendment allowed.

(Para 14-16)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 29, 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378 -- Cheque bounce complaint -- Son’s criminal liability – Appeal -- Accused is none other than the son of the deceased-father who borrowed the loan from the complainant and the accused agreed to repay the same and he has issued the cheque -- Such being the case, as a legal representative of the father, the accused is liable to repay the loan to the complainant – First Appellate Court not considered Section 29 of the N.I. Act and has erred in acquitting the accused -- Judgment of the First Appellate Court set aside -- Judgment of the trial Court convicting the respondent-accused upheld.

(Para 8-12)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 29, 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378 -- Cheque bounce complaint -- Son’s criminal liability – Time barred debt – Deceased father of accused borrowed loan in the year 2003, the cheque was issued by son after four years -- Accused once paid Rs.10,000/- by cash and subsequently, he issued a cheque to discharge the liability, he is liable for discharging his liability of his father -- Judgment of the trial Court convicting the respondent-accused upheld.

(Para 8-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce case – Quashing of FIR u/s 174-A IPC -- Complaint u/s 138 of the Act was compromised and the complaint stood dismissed as withdrawn – Held, continuation of proceedings u/s 174-A IPC shall be an abuse of process of law -- Petition allowed and FIR u/s 174-A IPC along with all the subsequent proceedings arising therefrom quashed.

(Para 8, 9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Cheque bounce complaint – Interim compensation – Discretion of Court -- Court trying a complaint for offence u/s 138 of NI Act has discretion to order the drawer of the cheque to pay interim compensation to the complainant -- Amount of compensation has not to exceed 20% of the amount of the cheque – Held, grant of interim compensation is a discretionary power and such order has to be based on reason and logic.

(Para 9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Cheque bounce complaint – Interim compensation – Discretion of Court -- No guidelines for grant of interim compensation have been laid down in Section 143-A of the NI Act -- it is a settled law that whenever a discretionary power is to be exercised by a Court, the same has to be exercised on well-recognized principles supported by reasons -- Court has to spell out the reasons for grant of interim compensation in favour of the complainant and it has also to justify in its order with reasons the quantum of interim compensation that is being awarded by him as the said quantum can vary from 1% to 20% of the cheque amount.

-- Some of the reasons for granting interim compensation may be that the accused absconds and avoids to appear before the Court despite service or there is overwhelming material on record to show that the accused is liable to pay an enforceable debt or that the accused is guilty of protracting the proceedings by avoiding to cross-examine the witnesses or producing his evidence.

(Para 10, 11)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 251 -- Cheque bounce complaint – Interim compensation – Discretion of court -- Reasoned order – Requirement of -- Magistrate is empowered to grant interim compensation in favour of a complainant ranging from 1% to 20% of the cheque amount -- Trial Magistrate has granted interim compensation in the maximum range of 20% without assigning any reason – Order impugned is devoid of any reasons and no discussion is made in the impugned order as to why interim compensation is being awarded – Ld. Magistrate has not dealt with the aspect of the matter relating to denial of execution of the cheque by the accused in his statement recorded u/s 251 of the Cr. P. C – Order is not sustainable in law, quashed.

(Para 14, 15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce case – Partnership firm not arrayed as an accused – Quashing of complaint u/s 138 of N. I. Act -- Cheque in question bears signature of the petitioner being authorized signatory of partnership firm -- The expression ‘company’ also includes a firm, as is provided in Explanation to Section 141 of the Act – There cannot be any vicarious liability of the partner of a partnership firm unless there is a prosecution against the partnership firm -- Thus, the complaint filed by the respondent is not maintainable and it is bad in law and entire proceedings in pursuance thereof are nothing but an abuse of process of the Court and are liable to the quashed -- Petition allowed and criminal complaint, summoning order and the order passed by the Revisional Court and all the subsequent proceedings arising therefrom quashed.

(Para 11-18)

Code of Criminal Procedure, 1973 (2 of 1974), Section 311 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Indian Evidence Act, 1872 (1 of 1872), Section 54 -- Cheque bounce case – Additional evidence -- Certified copy of judgment of previous conviction -- Evidence showing any previous conviction is also relevant as evidence of bad character -- Thus the evidence relating to previous conviction (past actions of a person) in a case of similar nature would be relevant -- However, the evidentiary value of the same would be evaluated by the ld. trial Court at the time of final disposal of a case – No prejudice would be caused to the accused if the aforesaid judgment is taken on record as the petitioner would get an opportunity to rebut the same – Impugned order in allowing application u/s 311 Cr.P.C. not suffering from illegality and infirmity – No interfere is called for.

(Para 11,12)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 147 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce case -- Compounding of offence – Consent of complainant – Requirement of -- Section 147 of NI Act coupled with inherent power of the High Court u/s 482 Cr.P.C., in the interest of justice, High Court is not precluded from compounding the case in absence of consent of complainant where complainant is duly compensated as Section 138 of the NI Act does not provide that it is mandatory for the Court to sentence for imprisonment in all eventualities but there is option to the Court to impose sentence of imprisonment or fine or both.

(Para 9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 147 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce case -- Compounding of offence – No-consent case -- Petitioner is 52% handicapped and has deposited in the Court 10% over and above the amount of compensation – Held, complainant has been compensated adequately and therefore, substantive sentence of imprisonment is not necessary -- Accordingly complaint filed by the respondent compounded, impugned judgments/ orders set-aside and petitioner acquitted of the offence charged.

(Para 9-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143 – Code of Criminal Procedure, 1973 (2 of 1974), Section 397, 401 -- Cheque bounce complaint – Summary case – Regular trial – Specific order of Magistrate – Requirement of -- When the evidence of the parties, in the chief examination, cross-examination and re-examination (if any) were recorded in verbatim and was faithfully placed on record then for merely not recording the order observing that the matter would be tried as a summons case or as a regular trial would not itself vitiate the trial conducted by the Magistrate of the Trial Court, when it has not resulted in miscarriage of justice – Ld. Sessions Judge’s Court only on technicalities set aside the judgment passed by the Trial Court and ordered for a de-novo trial -- Sessions Judge's Court ought to have decided the appeal before it on its merit – Revision allowed, judgment passed by ld. ASJ set aside, matter remanded to ld. ASJ for its fresh disposal, in accordance with law.

(Para 18)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Acquittal – Appeal – Burden of proof -- Burden not only lies on the complainant (just like on prosecution in criminal trial), but it also lies on the accused -- So, it cannot be said that there is limited scope for interference in the judgment of acquittal particularly, when it is for the offence punishable under Section 138 of the Negotiable Instrument Act.

(Para 9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 20 -- Cheque – Requirement of Stamp -- Section 20 of the Negotiable Instrument Act talks about giving the authority to the holder to make inchoate stamped instrument complete -- Even though the cheque is negotiable instrument, it does not require stamp.

(Para 25)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 87, 138 – Cheque bounce case – Maintainability of complaint u/s 138 of NI Act -- Security cheque – Material alteration -- Unilateral putting dates on cheques – Complainant unilaterally has put in dates on the cheques without the authority of the accused and even by not informing him -- So, it amounts to material alterations -- If it is so such negotiable instrument becomes void -- Hence prosecution under Section 138 of the Negotiable Instrument Act cannot be initiated.

(Para 27-32)

Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cheque bounce case -- Quashing of order declaring accused proclaimed person – Submitted that the petitioner was never served with the summons and has now come to know about the pendency of the complaint and he is ready to surrender before the trial Court and face the trial -- Issuance of notice of motion to respondents dispensed with, petition allowed, impugned order declaring the petitioner a proclaimed persons, set aside -- Petitioner directed to appear before the trial Court within a period of 15 days and on doing so, the trial Court will release him on bail -- Till then arrest stayed.

(Para 1-5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Cheque by Trust -- Trust not impleaded as party in complaint u/s 138 of N.I. Act -- Maintainability of the complaint – Petitioner is admittedly neither the signatory of the cheque nor is there any averment made by the complainant in the complaint that the petitioner was in-charge of and was responsible to the trust for the conduct of its business -- Mandate of Section 141 of NI Act not pleaded and established remotely -- Further proceeding in the complaint is nothing but an abuse of process of Court –Complaint as a whole being unsustainable in the eye of law needs to be quashed and accordingly quashed.

(Para 6-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A -- Cheque bounce case – Conditional bail by Trial Court with deposit of interim compensation of 20% of cheque amount -- Section 143A of Act, 1881 was introduced w.e.f. 01.09.2018 – Submission that entire process of filing complaint took place prior to insertion of Section 143A of N.I Act and Section 143A of N.I. Act is not retrospective in nature – Issue involved in the present petition is squarely covered by judgment of Hon'ble Supreme Court in G.J. Raja’s case 2019(19) SCC 469 -- Impugned order qua imposition of condition of payment of interim compensation while granting bail quashed.

(Para 1-5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138, 139 – Cheque bounce complaint -- Presumption – Rebuttal of presumption -- Since there is no denial on the part of accused with regard to issuance of cheque and signatures thereupon, it can be presumed that the same was issued by the accused in discharge of lawful liability, as such, presumption under Ss. 118 and 139 of the Act comes into play in favour of the complainant -- Accused miserably failed to raise probable defence much less sufficient to rebut the presumption applicable in favour of the complainant under Section 118 and 139 of the Act -- Complainant successfully proved all the ingredients of S. 138 and as such, learned courts below had no option but to pass the judgments of conviction and order of sentence.

(Para 14)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 397 – Conviction u/s 138 NI Act – Revisional jurisdiction -- High Court has a very limited jurisdiction u/s 397 of the Cr.PC, to re-appreciate the evidence, especially, in view of the concurrent findings of fact and law recorded by the courts below.

(Para 14)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Compromise/ Compounding after conviction -- Parties have settled the dispute and complainant had accepted the sum towards the full and final settlement of the cheque, on the satisfaction of the complainant -- Sentence awarded to the petitioner for offence u/s 138 of NI Act is liable to be set aside -- Petitioner directed to pay a cost of Rs.10,000/- -- Conviction and sentence of imprisonment set aside on the basis of compromise.

(Para 5, 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Cheque bounce case – Admission of signatures on cheque -- Presumption of legally enforceable debt -- Petitioner/accused has not been able to disown the factum of issuance of cheques in favour of the complainant and nor has come out with any convincing explanation as regards the reasons for which the said cheques were issued by him -- Once the signatures of the petitioner on the cheques in question are not disputed, a presumption can safely be drawn in favour of the holder as regards the existence of a legally enforceable debt.

(Para 9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Code of Criminal Procedure, 1973 (2 of 1974), Section 401 – Conviction u/s 138 of N.I. Act -- Compounding at revisional stage – Waiver of 15% cost -- Petitioner is stated to be a Class IV employee and his whole family including his wife and children are completely dependent upon him and the poor status of the financial condition of the petitioner is apparent from the fact that the complainant agreed to accept Rs.3.70 lacs instead of the cheque amount of Rs.4 lacs, as the full and final settlement in the year 2022 -- In view of the said special circumstances, the petitioner exempted from depositing the costs amounting to 15%.

(Para 15)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Conviction u/s 138 of N.I. Act -- Compounding at revisional stage – Setting aside of conviction – It is settled law that High Court has the power to set aside the judgement of conviction against the petitioner on the basis of a valid compromise -- Compromise is genuine and valid -- Judgment of conviction and sentence set aside and the petitioner acquitted of the charges framed against him.

(Para 16-17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Illegal activity -- Acquittal of accused – Leave to appeal – Ld. Trial Court dismissed the complaint as Rs.3 lakhs paid to respondent/accused for getting job in the Department of Railway which is a Government Department as it was for illegal activities and it cannot be called as legally enforceable liability -- No infirmity or irregularity in the impugned order whereby trial Court has acquitted the respondent -- Leave to appeal rejected.

(Para 3-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 374, 401 -- Conviction of accused by trial court – Ex-parte dismissal of appeal --  Held, impugned order has been passed in the absence of the petitioner and her counsel which amounts to violation of principles of natural justice; the matter directly relates to life and liberty of the applicant-petitioner, thus, it would be travesty of justice and violation of principles of natural justice -- Impugned order passed by the ld. ASJ set aside -- Petitioner directed to be present before the Appellate Court on 21.11.2022, no adjournment shall be granted and ld. ASJ, shall hear and decide the appeal on the date fixed.

(Para 3-7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 311 -- Summoning of Clerk/ bank official with records of cheque – Diet money already stands deposited by the petitioner -- No force in the finding recorded by the court below that the application is to fulfill the lacuna in the light of the fact that application u/s 311 CrPC was made much prior in time before closing of the evidence by the petitioner – Case is fixed for defence evidence, in that eventuality if the application u/s Section 311 CrPC is allowed, no prejudice is going to be caused to the parties and rather, it would be in the interest of justice to provide one opportunity -- One opportunity granted subject to cost of Rs.10,000/-.

(Para 6-9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Income Tax Act, 1961 (43 of 1961), Section 269 SS – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Acquittal of accused – Leave to appeal -- Rs. 5 lac payment in cash -- Financial capacity of the appellant to pay Rs.5 lakhs was doubtful, the entire payment was made in cash, Section 269 SS of Income Tax Act prohibits acceptance of deposit/loan in cash in excess of Rs.20,000/, different pen was used to sign and fill columns of cheque and no document was executed at the time of alleged payment of Rs.5 lakhs in cash – Trial court acquitted the accused -- Leave to appeal rejected.

(Para 10)

Negotiable Instruments Act, 1881 (26 of 1881) , Section 138 -- Indian Evidence Act, 1872 (1 of 1872), Section 137 – Cheque bounce case -- Closing of cross-examination -- Trial Court closed the cross examination of CW-1 without taking note of the absence of the lawyer for the petitioners – Stated that non-appearance was due to demise of father of petitioners' counsel and this fact was also brought to the notice of the concerned Court -- Order set aside and parties permitted to appear before the trial Court subject to the condition that the petitioners shall not seek any further adjournment.

(Para 2-4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 311, 482 – Cheque bounce case – Additional documents by complainant – Petitioner/ complainant moved an application u/s 311 Cr.P.C. for leading further evidence by producing additional documents -- No doubt, the complainant had already closed the evidence -- Purpose of trial is to elicit truth -- Trial should not be fair only to the accused but it should also be fair to the complainant/prosecution -- Petitioner permitted to lead the evidence by way of additional documents.

(Para 1-5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 2(wa) – Dishonour of cheque -- Complainant – Victim -- A complainant in a case U/s 138 of Negotiable Instrument Act is not a victim as defined U/s 2(wa) of Cr.P.C.

(Para 19)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 372, 378(4) – Cheque bounce complaint – Acquittal – Appeal -- A complainant in a case U/s 138 of NI Act is not entitled to file an appeal against acquittal according to the provision of Section 372 of Cr.P.C rather he may prefer an appeal before the Hon’ble High Court invoking the provision of Section 378(4) of the Cr.P.C.

(Para 19)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Civil Procedure, 1908 (V of 1908), Section 60(1)(i), Order 21 -- Award of Lok Adalat in complaint u/s 138 NI Act – Execution of award/ decree -- Attachment of salary -- Salary of the JD-respondent cannot be attached for a period of more than 24 months where such attachment is made in execution of one and the same decree -- Argument of DH-petitioner that the salary should be continued to be attached cannot be accepted in view of the clear provisions of Section 60(1)(i) of CPC.

(Para 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Civil Procedure, 1908 (V of 1908), Section 55 Order 21 Rule 30  -- Award of Lok Adalat in complaint u/s 138 NI Act – Execution of award/ decree – Arrest of Judgment Debtor/ JD -- Argument that the JD-respondent ought to be arrested for non-compliance of the order passed by the Permanent Lok Adalat cannot be accepted in view of the fact that arrest would be a measure of last resort and in the case, some property of the JD-respondent already stands attached and the Executing Court has directed the JD-respondent to file an affidavit stating all the particulars regarding his moveable and immoveable properties.

(Para 7)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Civil Procedure, 1908 (V of 1908), Order 21 – Cheque bounce case -- Award of Lok Adalat in complaint u/s 138 NI Act – Execution of award -- Award passed by the Lok Adalat would be deemed to be a decree of the Civil Court executable by the Civil Court -- There can be no quarrel with the said proposition of law.

(Para 10)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce complaint -- Cause of action – Demand Notice – Presumption of service -- Incorrect address -- Mere issuance of notice would not by itself give rise to a cause of action, same would arise only when the notice has been communicated to the drawer of the cheque and who fails to liquidate the cheque amount within the stipulated period -- Presumption of receipt of notice by drawer of the cheque can be raised only if the notice has been dispatched through registered post, to his correct address and such inference cannot be drawn if the notice has been sent on the incorrect address of the drawer of the cheque.

(Para 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint – Quashing of – Demand Notice – Service of – Ground of -- Whether the notice of demand has been actually received by the petitioner/accused can be determined only during the trial of the case -- Argument that the impugned complaint deserves to be quashed on the aforesaid ground is, therefore, without any merit.

(Para 11)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint – Quashing of -- Cognizance by Magistrate – Wrong mentioning of particulars of cheques and Memos -- Errors made by the ld. trial Magistrate in recording the particulars of the cheques and the memos cannot be termed as typographical in nature -- These errors are relating to essential aspects of the case and the same clearly reflects that the learned trial Magistrate, while passing the impugned order, has approached the case in a mechanical and negligent manner -- Impugned order passed by the learned trial Magistrate clearly reflects non-application of mind on his part and, as such, is not sustainable in law -- Impugned order, set aside and the case is remanded to the learned trial Court with a direction to pass a fresh order of cognizance on the basis of the material available before him after hearing the complainant/ respondent.

(Para 13-16)

Indian Penal Code, 1860 (45 of 1860), Section 174-A (Section 420, 406, 506, 120-B) – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce case – Cheating -- Quashing of FIR u/s 174-A of IPC -- Since the matter has been settled between the parties and the petitioners have been acquitted in the proceedings u/s 138 of the N.I. Act and also in FIR u/s 420, 406, 506, 120-B IPC, no fruitful purpose would be served in continuing the proceedings under Section 174-A of IPC -- Petition allowed and the FIR u/s 174-A of IPC and all subsequent proceedings arising therefrom quashed.

(Para 10,11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Cheque bounce case -- Interim compensation – Nature of Section 143-A of N.I. Act – Opportunity of hearing -- No application moved by the respondent/ complainant u/s 143-A N.I. Act and no opportunity of hearing was given to the petitioner/ accused before direction was given to the petitioner to pay the interim compensation – Trial Court granted interim compensation in a mechanical manner and without application of mind as to how the said compensation was calculated and awarded -- Trial Court misread the provision of Section 143-A of Negotiable Instruments Act and treated the said provision as mandatory in nature, whereas the legal position is otherwise – Impugned orders are liable to be set aside -- Petition allowed, matter remanded back to learned Trial Court to dispose of the matter regarding grant of interim compensation to the complainant/respondent, in accordance with law within one month.

(Para 7-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque by husband – Quashing of complaint -- Maintainability of complaint u/s 138 of NI Act against wife/ petitioner – Cheque not from joint account -- The three accused do not constitute a Company or a firm or Association of individuals as contemplated u/s 141 of N.I. Act -- Hence, petitioner cannot be made accused for dishonor of the cheque issued by her husband and he alone can be prosecuted for the same – Proceedings qua petitioner/ wife quashed.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 205, 406 -- Complaint u/s 138 of NI Act – Transfer of complaint – Exemption form appearance -- Complaint cannot be transferred as per the convenience of the accused -- Petitioner is a woman and a senior citizen, therefore, she can always seek exemption from personal appearance -- If an application is made by the petitioner for grant of exemption, the learned trial Judge shall favorably consider the same -- Trial Judge shall compel the petitioner to appear only when her presence is absolutely mandatory for the conduct of the trial – Transfer petition dismissed.

(Para 2)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 406 -- Transfer of complaint u/s 138 of NI Act --  West Bengal to Kerala -- Petitioner states that the entire transaction of loan, for which the cheque was alleged to have been issued, had taken place at Calicut, Kerala – Jurisdiction of the Magistrate's Court at Calcutta (Kolkata), West Bengal is invoked as the cheque was presented in a Bank, which was within the jurisdiction of that Court – In such circumstances, it would be expedient for the ends of justice to transfer the complaint to the Court at Kerala – Petition allowed.

(Para 2-7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Cheque bounce case – Conviction u/s 138 of N.I. Act – Compounding of offence after conviction -- Compromise after 10 years of litigation -- Three different Courts in hierarchy upholding conviction -- A sum of Rs.69 lakhs paid to the complainant and he does not want to proceed against the petitioner any further – Held, mere compromise entered into by the parties may not be sufficient to close the proceedings -- Looking to the quantification of default amount, an additional sum of Rs. 5 lakhs ordered to be deposited by the petitioner with the Supreme Court Advocate-on-Record Advocates Welfare Fund within a period of two months.

(Para 3)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Conviction u/s 138 of NI Act – Reduction in sentence – Cheque amount was Rs.70,000/- -- Sentence was to pay twice the amount of cheque and to suffer imprisonment for one month -- Amount of fine of Rs.1,40,000/- paid, sentence modified to Rs.1,40,000/- apart from the litigation expenses of Rs.50,000/- by setting aside the order of imprisonment for one month.

(Para 1-3

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint – Quashing of -- Goods purchased by petitioner and cheque was also issued by him – Change in management by agreement and previous liability taken over by someone – Petitioner seeking quashing on the ground of change in management – Held, shifting of liability after issuance of the cheque has no significance, since penal provisions would attack against the person who issued the cheque -- Petition dismissed.

(Para 3-7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Loan account -- Security/ post-dated cheque – (i) Where the borrower agrees to repay the loan within a specified timeline and issues a cheque for security but defaults in repaying the loan within the timeline, the cheque matures for presentation. When the cheque is sought to be encashed by the debtor and is dishonoured, Section 138 of the Act will be attracted; (ii) However, the cardinal rule when a cheque is issued for security is that between the date on which the cheque is drawn to the date on which the cheque matures, the loan could be repaid through any other mode. It is only where the loan is not repaid through any other mode within the due date that the cheque would mature for presentation; and (iii) If the loan has been discharged before the due date or if there is an ‘altered situation’, then the cheque shall not be presented for encashment.

(Para 12)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Security/ post-dated cheque – Interpretation of Section 138 of N.I. Act -- Interpretation must not permit dishonesty of the drawee of the cheque as well -- Though a post-dated cheque might be drawn to represent a legally enforceable debt at the time of its drawing, for the offence to be attracted, the cheque must represent a legally enforceable debt at the time of encashment -- If there has been a material change in the circumstance such that the sum in the cheque does not represent a legally enforceable debt at the time of maturity or encashment, then the offence u/s 138 is not made out.

(Para 16)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 15, 56, 138 – Cheque bounce case – Legal enforceable liability – Security/ post-dated cheque – Part payment – Endorsement on cheque – Requirement of -- Section 56 stipulates that if there is an endorsement on a negotiable instrument that a part of the sum mentioned in the cheque has been paid, then the instrument may be negotiated for the balance -- If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138 -- Cheque cannot be presented for encashment without recording the part payment -- If the unendorsed cheque is dishonoured on presentation, the offence u/s 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment.

(Para 29)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 56, 138 – Cheque bounce case – Security/ post-dated cheque – Part payment – Endorsement of – Requirement of -- (i) For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation; (ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque; (iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any -- If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;

(Para 30)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 406 -- Transfer of complaint u/s 138 of NI Act -- Complaints in Punjab, Chhattisgarh and Rajasthan -- Case of the petitioner that the complaints have been filed u/s 138 at different places by the respondents who are total strangers -- According to her, it is an offshoot of a matrimonial dispute and it is her case that the complaints have been orchestrated by her husband – Cases transferred to the competent Court at New Delhi.

(Para 6-8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case -- Legal presumption u/s 118 and 139 of NI Act – Time barred debt – Quashing of summoning order -- Once a cheque is issued and upon getting dishonoured a statutory notice is issued, it is for the accused to dislodge the legal presumption available u/s 118 and 139 reply of the N.I. Act -- Whether the cheque in question had been issued for a time barred debt or not, itself prima facie, is a matter of evidence and could not have been adjudicated in an application filed by the accused u/s Section 482 of the CrPC.

(Para 8)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque bounce case – Proprietorship firm not made party – Effect of – In proceeding u/s 138 of N.I.Act, the arraying of a proprietor as an accused or a proprietary concern represented by the proprietor would be sufficient compliance with the requirements u/s 138 of N.I.Act, the proprietor and the proprietary concern is not required to be separately arrayed as a party accused.

(Para 11-11.6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque bounce case – Complaint/ evidence through power of attorney – Permissibility of -- A power of attorney could file a complaint, could depose to an affidavit as also record his sworn statement in a proceedings u/s 138 of N.I.Act.

(Para 12-12.6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 406 -- Supreme Court Rules, 2013, Order XXXIX – Transfer of complaint u/s 138 of NI Act – Bangalore to Delhi – Case of the petitioners that they have to first go to Delhi and then travel to the said place where the trial is currently being held and they would have to bring their witnesses, on the other hand, respondent has a corporate office at New Delhi – Held, interest of justice would be subserved if the cases are transferred to the competent Court in New Delhi -- Cases transferred from Bangalore to Delhi.

(Para 2-7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 311 – Cheque bounce case –  Additional evidence -- Section 311 can be exercised at any stage of the trial -- Only test prescribed as to whether such evidence which is being sought to be produced by resorting to Section 311 of the Code is essential to the just decision of the case or not – Trial Court has not given any finding as such – Impugned order set aside, Trial Court directed to decide the application afresh by testing the application on the touchstone of 'whether the evidence sought to be produced is essential for the just decision of the case or not'.

(Para 11,12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 145(1) – Affidavit of accused in evidence -- Permissibility of -- An offence u/s 138 of the Act of 1881 is in the nature of a civil wrong which has been accorded criminal overtones – Application preferred by the petitioner to exhibit evidence in the form of an affidavit allowed – Ld. Court below shall admit the affidavit of the petitioner, on the record, and the same shall be treated as the statement of the petitioner.

(Para 1, 14-16)