Accused In Cheque Bounce Cases Should Not Be Equated With Those Convicted Under Other Penal Statutes: Karnataka High Court

The Karnataka High Court recently observed that an accused who has suffered an order of conviction in a prosecution under Section 138 of the Negotiable Instruments Act pertaining to cheque dishonour, should not be equated with that of an accused who has been convicted for other penal statutes.Justice V Srishananda held thus while setting aside the six-month imprisonment handed down to one Sushil Kumar Churiwala by the trial court along with payment of fine while "maintaining the order of conviction"."From the directions of Hon'ble Apex Court in the case of Indian Bank Association supra, it is clear that the prosecution under Section 138 of the Negotiable Instruments Act is in the nature of quasi civil and quasi criminal in nature. Therefore, the Courts while exercising its discretion at the time of passing the appropriate sentence in a given case, is entitled to use its discretionary power in awarding imprisonment or fine or with both. At any rate, an accused who has suffered an order of conviction in a prosecution under Section 138 of the Negotiable Instruments Act, should not be equated with that of a accused who has been convicted for other penal statutes," the court said. The petitioner was convicted and he contended that before the deposit of compensation amount as directed by the trial court could be made, he was arrested pursuant to the warrant issued by the learned Trial Magistrate and sent to the judicial custody on 02.08.2022. He was ordered to be released on 10.08.2022 passed by this Court. Thereafter, he was actually released from custody on 15.08.2022. Thus he pleaded for modification of the order of conviction in respect of a sentence of six months imprisonment ordered by the Trial Magistrate and to waive the sum of Rs.10,000/- which has been ordered to be paid as defraying expenses of the state.The respondent opposed the plea submitting that since the Act contemplates the imposition of fine and imprisonment or imprisonment or both, in a given case even without filing the revision petition insofar as the inadequacy of the compensation amount, the complainant can support the order of the learned Trial Magistrate insofar as imprisonment portion is concerned and therefore, revision petition needs to be dismissed.Further, since the amount in a sum of Rs.22,00,000/- is paid over a period of time, taking note of the object of the Negotiable Instrument Act in allowing double the fine amount as the compensation amount and the imprisonment also being contemplated, the compensation amount needs enhancement in case the revision petitioner wants to get the imprisonment set aside.Findings: The bench noted that the framers of legislation in Section 138 itself accorded the discretion for the learned Trial Magistrate to impose double the cheque amount as the fine or imprisonment for a maximum period of two years or both. Then it opined “Perhaps when the legislature incorporated Section 138 into the Negotiable Instruments Act, it did not envisage that enormous amount of litigation would mount over a period of time wherein Courts are burdened with the pendency of private complaints filed under Section 138 of the Negotiable Instruments Act.” The high court referred to the Supreme Court's decision in Indian Bank Association & Ors v. Union of India & Ors (2014), as well as suo motu PIL registered by the apex court where it passed an order on April 16, 2021, setting out directions for the formulation of guidelines for disposal of the criminal prosecutions under Section 138 NI Act. The high court thereafter said, “Criminal courts across the country are required to exercise a different mindset while dealing with the criminal prosecution under Section 138 of the Negotiable Instruments Act.” Further, it said “This Court though sitting in the revisional jurisdiction, while appreciating the grounds urged on behalf of the accused/revision petitioner can very well exercise its power to the sole factor namely whether in a given case, sentence ordered is appropriate sentence or not. Even though the revisional powers are limited, Court enjoys the ample power in ordering an appropriate sentence as the lis is continued in this revision as well.” Accordingly while allowing the petition in part the court said, “When the factual aspects of the present case are analyzed since the accused/revision petitioner has already compiled the payment of entire compensation amount of Rs.22,00,000/- as referred to supra and was in custody from 02.08.2022 to 15.08.2022, this Court is of the considered opinion that six months imprisonment ordered by the learned Trial Magistrate, in addition to the payment of the compensation amount needs to be set aside.” Appearance: Advocate Hemachandra R Rai for Advocate Nehru M N for Petitioner.Advocate Brijesh Edupuganti, for Advocate Ramakrishnan S, for Respondent. Citation No: 2025 LiveLaw (Kar) 33Case Title: Sushil Kumar Churiwala AND Akshay Bansal Case No: CRIMINAL REVISION PETITION NO. 1043 OF...

Accused In Cheque Bounce Cases Should Not Be Equated With Those Convicted Under Other Penal Statutes: Karnataka High Court

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