Cheque-Bounce Not An Offence Against Society, Accused Can Escape Punishment By Compounding: P & H HC Reduces Imprisonment on Account Of Mitigating Factors [Read Order]

"Cheque bounce is not an offence against society and an accused can escape punishment by settling with the complainant", observed the Punjab and Haryana Court on Tuesday. The Single Bench expressed that in imposing a sentence under Section 138 of the Negotiable Instruments Act, while the Court must be alive to the concern of the Legislature in inserting Chapter XVII in the Act and then amending the provisions thereof to make the same more stringent as well as the jurisprudential principles of deterrence and restoration, the court cannot lose sight of the fact that the offence is "quasi criminal" in nature. The Court was of the view that the sentence imposed must be commensurate with the crime committed and in accordance with jurisprudential justification such as deterrence, retribution or restoration, and accordingly, mitigating circumstances as well as aggravating circumstances should also be kept in mind. The revision petitioner before Justice Sudhir Mittal was the accused, having issued a cheque dated 22.4.2006 to the complainant–respondent which was dishonoured. Once the notice demanding payment of the cheque amount was not responded to, the respondent filed a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complaint was dismissed and the petitioner was acquitted vide judgement dated 25.02.2014. However, appeal against the said judgement was allowed on 20.10.2015 and the case was remanded for a fresh decision. Post remand, vide judgement dated 8.7.2016, the petitioner was convicted and sentenced to undergo rigourous imprisonment for a period of two years. He was also directed to pay compensation equal to the cheque amount along with interest at the rate of 9% per annum from the date of cheque till the date of the judgement. Appeal against the aforementioned judgement of conviction was dismissed vide judgement dated 21.8.2019 leading to the filing of the present revision petition. To determine the jurisprudential justification/principle which would apply, Justice Mittal proceeded to examine certain statutory provisions: The Single Judge appreciated that Chapter XVII comprising Sections 138 to 142 was inserted vide Amendment Act 66 of 1988 w.e.f. 1.4.1989. Section 138, as it stood at the time of its insertion, provided for a maximum sentence of one year or fine or both. Vide amending Act 55 of 2002, the maximum sentence was increased to two years and Sections 143 to 147 were inserted. Section 143 provides for summary trial by the Judicial Magistrate, Ist Class or the Metropolitan Magistrate provided the maximum sentence of one year is imposable and fine exceeding Rs.5000/-. For speeding up the process of trial, Section 144 provides for service of summons by speed post or approved courier services. Section 145 provides for submission of evidence on affidavit. Section 143-A and 148 were inserted vide amending Act 20 of 2018 providing for award of interim compensation at the trial stage and for deposit of minimum 20% of the compensation amount awarded, at the appellate stage. "The amended provisions reveal the legislative intent of expediting the trial and of making the sentence deterrent", remarked the Single bench. Remarking that the concern of the Legislature is "obvious", Justice Mittal reflected that the provisions inserted for "inculcating greater faith in banking transactions" needed "more teeth" so that cases involving dishonour of cheques were reduced. "It is, thus, apparent that deterrence and restoration are the principles to be kept in mind for sentencing", concluded the bench, adding that at the same time, the Court cannot lose sight of the fact that the offence under Section 138 of the Act is quasi criminal in nature and that Section 147 of the Act makes the offence compoundable notwithstanding anything contained in the Code of Criminal Procedure, 1973. The bench considered that in the instant case, the maximum sentence of rigorous imprisonment for two years has been imposed on the ground that the offence is a socio economic offence and no other consideration has weighed with the trial. Besides, Keeping in view the principle of restoration, compensation of payment of the cheque amount along with interest @ 9% per annum from the date of issuance of cheque till the date of the judgment has been awarded. "The award of compensation is justified and reflects a judicious exercise of mind", said Justice Mittal. However, in view of the nature of the offence as well as the fact that the cheque amount is only Rs. 4 lacs, the award of maximum sentence is held to be arbitrary. "Mitigating circumstances argued by counsel for the petitioner such as the petitioner being a poor person and having undergone a protracted trial of almost 10 years, also exist", noted the bench. Thus, while maintaining the conviction, the High Court reduced the sentence to RI for a period of one year and six months along with payment of compensation as awarded by the trial Court....

Cheque-Bounce Not An Offence Against Society, Accused Can Escape Punishment By Compounding: P & H HC Reduces Imprisonment on Account Of Mitigating Factors [Read Order]

Mehal Jain

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