Comment :
In Damodar S. Prabhu Vs. SayedBabalal H., 2010(2) RCR (Criminal) 851 (SC) it was held by Hon’ble Supreme Court that if parties compound the offence in trial court accused will have to pay 10% of cheque amount as the cost of compounding. Cost of compounding will be 15% in High Court and 20% in Supreme Court.
However, in Madhya Pradesh State Legal Services Authority vs. Prateek Jain and another, 2014(4) RCR (Criminal) 178 (SC) it was held by the Hon’ble Supreme Court that where settlement is made in Lok Adalat, the Lok Adalat can waive the same for reasons to be recorded.
Compensation
Whether when compensation is ordered as payable for an offence committed under Section 138 of the Negotiable Instruments Act, and in default thereof, a jail sentence is prescribed and undergone, is compensation still recoverable. [Yes]
The accused was found guilty of the offence -The accused challenged the aforesaid judgment before the Court of Sessions, and the Appellate Court, confirmed the conviction, but reduced the sentence to imprisonment till rising of the Court. The order to pay compensation with the default clause was, however, sustained. The accused underwent imprisonment till the rising of the Court and also underwent the default sentence for non-payment of compensation.The second respondent filed CMP No.2018 of 2008 before the learned Judicial Magistrate under Section 421 of the Criminal Procedure Code for realising compensation by issuing a distress warrant against the accused. This CMP was allowed on 19th July 2008, and a distress warrant for the realisation of compensation was issued. The High Court, by the impugned judgment dated 8 th August 2012, held that despite the fact that the default sentence was undergone, yet, under the provisions of the Code of Criminal Procedure, compensation was recoverable- HELD-The deeming provision in Section 431 will apply to Section 421(1) as well, despite the fact that the last part of the proviso to Section 421(1) makes a reference only to an order for payment of expenses or compensation out of a fine, which would necessarily refer only to Section 357(1) and not 357(3). Despite this being so, so long as compensation has been directed to be paid, albeit under Section 357(3), Section 431, Section 70 IPC and Section 421(1) proviso would make it clear that by a legal fiction, even though a default sentence has been suffered, yet, compensation would be recoverable in the manner provided under Section 421(1). This would, however, be without the necessity for recording any special reasons. This is because Section 421(1) proviso contains the disjunctive “or” following the recommendation of the Law Commission, that the proviso to old Section 386(1) should not be a bar to the issue of a warrant for levy of fine, even when a sentence of imprisonment for default has been fully undergone.[Kumaran Versus State of Kerala & Anr.-2017]
Post-dated Cheque
Whether the post-dated cheques issued by the appellants (hereinafter referred to as ‘purchasers’) as an advance payment in respect of purchase orders could be considered in discharge of legally enforceable debt or other liability, and, if so, whether the dishonour of such cheques amounts to an offence under Section 138 of the Negotiable Instruments Act, 1881?
In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability [M/s. Indus Airways Pvt. Ltd. & Ors. Versus M/s. Magnum Aviation Pvt. Ltd. & Anr. … Respondents 2014]
Territorial Jurisdiction of Trial court
Courts at Gurgaon have no jurisdiction to entertain the complaint specially when the cheque in question was issued and dishonoured at Bangalore and the offence, if any, was committed only at Bangalore. Issue of statutory notices to the petitioners from Gurgaon also does not confer jurisdiction upon the Courts concerned or justify continuance of the proceedings at Gurgaon. Reliance was made on Dashrath Rupsingh Rathod v. State of Maharashtra & Anr. Criminal Appeal and Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) 3 SCC 609.[Sree Mahesh Stationaries & Anr. Vs. Indiabulls Financial Services Ltd. – 2014 ]
Connected :
- Bankers’ Books Evidence Act, 1891 [As amended by the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002]
- Agreements controlling negotiable instruments
- Payment by bills, notes and cheques
- Suits on negotiable instruments
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Negotiable Instrument Act 1881