2024 (5) TMI 613 - HC - Indian Laws

Section 138 conviction upheld for cheque dishonour but imprisonment sentence set aside while maintaining compensation order

The Calcutta HC upheld the conviction of the accused under Section 138 of the Negotiable Instruments Act for dishonour of cheque. The court found that the ... Dishonour of Cheque - conviction of accused - discharge of existing legal liability - in spite of notice being duly served the cheque amount was not paid by the appellant - HELD THAT:- This Court finds that the cheque in question was issued by the appellant herein in discharge of his existing legal liability which he could not successfully rebut. The demand notice has been duly served upon the accused/appellant and proved before the Trial Court and in spite of notice being duly served the cheque amount was not paid by the appellant herein - From the evidence on record, this Court finds that the learned Trial Court has considered the materials and the evidence on record in accordance with law and, as such, the said order of conviction being in accordance with law requires no interference by this Court. In Tedhi Singh vs Narayan Dass Mahant [2022 (3) TMI 797 - SUPREME COURT] the Supreme Court held 'we would think that in the totality of facts of this case the appellant has not established a case for interference with the finding of the Courts below that the offence under Section 138 N. I. Act stands committed by the appellant. We have been told that the amount of compensation in a sum of Rs.7 Lakhs which is relatable to the cheque amount has been deposited already in the Trial Court.' The judgment and order dated 18.03.2017 passed by the learned Additional District & Sessions Judge, (F.T.C. No. II) at Calcutta in Criminal Revision No. 01 of 2015 and the judgment and order of conviction and sentence passed by the learned Metropolitan Magistrate, 19th Court, Calcutta, dated 27.10.2014, in case no. C/16014/2011, convicting and sentencing the petitioner to suffer S.I. for one month and to pay Rs. 4,00,000/- to the complainant as compensation within three months in default to suffer simple imprisonment for a period of six months, is hereby modified - The substantive sentence to suffer S.I. for one month is set aside - Revision application disposed off. Issues Involved:1. Validity of conviction and sentence u/s 138 of the Negotiable Instrument Act, 1881.2. Appropriateness of the compensation awarded.3. Admissibility of evidence and procedural fairness.4. Legal interpretation of 'compensation' vs. 'fine.'Summary:1. Validity of Conviction and Sentence u/s 138 of the Negotiable Instrument Act, 1881:The petitioner was convicted and sentenced by the Learned 19th Metropolitan Magistrate, Calcutta, to suffer simple imprisonment (S.I.) for one month and pay compensation of Rs. 4,00,000/- to the complainant u/s 357(3) Cr.P.C., in default to suffer further S.I. for six months. The conviction was based on the dishonour of two cheques issued by the petitioner to the respondent, which were returned with the remark 'Account Closed.' This judgment was upheld by the Additional District & Sessions Judge, (F.T.C No. II) at Calcutta.2. Appropriateness of the Compensation Awarded:The petitioner argued that the compensation was not justified as it was not preceded by the imposition of any sentence. The court modified the sentence by setting aside the substantive sentence of one month S.I. and substituting the term 'compensation' with 'fine.' The court emphasized that the fine should not exceed twice the cheque amount, in line with Section 138 of the N.I. Act.3. Admissibility of Evidence and Procedural Fairness:The trial court considered the evidence, including the cheques, bank memos, demand notice, and other documents presented by the complainant. The petitioner failed to rebut the presumption of legal liability. The demand notice was duly served, and the petitioner did not pay the cheque amount, leading to the conviction.4. Legal Interpretation of 'Compensation' vs. 'Fine':The court examined various precedents and clarified that compensation u/s 357(3) Cr.P.C. is in addition to the sentence and not a substitute. The court cited judgments to support that compensation can only be awarded after determining the fine. The court modified the judgment to align with this interpretation, setting aside the substantive imprisonment and affirming the fine.Conclusion:The revisional application was disposed of with modifications to the original judgment. The substantive sentence of one month S.I. was set aside, and the term 'compensation' was substituted with 'fine.' The petitioner was directed to comply with the modified order within 30 days, failing which the trial court would proceed in accordance with the law. The petitioner's bail bonds were canceled, and all connected applications were disposed of.