Compensation under Section 138 of the Negotiable Instruments Act must be proportionate to the dishonoured cheque amount and not punitive for delays in resolution.

ORDER :

1. The present criminal appeal has been filed by the accused appellant Ganga Ram Dani against the order dated 20.09.2021 passed by learned Sessions Judge, Pali in Criminal Appeal No. 33/2017 whereby, the appellate Court partly allowed the appeal filed by the respondent no.2 and while modifying the order dated 29.09.2016 passed by Special Judicial Magistrate (N.I. Act cases), Pali, enhanced the amount of compensation from Rs. 1,10,000/-to Rs.2,00,000/-.

2. Brief facts of the case are that the respondent complainant lodged a complaint under Section 138 of the Negotiable Instruments Act, against the appellant, whereupon a case bearing Criminal Case No. 1237/2015 came to be registered against him before the learned Special Judicial Magistrate (N.I. Act Cases), Pali. After due course of trial, the learned trial court convicted the appellant for offence under Section 138 of N.I. Act vide judgment dated 29.09.2016 but instead of imprisonment, the learned court granted benefit of probation under Section 4(1) of Probation of Offenders Act and directed the appellant to submit bail bonds in the sum of Rs. 10,000/- to keep peace and good behaviour for a period of one year and further ordered to pay compensation in the sum of Rs. 1,10,000/- to the complainant as per Section 5 of the Act.

3. Feeling aggrieved, the complainant respondent filed an appeal before the court of Sessions Judge, Pali, who partly allowed the appeal and modified the order dated 29.09.2016 to the extent that the appellant shall pay enhanced compensation of Rs. 2,00,000/- i.e. double the amount of cheque, to the complainant instead of Rs.1,10,000/-. Hence, this appeal.

4. Learned counsel for the appellant argued that the appellate court has committed grave error of law in enhancing the amount of compensation awarded by the trial court. It is argued that the appellant had deposited a cheque in the sum of Rs. 1,00,000/- to be given to complainant way back in the year 2012 but the respondent refused to accept the same. After passing of the order dated 29.09.2016 by the trial court, the appellant had deposited cheque in the sum of Rs. 10,000/- before the trial court but the same is still lying before the trial court. It is argued that the appellant had made efforts to reconcile and settle the dispute in the spirit of Lok Adalat but the complainant respondent was bent upon harassing the appellant and now the appellate court has doubled the amount of compensation which is onerous. It is submitted that the appellant was ready and willing to settle the dispute in the year 2012 itself and as per settled proposition of law, if an application for compounding is made by the accused, the compounding can be done by paying 10-15% of the cheque amount, therefore, the appellate court was not justified in awarding compensation of double the amount of cheque, in favour of the complainant. Therefore, the impugned order dated 20.09.2021 may be quashed and set aside and the order dated 29.09.2016 may be restored as he is ready to pay the compensation amount awarded by the trial court. Learned counsel placed reliance on judgment of Hon’ble Apex Court in the case of M/s Meters and Instruments Private Limited & Anr. Vs. Kanchan Mehta, (2017) 10 SCR 66, Damodar S. Prabhu Vs. Sayed Babalal H., 2010 (5) SCC 663, judgment of co-ordinate Bench of this Court in the case of Ashok Kumar Vs. State of Rajasthan, (2016) 2 Cri LR 685.

5. Per contra, counsel for the respondent vehemently opposed the prayer made by the appellant and submits that despite the fact that the appellant was convicted for offence under Section 138 N.I. Act, he was granted benefit of probation under Section 4(1) of the Probation of offenders Act but awarded meagre compensation in comparison to the cheque amount, therefore, the appellate court has rightly doubled the cheque amount by way of compensation, which does not call for any interference, as the cheque was issued way back in the year 2009 and the judgment was passed by the