BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K.K. RAMAKRISHNAN, J.
M. Arumugathai – Appellant
Versus
T. Geetha – Respondent
Crl.R.C(MD) No. 971 of 2023 & Crl.M.P(MD) Nos. 12579 & 12582 of 2023
Decided On : 04-09-2023
Negotiable Instruments Act - Cheque Bounce - The court allowed the criminal revision petition and acquitted the accused after the cheque amount was settled and the offence under Section 138 of the Negotiable Instruments Act was compounded.
Fact of the Case:
The petitioner borrowed a sum of Rs.1,90,000 from the respondent and issued a cheque to discharge the debt. The cheque was returned due to insufficient funds, leading to a complaint under Section 138 of the Negotiable Instruments Act.
Finding of the Court:
The court recorded the settlement of the cheque amount and compounded the offence under Section 138 of the Negotiable Instruments Act, leading to the acquittal of the accused.
Issues: Cheque bounce, Settlement of cheque amount, Compounding of offence under Section 138 of the Negotiable Instruments Act
Ratio Decidendi: The settlement of the cheque amount and the affirmation statement of the respondent led to the compounding of the offence under Section 138 of the Negotiable Instruments Act, resulting in the acquittal of the accused.
Final Decision: The court allowed the criminal revision petition, set aside the judgments of the lower courts, and acquitted the accused from the charges.
JUDGMENT
(Prayer: Criminal Revision Petition has been filed under Section 397 r/w 401 of Cr.P.C., to call for the records relating to the judgment made in C.A.No.85 of 2018 dated 15.11.2022 by the learned Principal District and Sessions Judge, Virudhunagar District at Srivilliputhur, by confirming the judgment passed by the learned Judicial Magistrate No.I, Sivakasi, Virudhunagar District, in S.T.C.No.1988 of 2015 dated 18.06.2018 and set aside the same.)
1. This Criminal Revision Case has been filed against the Judgment dated 15.11.2022 made in C.A.No.85 of 2018 passed by the learned Principal District and Sessions Judge, Virudhunagar District at Srivilliputhur, by confirming the judgment passed by the learned Judicial Magistrate No.I, Sivakasi, Virudhunagar District, in S.T.C.No.1988 of 2015 dated 18.06.2018.
2. The petitioner borrowed a sum of Rs.1,90,000/- from the respondent on 16.07.2015. To discharge the said debt, she issued a cheque, dated 07.09.2015 drawn on the State Bank of India, Sivakasi Branch. The respondent presented the cheque before his Bank and the same was returned on 21.09.2015 with an endorsement of “Insufficient Funds”. So, the respondent issued the legal notice on 30.09.2015. The petitioner received the notice on 01.10.2015 and she did not make any payment. In such circumstances, the respondent filed a complaint under Section 138 of the Negotiable Instruments Act, before the learned Judicial Magistrate No.I, Virudhuangar. The learned Judicial Magistrate taken the complaint on file in S.T.C.No.1988 of 2015.
3. Thereafter, on receipt of the summons, the petitioner appeared before the trial Court and contested the case. The learned Trial Judge after following the procedure, examined PW.1, DW.1& DW2 and perused the documents Ex.A1 & Ex.A2 and Ex.B1 to Ex.B3 and passed the conviction under Section 138 of Negotiable Instruments Act, and sentenced her to undergo one year Simple Imprisonment and also directed to pay compensation of Rs.1,90,000/- (Rupees one lakh ninety thousand only) vide Judgment dated 18.06.2018.
4. Aggrieved over the same, the petitioner filed the Criminal Appeal in Crl.A.No.85 of 2018 on the file of the learned Principal District and Sessions Judge, Virudhunagar at Srivilliputhur District. The learned Sessions Judge also confirmed the same by order dated 15.11.2022. Hence, the petitioner preferred this revision before this Court. Pending revision, petitioner was arrested and confined in Central Prison, Madurai.
5. Heard the learned counsel appearing on either side.
6. When this matter was taken up for hearing on 01.09.2023, this Court passed the following order:
“The learned counsel for the petitioner submitted that compromise has been reached between the parties and settled the issue amicably between them. Today, he has also handed over the entire cheque amount to the learned counsel, who is representing the defacto complainant.
2. He has also acknowledged the same.
3. On the basis of the above acknowledgement, this Court is inclined to record the compromise and compound the offence.
4. For passing final order, post this matter on 04.09.2023 in the top of the list.”
7. Today, when the matter is taken up for hearing, both counsel on record submitted that the matter is now compromised. They further submitted that the petitioner was arrested on 23.08.2023 and now she is in jail. Hence, they are unable to file compromise memo before this Court.
8. Today, the respondent/defacto complainant also appeared before this Court and she affirmed the receipt of cheque amount of Rs.1,90,000/- (Rupees one lakh ninety thousand only) from her counsel and she has no objection to compound the offence.
9. Considering the fact that the petitioner is confined in jail and hence, the learned counsels are unable to file the compromise memo before this Court, this Court recorded the affirmation statement of the respondent with regard to the receipt of the ch
Compounding of the offence under Section 138 of the Negotiable Instruments Act led to the acquittal of the accused.
Liability under Section 138 of the Negotiable Instruments Act and the presumption under Section 139 were crucial in establishing the accused's guilt.
Settlement and compounding of an offence under the Negotiable Instruments Act after conviction can lead to the setting aside of the conviction if both parties agree.
The compensatory nature of proceedings under Section 138 of NI Act and the court's authority to modify the sentence and compensation amount based on relevant legal provisions.
The presumption in favor of the holder of the cheque when the execution is not denied, and the need for positive evidence to prove lack of means of the respondent.
The compensatory nature of proceedings under Section 138 of NI Act and the recoverability of compensation under Section 421 of Cr.P.C were central to the court's decision.
High Court can quash Section 138 NI Act conviction via compromise in private disputes using inherent powers.
The main legal point established is that the drawer of a cheque cannot take advantage of their own fault and must comply with the legal requirements under Section 138 of the Negotiable Instruments Ac....
The compensatory nature of proceedings under Section 138 of the Negotiable Instruments Act and the recoverability of compensation even after default sentence as provided in Section 357(3), 421, and 4....
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