Tax Management India. Com
                            Law and Practice: A Digital eBook ...
TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals SMS News Articles Highlights
        Home        
 
Extracts
Home List
← Previous Next →

M/s. Meters And Instruments Private Limited & Anr. Versus Kanchan Mehta

2017 (10) TMI 218 - SUPREME COURT OF INDIA

Compounding the offence under Section 138 of NI Act 1881 - compounding on payment of the cheque amount and in the alternative for exemption from personal appearance - Held that:- We hold that where the cheque amount with interest and cost as assessed by the Court is paid by a specified date, the Court is entitled to close the proceedings in exercise of its powers under Section 143 of the Act read with Section 258 Cr.P.C. As already observed, normal rule for trial of cases under Chapter XVII of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e-mail ID of the accused. If e-mail ID is available with the Bank where the accused has an account, such Bank, on being required, should furnish such e-mail ID to the payee of the cheque. - In every summons, issued to the accused, it may be indicated that if the accused deposits the specified amount, which should be assessed by the Court having regard to the cheque amount and interest/cost, by a specified date, the accused need not appear unless required and proceedings may be closed subject .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

required to disclose specific defence for such contest. It is open to the Court to ask specific questions to the accused at that stage. In case the trial is to proceed, it will be open to the Court to explore the possibility of settlement. It will also be open to the Court to consider the provisions of plea bargaining. Subject to this, the trial can be on day to day basis and endeavour must be to conclude it within six months. The guilty must be punished at the earliest as per law and the one w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Criminal Appeal No. 1732 of 2017 (Arising Out of Special Leave Petition (Crl.) No.5441 of 2017) - Dated:- 5-10-2017 - Mr. Adarsh Kumar Goel And Mr. Uday Umesh Lalit JJ. Criminal Appeal No. 1733 of 2017 (Arising Out of Special Leave Petition (Crl.) No.5449 of 2017) JUDGMENT ADARSH KUMAR GOEL, J. 1. Leave granted. These appeals have been preferred against the order dated 21st April, 2017 of the High Court of Punjab and Haryana at Chandigarh in CRLM Nos.13631, 13628 and 13630 of 2017. The High Cou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a case, the proceedings can be closed or exemption granted from personal appearance or any other order can be passed. The Court also appointed Mr. K.V. Viswanathan, learned senior counsel to assist the Court as amicus and Mr. Rishi Malhotra, learned counsel to assist the amicus. Accordingly, learned amicus has made his submissions and also filed written submissions duly assisted by S/Shri Rishi Malhotra, Ravi Raghunath, Dhananjay Ray and Sidhant Buxy, advocates. We place on record our appreciati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion 138 of the Act. The Magistrate vide order dated 24th August, 2016, after considering the complaint and the preliminary evidence, summoned the appellants. The Magistrate in the order dated 9th November, 2016 observed that the case could not be tried summarily as sentence of more than one year may have to be passed and be tried as summons case. Notice of accusation dated 9th November, 2016 was served under Section 251 Cr.P.C. 4. Appellant No.2, who is the Director of appellant No.1, made a sta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

equired consent of the complainant for compounding. The High Court did not find any ground to interfere with the order of the Magistrate. Facts of other two cases are identical. Hence these appeals. 5. We have heard learned counsel for the parties and learned amicus who has been duly and ably assisted by S/Shri Rishi Malhotra, Ravi Raghunath, Dhananjay Ray and Sidhant Buxy, advocates. We proceed to consider the question. 6. The object of introducing Section 138 and other provisions of Chapter XV .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

with such matters. The amendment includes provision for service of summons by Speed Post/Courier, summary trial and making the offence compoundable. 7. This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions cheques were issued merely as a device to defraud the creditors. Dishonour of cheque causes incalculable loss, injury and inconvenience to the payee and credibility of business tran .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

derance of probabilities Rangappa v. Sri Mohan (2010) 11 SCC 441. The object of the provision was described as both punitive as well as compensatory. The intention of the provision was to ensure that the complainant received the amount of cheque by way of compensation. Though proceedings under Section 138 could not be treated as civil suits for recovery, the scheme of the provision, providing for punishment with imprisonment or with fine which could extend to twice the amount of the cheque or to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion is not merely penal but to make the accused honour the negotiable instruments Lafarge Aggregates & Concrete India (P) Ltd. v. Sukarsh Azad (2014) 13 SCC 779. 8. In view of the above scheme, this Court held that the accused could make an application for compounding at the first or second hearing in which case the Court ought to allow the same. If such application is made later, the accused was required to pay higher amount towards cost etc Damodar S. Prabhu (supra). This Court has also la .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

involves consent of the complainant, this Court held that compounding could not be permitted merely by unilateral payment, without the consent of both the parties. Rajneesh Aggarwal v. Amit J. Bhalla (2001) 1 SCC 631. 9. While the object of the provision was to lend credibility to cheque transactions, the effect was that it put enormous burden on the courts dockets. The Law Commission in its 213th Report, submitted on 24th November, 2008 noted that out of total pendency of 1.8 crores cases in t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the extent and nature of examination of such witness was to be determined by the Court. The object of Section 145(2) was simpler and swifter trial procedure. Only requirement is that the evidence must be admissible and relevant. The affidavit could also prove documents (Para 41, ibid.) The scheme of Sections 143 to 147 of the Act was a departure from provisions of Cr.P.C. and the Evidence Act and complaints could be tried in a summary manner except where the Magistrate feels that sentence of mor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

presumption of dishonour of the cheque, unless and until that fact was disproved. 10. Again, this Court considered the matter in J.V. Baharuni and Anr. etc. versus State of Gujarat and Anr etc. (2014) 10 SCC 494 and observed that the procedure prescribed for cases under Section 138 of the Act was flexible and applicability of Section 326(3) of the Cr.P.C. in not acting on the evidence already recorded in a summary trial did not strictly apply to the scheme of Section 143 of the Act Para 43 of J. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iority over the punitive aspect Para 60 of J.V. Baharuni (2014) 10 SCC 494. 11. While it is true that in Subramanium Sethuraman versus State of Maharashtra (2004)13 SCC 324 this Court observed that once the plea of the accused is recorded under Section 252 of the Cr.P.C., the procedure contemplated under Chapter XX of the Cr.P.C. has to be followed to take the trial to its logical conclusion, the said judgment was rendered as per statutory provisions prior to 2002 amendment. The statutory scheme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntion of legislature. The court has to balance the rights of the complainant and the accused and also to enhance access to justice. Basic object of the law is to enhance credibility of the cheque transactions by providing speedy remedy to the complainant without intending to punish the drawer of the cheque whose conduct is reasonable or where compensation to the complainant meets the ends of justice. Appropriate order can be passed by the Court in exercise of its inherent power under Section 143 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion as may be necessary for speedy trial in the context. 12. The sentence prescribed under Section 138 of the Act is upto two years or with fine which may extend to twice the amount or with both. What needs to be noted is the fact that power under Section 357(3) Cr.P.C. to direct payment of compensation is in addition to the said prescribed sentence, if sentence of fine is not imposed. The amount of compensation can be fixed having regard to the extent of loss suffered by the action of the accu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndia and Ors. (2014) 5 SCC 590 approved the directions of the Bombay High Court, Calcutta High Court and Delhi High Court in KSL and Industries Ltd. v. Mannalal Khandelwal 2005 Cri LJ 1201 (Bom), Indo International Ltd. versus State of Maharashtra 2006 Cri LJ 208: (2005) 44 Civil CC (Bom), Harishchandra Biyani versus Stock Holding Corporation of India Ltd. (2006) 4 Mah LJ 381, Magma Leasing Ltd. versus State of W.B. (2007) 3 CHN 574 and Rajesh Agarwal versus State ILR (2010) 6 Del 610 laying dow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nted, shall scrutinise the complaint and, if the complaint is accompanied by the affidavit, and the affidavit and the documents, if any, are found to be in order, take cognizance and direct issuance of summons. 23.2. The MM/JM should adopt a pragmatic and realistic approach while issuing summons. Summons must be properly addressed and sent by post as well as by e-mail address got from the complainant. The court, in appropriate cases, may take the assistance of the police or the nearby court to s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e during trial and ask him to take notice under Section 251 CrPC to enable him to enter his plea of defence and fix the case for defence evidence, unless an application is made by the accused under Section 145(2) for recalling a witness for cross-examination. 23.5. The court concerned must ensure that examination-in-chief, cross-examination and re-examination of the complainant must be conducted within three months of assigning the case. The court has option of accepting affidavits of the witnes .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y, however, note that this Court held that general directions ought not to be issued which may deprive the Magistrate to exercise power under Section 205 Cr.P.C. TGN Kumar v. State of Kerala (2011) 2 SCC 772. We need to clarify that the judgment of this Court is not a bar to issue directions which do not affect the exercise of power under Section 205, to require personal attendance wherever necessary. Needless to say that the judgment cannot be read as affecting the power of the High Court under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence can be recorded in presence of counsel under Section 273 Cr.P.C. and Section 317 Cr.P.C. permitted trial to be held in absence of accused. Section 205 Cr.P.C. specifically enabled the Magistrate to dispense with the personal appearance. Having regard to the nature of offence under Section 138, this Court held that the Magistrates ought to consider exercise of the jurisdiction under Section 205 Cr.P.C. to relieve accused of the hardship without prejudice to the prosecution proceedings. It wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

magistrate feels that insistence of personal attendance of the accused in a summons case, in a particular situation, would inflict enormous hardship and cost to a particular accused, it is open to the magistrate to consider how he can relieve such an accused of the great hardships, without causing prejudice to the prosecution proceedings. 16. It is, thus, clear that the trials under Chapter XVII of the Act are expected normally to be summary trial. Once the complaint is filed which is accompani .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd if the complainant has no valid objection. If the accused is required to appear, his statement ought to be recorded forthwith and the case fixed for defence evidence, unless complaintant s witnesses are recalled for examination. 17. Having regard to magnitude of challenge posed by cases filed under Section 138 of the Act, which constitute about 20% of the total number of cases filed in the Courts (as per 213th Report of the Law Commission) and earlier directions of this Court in this regard, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be partly or entirely concluded online without physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated. Traffic challans may perhaps be one such category. Atleast some number of Section 138 cases can be decided online. If complaint with affidavits and documents can be filed online, process issued online and accused pays the specified amount online, it may obviate the need for personal appearance of the complainant or the ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

accused in view presumption under Section 139 but the standard of such proof is preponderance of probabilities . The same has to be normally tried summarily as per provisions of summary trial under the Cr.P.C. but with such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will apply and the Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused. iv) Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

apter XVII of the Act is to follow the summary procedure and summons trial procedure can be followed where sentence exceeding one year may be necessary taking into account the fact that compensation under Section 357(3) Cr.P.C. with sentence of less than one year will not be adequate, having regard to the amount of cheque, conduct of the accused and other circumstances. 20. In every complaint under Section 138 of the Act, it may be desirable that the complainant gives his bank account number and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.