The Supreme Court Bench comprising Chief Justice of India N.V. Ramana, Justice Surya Kant and Justice A.S. Bopanna in the case titled Triyambak S. Hegde v. Sripad dated 23-09-2021 gives their views on gravity of complaint under NI Act cannot be equated with an Offence under IPC.

Facts of the Case:

The Respondent who was known to the appellant for the past few years approached the appellant and informed that due to his financial difficulty he intends to sell the house situated in Sirsi town. The appellant agreed to purchase the same for the negotiated total sale consideration of Rs.4,00,000/­.  An agreement dated 06.06.1996 was executed by the respondent while   receiving   the   advance   amount   of   Rs.3,50,000/­.   Subsequently, when the appellant made certain enquiries, he learnt that the house stood in the name of the father of the respondent and the respondent did not have the authority to sell the same. In that view, the appellant demanded the return of Rs. 3,50,000/­ which he had paid as the advance amount. The respondent instead of paying the entire amount, issued a cheque dated 17.05.1998 for the sum of Rs. 1,50,000/­ being   part   of   the   amount. The appellants presented the cheque for realisation on 20.05.1998 when it came to be dishonoured with the endorsement ‘insufficient funds’. The Appellant issued a notice and later filed a complaint. The said complaint was allowed by the Magistrate and the appellant was convicted and sentenced to undergo simple imprisonment for 6 months and to pay the fine of Rs. 2,00,000. The Sessions Court dismissed the appeal filed by the appellant. The High Court allowed the revision petition filed against said order of the Sessions Court and acquitted the appellant.

Submissions of the Respondent:      

The Respondent has submitted that merely because the signature on the cheque was admitted the courts jumped to the conclusion by raising a presumption, though there was no evidence on record to show that the appellant possessed the funds and the same had been actually paid by him to the respondent to constitute legally recoverable debt.

Supreme Court’s observation and Judgment:

The Supreme Court held:

“As is evident from the records the notice issued by the appellant intimating the dishonorment of the cheque and demanding payment, though received by the respondent has not been replied. In such a situation, the first opportunity available to put forth such contention if true was not availed. Even in the proceedings before the Magistrate, the respondent has not put forth such an explanation in the statement recorded under Section 313 of CrPC nor has the respondent chosen to examine himself or any witness in this regard. Therefore, in the present facts it cannot be held that the presumption which had arisen in favour of the appellant had been successfully rebutted by the respondent. The High Court therefore was not justified in its conclusion."

 It further stated:

"The subject cheque has been issued towards repayment of a portion of the advance amount since the sale transaction could not be taken forward. In that background, what cannot also be lost sight of is that more than two and half decades have passed from the date on which the transaction had taken place. SC in Kaushalya Devi Massand vs. Roopkishore Khore (2011) 4 SCC 593, the gravity of complaint under N.I. Act cannot be equated with an offence under the provisions of the Indian Penal Code, 1860 or other criminal offences. In the facts and circumstances of the instant case, if an enhanced fine is imposed it would meet the ends of justice. Hence, appropriate modification is made to the sentence in the manner as indicated hereinbelow:
For all the aforestated reasons, the following order:
(i) The order dated 01.12.2009 passed by the High Court in Criminal Revision Petition No. 1282/2006 and 1481/2006 are set aside.
 (ii) The conviction ordered in C.C. No.790/2000 by the learned JMFC is restored.
 (iii) The   sentence   to   undergo   simple imprisonment   for   six   months   and   fine   of Rs.2,00,000/­ is however modified. The Respondent/Accused is instead sentenced to pay the fine of Rs. 2,50,000/­ within   three   months.   In default of payment of fine the respondent/Accused shall undergo simple imprisonment for six months.
 (iv) From   the   fine   amount, a  sum of Rs. 2,40,000/­ shall   be   paid to the Appellant/Complainant as compensation.
 (v) The Appeals No.849­850/2011 are accordingly allowed in part.
 (vi) The pending applications, if any, stand disposed of. “

Read Judgement Here:

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