Posted in

S.138 NI Act | Check Dishonor case can be aggravated without consent of the complaint if the accused has compensated: Supreme Court

Recently, the Supreme Court has observed that once the complainant is compensated by the accused for the dishonored amount of the cheque, the consent of the complainant is not mandatory for aggravating the offense under the Negotiable Instruments Act, 1881 (“NI Act” ).

By relying on the judgment of JIK Industries Limited & Ors. v. Amarlal V. Jamuni & Anr, the bench comprising Judges AS Bopanna and Sudhanshu Dhulia noted that ‘consent’ is not required in compounding offenses under section 138 of the NI Act.

“Even where there is no ‘consent’, the court may terminate criminal proceedings against a suspect in cases under section 138 of the NI Act if the suspect has compensated the complainant.”said the Court, referring to the 2017 Supreme Court judgment M/s Gauges and Instruments Private Limited and another vs. Kanchan Mehta

The present case concerns the aggravation of a complaint for check dishonesty under section 147 of the NI Act. The complainant has not agreed to settle the case despite the refund of the check amount by the defendant to the complainant.

The court and the Supreme Court ruled in favor of the complainant, after which the suspect turned to the Supreme Court.

Section 147 makes the offenses under the NI Act multiplicable.

“Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offense punishable under this Act shall be aggravated.”says section 147 of the NI Act

At the outset, the court observed that under section 147 of the NI Act, it is not the duty of the court to compulsorily take cognizance of the complainant’s consent before concluding proceedings under the NI Act.

The court referred to the case of JIK Industries Ltdwhere it was held “Having regard to the non-obstante clause in section 147 of the NI Act, which is a special statute, the requirement of consent of the person imposing the composition in section 320 of the Code is not required in the case of aggravation of an offense fact under the NI Act.”

“Nevertheless, in this particular case, the courts cannot compel the complainant to give ‘consent’ to the aggravation of the case even though the complainant has been duly compensated by the accused and the complainant does not agree to the aggravation of the offense fact. .”the court added.

In view of the above observation, the court acquitted the accused from liability under the NI Act after finding that the debt amount had already been paid by the accused to the complainant.

“It is also true that mere refund of the amount cannot mean that the appellant is exonerated from criminal liability under section 138 of the NI Act. But this case also has some special facts. IIn the present case, the appellant has already spent over a year in jail before being released on bail and has also compensated the complainant. Further, in accordance with the order dated 08.08.2023, the appellant deposited an additional amount of Rs.10 lacs. There is now no point in keeping the appeal proceedings pending before the lower court of appeal.”the court noted.

On this basis the appeal was allowed.


Citation: 2024 LiveLaw (SC) 336

Click here to read/download the order