NI Act Section 138 — Dishonour of cheque for insufficiency of funds

Judgments citing NI Act Section 138

1. Criminal Appeal No.523 of 2019 on 19 January, 2023

   High Court of High Court for State of Telangana19 Jan 2023

   Case Name: Criminal Appeal No.523 of 2019 Court: The Hon’ble Smt. Justice G. Anupama Chakravarty Date of Judgment: 19 January, 2023 Bench: Single Judge (Smt. Justice G. Anupama Chakravarty) Subject: Criminal Law – Dismissal of Appeal for Default Key Legal Propositions 1. Repeated non-representation by the appellant despite multiple opportunities and directions to serve notice constitutes sufficient grounds for dismissal of the appeal. 2. An appeal against acquittal, particularly in a quasi-judicial matter, requires diligent prosecution by the appellant. 3. Courts are justified in dismissing appeals for default when the appellant demonstrates a lack of interest in pursuing the case. Judgment Summary Background: The Criminal Appeal No. 523 of 2019 was listed on multiple dates (13.10.2022, 20.10.2022, 14.11.2022, 02.12.2022, 07.12.2022, 28.12.2022, and 06.01.2023). On each occasion, the appellant was either not represented or had failed to properly serve notice to the respondents. The Court repeatedly directed the appellant’s counsel to serve notice and granted opportunities to prosecute the appeal. Held: A. On Issue of Dismissal for Default: Majority View: The Court held that

2. Criminal Revision Case No.1442 of 2006 on 18 April, 2023

   High Court of Andhra Pradesh18 Apr 2023

   Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. Delay in disposal of revision petitions necessitates consideration of serving notice to the accused, particularly when sentence is a point of contention. 2. A revision petition concerning sentencing cannot be decided in the absence of the accused, as it may prejudice their rights. 3. Prolonged pendency of a case, coupled with inability to serve notice, justifies dismissal of the revision petition with a recording of the circumstances. Judgment Summary Background: The revision petition concerned a conviction under Section 138 of the Negotiable Instruments Act, 1881, where the complainant alleged an inadequate sentence (fine only, without imprisonment or compensation). The complainant stated they were unable to serve notice on the accused. The Public Prosecutor argued the revision could not be decided in the accused’s absence, given a potential appeal on sentencing. Held: A. On Service of Notice & Sentencing: Majority View: The Court held that deciding the revision petition without serving notice on the accused, especially concerning the sentence, would be inappropriate. The Court emphasized the need to

3. Between M. Rama Rao vs The State of A.P. on 04 October, 2023

   High Court of Andhra Pradesh4 Oct 2023

   Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. An appeal can be dismissed for non-prosecution when the appellant fails to appear despite posting under the caption “For Dismissal”. 2. Absence of representation does not preclude dismissal of the appeal, particularly when no appearance is made by the appellant. 3. Closure of pending miscellaneous applications follows dismissal of the main appeal. Judgment Summary Background: This Criminal Appeal was filed seeking acquittal of the accused under Section 138 of the Negotiable Instruments Act. The appeal was listed for dismissal due to the appellant’s absence. Held: A. On Appeal for Non-Prosecution: Majority View: The Court dismissed the Criminal Appeal for non-prosecution due to the appellant’s failure to appear, despite being listed under the caption “For Dismissal”. Dissenting View: None. B. On Pending Miscellaneous Applications: Majority View: All pending miscellaneous applications were directed to be closed following the dismissal of the main appeal. Dissenting View: None. C. On Respondent Representation: Majority View: The Court noted the presence of a Special Assistant Public Prosecutor for the S

4. Criminal Revision Case No.1677 of 2008 on 18 April, 2023

   High Court of Andhra Pradesh18 Apr 2023

   Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. A revision petition challenging a conviction under Section 138 of the Negotiable Instruments Act, 1881 becomes infructuous upon the death of the revision petitioner. 2. Courts may dispose of pending petitions when the petitioner is deceased, even without formal proof of death, acknowledging the futility of further proceedings. 3. Lack of interest from family members in pursuing the petition reinforces the justification for its disposal following the petitioner’s death. Judgment Summary Background: The present Criminal Revision Case arises from a challenge to a judgment convicting the revision petitioner under Section 138 of the Negotiable Instruments Act, 1881. The conviction was affirmed in appeal with a reduced sentence. The petitioner subsequently passed away. Held: A. On Issue of Petition’s Maintainability after Petitioner’s Death: Majority View: The Court held that the revision petition is no longer maintainable due to the death of the revision petitioner. The Public Prosecutor and counsel for the petitioner both submitted that the petition should be disposed of in light of this fact. Dissenting V

5. State of Andhra Pradesh vs. Unknown on 17 August, 2023

   High Court of Andhra Pradesh17 Aug 2023

   Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. A quasi-criminal appeal can be dismissed for non-prosecution if the appellant fails to diligently pursue the case despite multiple opportunities. 2. Absence of representation by the appellant, even after repeated listings and directions for dismissal, constitutes non-prosecution. 3. Pending miscellaneous applications are closed upon dismissal of the main appeal. Judgment Summary Background: This Criminal Appeal arises from the setting aside of a conviction under Section 138 of the Negotiable Instruments Act, 1881. The appellant, originally the complainant, challenges the acquittal of the accused. The appeal has been repeatedly listed without any representation from the appellant. Held: A. On Non-Prosecution: Majority View: The Court held that the appeal is liable to be dismissed for non-prosecution due to the consistent absence of representation from the appellant despite multiple listings and a prior direction for dismissal. Dissenting View: None. B. On Diligent Prosecution: Majority View: The Court emphasized that diligent prosecution of a quasi-criminal case is essential, and failure to do so warra

6. Sunil Mantri vs Maharashtra Savings & Anr on 19 September, 2023

   High Court of Delhi19 Sept 2023

   Case Name: Sunil Mantri vs Maharashtra Savings & Anr on 19 September, 2023 Court: High Court of Delhi Date of Judgment: 19th September, 2023 Bench: Hon'ble Mr. Justice Amit Bansal Subject: Negotiable Instruments Act, Jurisdiction, Restoration of Complaint, Amendment of Law Key Legal Propositions 1. The provisions of Section 142A of the Negotiable Instruments Act, 1881 are retrospective in nature. 2. Following the amendment to the NI Act, territorial jurisdiction for complaints under Section 138 vests in courts where the cheque was delivered for collection. 3. Delay in re-filing a complaint after it was returned for lack of jurisdiction can be condoned, particularly when the delay is due to the legislative amendment and subsequent interpretation by the courts. Judgment Summary Background: The petition challenges an order allowing a revision petition and restoring a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complaint was initially returned due to jurisdictional issues following the Supreme Court’s decision in *Dashrath Rupsingh Rathod v. State of Maharashtra & Anr.*, but the complainant failed to re-file within the stipulated 30 days. Subsequently

7. Bhargava Commercial Pvt Ltd. vs Kunal Advertising Pvt Ltd And Ors. on 14 March, 2023

   High Court of Delhi14 Mar 2023

   Case Name: High Court of Delhi Court: High Court of Delhi Date of Judgment: 14.03.2023 Bench: Justice Dinesh Kumar Sharma Subject: Restoration of Complaint Case Key Legal Propositions 1. Accidental default in appearance before a court, particularly during the COVID-19 pandemic, may be considered a valid reason for restoration of a dismissed complaint. 2. Restoration of a dismissed complaint is permissible when the respondent expresses no objection. 3. The Court, while restoring a case, clarifies that it has not adjudicated on the merits of the case. Judgment Summary Background: The petition sought the restoration of Complaint Case No. 53612/2016, *Bhargava Commercial Pvt. Ltd. vs. Kunal Advertising Pvt. Ltd. and Anr.*, which had been dismissed in default due to the petitioner’s non-appearance. The petitioner attributed the non-appearance to the restricted functioning of courts during the COVID-19 pandemic. Held: A. On Restoration of Complaint Case: Majority View: The Court allowed the petition and restored the complaint case to its original number, noting the lack of objection from Respondent No. 2 and the petitioner’s explanation regarding the default. Dissenting View: None

8. Gurvinder Singh vs The State (NCT of Delhi) & Anr. on 28 April, 2023

   High Court of Delhi28 Apr 2023

   Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. A compromise deed executed between the petitioner and the complainant, and subsequently with the Legal Representatives of the complainant, is a valid ground for setting aside a conviction and sentence. 2. Courts may accept a compromise deed in cases involving offences under Section 138 of the Negotiable Instruments Act, allowing for the withdrawal of complaints and release of deposited funds. 3. The High Court, in exercise of its revisional jurisdiction, can set aside an order dismissing a criminal appeal based on a valid compromise between the parties. Judgment Summary Background: The present revision petition challenges the dismissal of a criminal appeal against a conviction and sentence under Section 138 of the Negotiable Instruments Act. The petitioner was convicted for bouncing a cheque and sentenced to imprisonment and compensation. A sum of Rs. 5,50,000/- was deposited with the trial court. Subsequently, the complainant expired, and his Legal Representatives (LRs) were impleaded. The LRs relinquished their rights in favour of their mother, Smt. Kamlesh Mahna, who entered into a compromise with th

9. ANANT RAJ AGENCIES PVT LTD vs R.L. VERMA & ORS on 25th September, 2023

   High Court of Delhi

   Case Name: ANANT RAJ AGENCIES PVT LTD vs R.L. VERMA & ORS on 25th September, 2023 Court: High Court of Delhi Date of Judgment: 25th September, 2023 Bench: Justice Amit Bansal Subject: Criminal Appeal – Section 138 of the Negotiable Instruments Act, 1881 – Dismissal of Complaint – Non-Appearance of Counsel – Restoration of Complaint Key Legal Propositions 1. Dismissal of a complaint under Section 138 NI Act solely on account of a single instance of non-appearance of counsel is a drastic measure, particularly when the appellant had been diligently appearing through counsel on previous dates. 2. Courts should prioritize deciding cases on substantive merits rather than relying on technicalities, and a single non-appearance should not automatically lead to dismissal of a long-pending complaint. 3. Imposition of costs can be an appropriate remedy for non-appearance, rather than outright dismissal of a complaint, ensuring access to justice and preventing undue hardship. Judgment Summary Background: The present petition is a Criminal Leave Petition seeking leave to appeal against the order of the Metropolitan Magistrate dismissing a complaint filed under Section 138 of the Negotiable

10. Thomas Mathulla vs Jose Varghese and Another on 26 October, 2023

    High Court of Kerala26 Oct 2023

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. A party convicted under Section 138 of the Negotiable Instruments Act can have their sentence suspended upon depositing a percentage of the fine amount as directed by the appellate court. 2. An appellate court has the discretion to extend the time granted for fulfilling conditions attached to a sentence suspension order. 3. The court may consider the inability of a litigant to comply with financial obligations imposed as a condition for sentence suspension and grant further time for compliance. Judgment Summary Background: The Petitioner challenged an order directing them to deposit 20% of the fine amount before the trial court within 60 days, as a condition for the suspension of their sentence under Section 138 of the Negotiable Instruments Act. The Petitioner had previously been granted an extension of time, but sought further extension due to inability to pay. Held: A. On Extension of Time for Deposit of Fine: Majority View: The Court found merit in granting further time to the Petitioner to deposit the fine amount. The time to deposit the amount as ordered in Annexure-A2 was extended for a further

11. Muraleedharan Nair vs State of Kerala & Anr on 26 October, 2023

    High Court of Kerala26 Oct 2023

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. An appellate court’s order directing deposit of a percentage of the fine amount as a condition for suspending a sentence generally does not warrant interference by a higher court. 2. Courts may grant extensions of time for fulfilling conditions imposed in orders, particularly concerning financial obligations. 3. Coercive measures against a petitioner can be temporarily suspended to allow for compliance with court orders. Judgment Summary Background: The Petitioner, Muraleedharan Nair, filed a Criminal Miscellaneous Case (Crl.MC) seeking to set aside an order of the Sessions Court, Alappuzha, which directed the deposit of 20% of the fine amount as a condition for suspending the sentence in a criminal appeal. The Petitioner had been convicted under Section 138 of the Negotiable Instruments Act by the trial court and appealed the conviction. Held: A. On Validity of Sessions Court Order: Majority View: The Court found no reason to interfere with the Sessions Court’s order directing the deposit of 20% of the fine amount as a condition for suspending the sentence. Dissenting View: None. B. On Request for Ex

12. Abdul Salam vs State of Kerala & Anr. on 20 October, 2023

    High Court of Kerala20 Oct 2023

    Case Name: Abdul Salam vs State of Kerala & Anr. on 20 October, 2023 Court: High Court of Kerala Date of Judgment: 20 October, 2023 Bench: P.V. Kunhikrishnan, J. Subject: Criminal Procedure – Expediting Trial – Section 138, Negotiable Instruments Act Key Legal Propositions 1. Courts may direct subordinate courts to expedite trials in the interest of justice. 2. Subordinate courts are expected to make earnest efforts to dispose of pending cases, particularly those over five years old. 3. Courts can direct coercive steps to ensure the appearance of the accused for trial. Judgment Summary Background: The Petitioner sought a direction from the High Court to expedite the trial of C.C. No. 3107/2017, pending before the Judicial First Class Magistrate (NI Act Cases), Ernakulam, under Section 138 of the Negotiable Instruments Act. The Court directed the Registry to obtain a report from the Magistrate regarding the time required for disposal. Held: A. On Expediting Trial: Majority View: The Court, upon receiving a report from the Magistrate indicating a willingness to dispose of the matter within six months, disposed of the petition directing the Magistrate to do so expeditiously, at

13. Azeez Pottachola vs Kunhimuhammed Palakkal & Another on 10 February, 2023

    High Court of Kerala10 Feb 2023

    Case Name: Azeez Pottachola vs Kunhimuhammed Palakkal & Another on 10 February, 2023 Court: High Court of Kerala at Ernakulam Date of Judgment: 10 February, 2023 Bench: V.G. Arun, J. Subject: Negotiable Instruments Act, Section 138 - Dishonour of Cheque - Revision Petition - Conviction & Sentence - Reduction of Sentence & Extension of Time for Payment of Compensation. Key Legal Propositions 1. Offences under Section 138 of the Negotiable Instruments Act are quasi-civil in nature. 2. Courts have the discretion to reduce the sentence and extend the time for payment of compensation in revision petitions under Section 138 of the N.I. Act, considering the nature of the offence and the age of the cheque. 3. Concurrent findings of fact recorded by the trial court and the first appellate court are generally not interfered with in a revision petition unless there are compelling reasons to do so. Judgment Summary Background: The revision petition challenges the conviction and sentence imposed on the petitioner under Section 138 of the Negotiable Instruments Act, based on a complaint alleging dishonour of a cheque for Rs. 1,00,000/-. The trial court convicted the petitioner and sentence

14. Jagannathan vs State of Kerala on 10 October, 2023

    High Court of Kerala10 Oct 2023

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. Courts may direct expeditious disposal of pending criminal cases. 2. Trial courts are expected to provide realistic timelines for case disposal. 3. High Courts, in exercise of their supervisory jurisdiction, can issue directions to expedite trials while considering the workload of the trial court. Judgment Summary Background: The Petitioner approached the High Court of Kerala seeking directions to expedite the trial and ensure the attendance of accused persons in C.C. No. 2372/2017, a case under Section 138 of the Negotiable Instruments Act, pending before the Judicial First Class Magistrate Court-XI, Thiruvananthapuram. The Petitioner also sought dispensation of translation of Malayalam documents. The Court directed the Registry to obtain a report from the trial court regarding the time required for disposal. Held: A. On Prayer for Expedited Trial: Majority View: The Court, considering the report from the trial court, directed the Judicial First Class Magistrate Court-XI, Thiruvananthapuram to dispose of C.C. No. 2372/2017 as expeditiously as possible, and at any rate, within ten months from the date

15. Kunhahammed vs Moideen and State of Kerala on 12 September, 2023

    High Court of Kerala12 Sept 2023

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. An appellate court can suspend a sentence under Section 138 of the Negotiable Instruments Act, subject to conditions like deposit of compensation. 2. Extension of time for compliance with court orders is permissible, considering individual circumstances and hardship. 3. Failure to comply with extended timelines may result in execution of the original sentence. Judgment Summary Background: The Petitioner challenged orders (Annexures A2 & A3) passed by the Sessions Court, Manjeri, relating to a conviction under Section 138 of the Negotiable Instruments Act. The Petitioner was initially convicted by the Judicial First Class Magistrate Court and, on appeal, the sentence was suspended contingent upon depositing 20% of the compensation amount. The Petitioner sought an extension of time to fulfill this condition due to his mother’s illness and financial hardship. Held: A. On Extension of Time for Deposit: Majority View: The Court found merit in granting a further extension of 45 days to the Petitioner to deposit the required amount, considering the stated circumstances. No notice to the Respondent was deemed

16. Ravindra s/o Vitthalrao Uike vs Suresh s/o Rambhauji Agrawal on 03 October, 2022

    Bombay High Court3 Oct 2022

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. Recall of a witness after defence begins is permissible if a legitimate need arises to clarify a matter of record and no prejudice is caused to the opposing party. 2. An application for recall of a witness is not solely to fill lacunae in evidence, but also to clarify existing factual aspects relevant to the case. 3. The Court may allow recall of a witness to establish a crucial fact, even if documentary evidence already exists, if it aids in clarifying the overall context. Judgment Summary Background: The petitioner challenged an order of the Trial Court allowing the respondent-complainant in a Section 138 Negotiable Instruments Act case to recall and re-examine himself. The complainant sought recall to clarify whether the bank account where the cheque was dishonoured was a joint or sole account, as this was a point raised during cross-examination. Held: A. On Admissibility of Recall of Witness: Majority View: The Court upheld the Trial Court’s decision, finding no reason to interfere. It held that recall was permissible to clarify a matter of record – the nature of the bank account – and would not ca

17. Shri Vinod Uttamrao Warkad vs Prakash Marotrao Kohle and Another on 11 November, 2022

    Bombay High Court11 Nov 2022

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. Where an applicant has deposited the compensation amount as directed by the trial court and undergone a portion of the sentence, leniency in sentencing may be considered. 2. In cases under Section 138 of the Negotiable Instruments Act, the absence of a finding of intentional default warrants a more proportionate sentence. 3. High Courts have the power to interfere with the sentencing decisions of Appellate Courts to ensure a reasonable and just outcome. Judgment Summary Background: The applicant, Vinod Uttamrao Warkad, filed a Criminal Revision Application challenging the judgment of the Additional Sessions Judge, Bhandara, which affirmed his conviction under Section 138 of the Negotiable Instruments Act, 1881. He was sentenced to one month’s simple imprisonment and directed to pay Rs. 1,50,000/- as compensation. The applicant had already deposited the compensation amount and served 18 days of his sentence. Held: A. On Sentencing under Section 138 NI Act: Majority View: The Court observed that considering the applicant had already deposited the compensation amount and undergone 18 days of imprisonment,

18. Bharatrao Kamte and Another vs. Charan Shetty on 08 September, 2022

    Bombay High Court8 Sept 2022

    Case Name: Bharatrao Kamte and Another vs. Charan Shetty on 08 September, 2022 Court: High Court of Judicature at Bombay Date of Judgment: 08 September, 2022 Bench: N. J. Jamadar, J. Subject: Commercial Law, Negotiable Instruments Act, Summary Suit, Leave to Defend Key Legal Propositions 1. Acknowledgment of debt coupled with issuance of cheques for repayment establishes a clear liability, precluding arguments that the cheques were issued solely as security. 2. In the absence of a stipulated interest rate, Section 80 of the Negotiable Instruments Act, 1881 mandates an interest rate of eighteen percent per annum on the outstanding amount. 3. Negotiations for alternative repayment methods (like transfer of property) post-dishonour of cheques, while indicating a triable issue regarding novation, do not negate the initial acknowledgment of debt and liability. Judgment Summary Background: This is a Commercial Summary Suit filed by the Plaintiffs seeking recovery of Rs. 2,50,00,000/- from the Defendant, based on dishonoured cheques issued towards repayment of a loan. The Defendant seeks leave to defend the suit, claiming the loan was a friendly one without interest, the cheques wer

19. K.SURENDER vs THE STATE OF TELANGANA on 26 December, 2022

    High Court of High Court for State of Telangana26 Dec 2022

    Case Name: Court: Date of Judgment: Bench: Subject: Key Legal Propositions 1. Non-disputed signature on a cheque is a crucial factor in establishing liability under Section 138 of the Negotiable Instruments Act. 2. Courts may consider the age of the accused and the time elapsed since the transaction when determining the appropriate sentence. 3. A court can modify a sentence based on specific circumstances, including requiring the accused to deposit a sum of money as a condition for reduced imprisonment. Judgment Summary Background: This Criminal Revision Case challenges the conviction under Section 138 of the Negotiable Instruments Act, 1881, affirmed by the Sessions Court. The complainant alleged that the petitioner took a loan of Rs. 1 lakh and issued a cheque for Rs. 1,40,000 which was returned unpaid. The petitioner contested the complainant’s financial capacity to lend such an amount. Held: A. On Section 138 of the Negotiable Instruments Act, 1881: Majority View: The signature on the cheque was not disputed, and the Courts below correctly considered the evidence. The Court found no reason to interfere with the conviction. Dissenting View: None. B. On Sentencing: Majority V

20. K. KRUPAKAR REDDY vs KUNTA PADMA & ANR. on 06 September, 2022

    High Court of High Court for State of Telangana6 Sept 2022

    Case Name: K. KRUPAKAR REDDY vs KUNTA PADMA & ANR. on 06 September, 2022 Court: High Court for the State of Telangana at Hyderabad Date of Judgment: 06 September, 2022 Bench: Hon'ble Sri Justice K. Surender Subject: Negotiable Instruments Act, 1881 - Section 138 - Maintainability of Complaint - GPA Holder - Examination of Complainant Key Legal Propositions 1. A complaint under Section 138 of the Negotiable Instruments Act is not maintainable if the original complainant does not depose before the court, and a GPA holder appears subsequently without establishing personal knowledge of the transaction. 2. The court must be satisfied that a legally enforceable debt exists between the complainant and the accused, and a third-party GPA holder cannot establish this without the complainant's testimony. 3. A judgment of acquittal enhances the presumption of innocence of the accused and requires a fair trial and investigation, adhering to principles of criminal jurisprudence. Judgment Summary Background: The appeal arises from the dismissal of a complaint under Section 138 of the Negotiable Instruments Act, 1881, by the VI Additional Judicial First Class Magistrate, Warangal. The compla