Negotiable Instruments Act, 1881

Compounding the offence under Section 138 of the Negotiable Instruments Act, 1881 on payment of the cheque amount and in the alternative for exemption from personal appearance.

How the proceedings for an offence under Section 138 of the Act can be regulated where the accused is willing to deposit the cheque amount? Whether in such a case, the proceedings can be closed or exemption granted from personal appearance or any other order can be passed?

i) Offence under Section 138 of the Act is primarily a civil wrong. Burden of proof is on 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 paid and if there is no reason to proceed with the punitive aspect.

ii) The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court. Continue reading “Procedure for speedy justice in matters of dishonour of cheques.” →