AN OFFENCE UNDER THE NI ACT CANNOT BE EQUATED TO ANY OFFENCE UNDER THE IPC - SC

The Supreme Court reaffirmed that an offence under Section 138 of the Negotiable Instruments Act could not be equated to any offence under the Indian penal code. The Bench passed this order while restoring a conviction by the Judicial Magistrate First Class (JMFC), modified the sentence by doing away with imprisonment instead of ordering an improved fine.

BACKGROUND

The appellant agreed to buy a house from the respondent, who was in financial difficulty. An agreement was executed between the two on 6th June 1996. The respondent received an advance amount of Rs ₹3,50,000. Thereafter, the appellant demanded a return of the advance payment on learning that the house belonged to the respondent’s father. 

The respondent issued a cheque of ₹1,50,000, but it came to be dishonoured due to ‘insufficient funds”. The appellant issued a notice to the respondent but received no response. Thereafter, the appellant moved to the JMFC and, the JMFC convicted the defaulter to simple imprisonment and a fine. The respondent filed an appeal before the District and Sessions Judge, which was dismissed. The respondent then filed a criminal revision petition before the HC, which was allowed.

The HC of Karnataka High Court set aside the order passed by the JMFC, leading to the present appeal before the top court.

ARGUMENTS

The counsel for the appellant argued that the documents relied on by the HC were beyond the scope of the Negotiable Instruments Act.

HELD

The Bench of Chief Justice NV Ramana, Justices Surya Kant and AS BopannaThe Bench of Chief Justice NV Ramana, Justices Surya Kant and AS Bopannaheld that the HC was not justified in its holding. However, more than 2 decades have passed, and various social-economical and changes might have taken place to the status of the parties. Therefore the bench enhanced the fine from ₹2,00,000 to ₹2,50,000.

Author: Papiha Ghoshal