Summary
The High Court reversed an acquittal and restored the appellant's conviction under Section 138 of the Negotiable Instruments Act without dealing with the First Appellate Court's finding that the complainant was an unlicensed money-lender under the Goa Money-Lenders Act, 2001, which was a valid defence. Since the cheque amount and compensation had already been paid, the Supreme Court invoked Article 142 to compound the offence and acquit the appellant.
Issues
- Whether the High Court's reversal of the acquittal could stand when it did not consider the defence based on the Goa Money-Lenders Act, 2001.
- Whether, the cheque amount and compensation having been paid, the offence under Section 138 of the Negotiable Instruments Act should be compounded and the accused acquitted.
Provisions considered
- Section 138, Negotiable Instruments Act, 1881The trial Court had convicted the appellant for dishonour of a cheque of Rs. 2,00,000. The Supreme Court, noting that the cheque amount and compensation had been paid, compounded the offence and acquitted the appellant, conditional on the deposited sum reaching the complainant. (¶¶ 3, 4, 10)
- Unlicensed money-lending, Goa Money-Lenders Act, 2001The First Appellate Court had acquitted the appellant on the footing that the complainant lent money without a licence in breach of the Goa Act and so could not prosecute under the NI Act. The Supreme Court treated this as an important defence that the High Court failed to address while reversing the acquittal. (¶¶ 5, 8)
- Article 142, Constitution of IndiaInvoked to compound the offence under Section 138 of the NI Act and acquit the appellant, given that the cheque amount and the fine of Rs. 30,000 imposed by the trial Court had already been paid. (¶ 10)
- Section 357, Code of Criminal Procedure, 1973The trial Court's sentence, restored by the High Court, included compensation of Rs. 2,00,000 towards the cheque amount and Rs. 30,000 as cost under this provision, with default imprisonment; this was the amount found to have been paid. (¶¶ 4, 9)
Held
- A High Court reversing an acquittal in a cheque-dishonour case must deal with the defence on which the acquittal rested; the impugned judgment did not advert to the applicability of the Goa Money-Lenders Act, 2001, which afforded the accused a valid defence, and so did not stand to scrutiny. (¶ 8)
- Where the accused has admittedly paid the cheque amount and the compensation imposed by the trial Court, the Supreme Court may exercise its power under Article 142 of the Constitution to compound the offence under Section 138 of the NI Act and acquit the accused, subject to the deposited amount being paid over to the complainant. (¶¶ 9, 10)
Result
Appeal allowed; offence under Section 138 of the NI Act compounded under Article 142 and the appellant acquitted, subject to the entire Rs. 2,30,000 deposited by him being paid to the complainant if not already paid; pending applications disposed of.