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Synopsis

The Supreme Court has said that the object of Section 138 of the Negotiable Instruments Act is primarily compensatory, and the punitive element of the provision serves to enforce the compensatory aspect.

A bench of Justices Sudhanshu Dhulia and K Vinod Chandran allowed a plea by Balai Chandra Mondal against the Calcutta High Court's order of November 16, 2021, holding that the sentence imposed on him was not justified as he had already deposited the compensation and fine.

The petitioner was convicted and sentenced to pay compensation of Rs 11,50,000 within 45 days, failing which he would have to undergo simple imprisonment for a period of two years, as ordered by the trial court at Krishnagar, Nadia, in a complaint case for offences punishable under Sections 138/142 of the Negotiable Instruments Act.

This order was upheld by the appellate court as well as the high court in revision by orders dated April 13, 2017, and November 16, 2021, respectively. A cheque drawn by the petitioner on February 24, 2014, for an amount of Rs 10 lakh was dishonoured.

The bench, however, noted the admitted facts that this amount was directly paid by the petitioner to respondent no. 1-complainant on August 18, 2014. In addition to that, he had already deposited Rs 5 lakh before the trial court concerned in compliance with the high court’s order of May 16, 2017.

"Presently, without getting into the merit of the case and considering the fact that the amount which has already been paid we do not think that the sentence which has been imposed on the petitioner presently is justified particularly considering the nature of the case," the bench said.

The bench cited the decision of the top court in M/s Meters and Instruments (P) Ltd Vs Kanchan Mehta (2018), where it was held that the object of Section 138 of the Negotiable Instruments Act is primarily compensatory, and the punitive element of the provision serves to enforce the compensatory aspect.

The court, therefore, directed the trial court concerned that out of the fine of Rs 5 lakh deposited by the petitioner, Rs 2 lakh along with accrued interest, if any, be released in favour of respondent no. 1-complainant within two weeks from the date of receipt of the certified copy of the order. The remaining amount, i.e., Rs 3 lakh along with accrued interest, if any, should be returned to the petitioner, court ordered.

The court accordingly disposed of the special leave petition.

Case Title: Balai Chandra Mondal Vs Laxmipriya Dey & Anr