Case Note & Summary
The appellant, M/s Ganga Bhavani Constructions, represented by its proprietor Sri Reddy Satyanarayana @ Satish, was convicted under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of a cheque issued to the second respondent, Narapureddy Sanyasi Rao. The appellant had borrowed Rs.10,00,000 from the respondent on 04.04.2007 and issued a cheque on 17.04.2008, which was dishonoured with the remark 'payment stopped by drawer'. The Trial Court convicted the appellant and sentenced him to two years' simple imprisonment, which was affirmed by the First Appellate Court. The High Court upheld the conviction but reduced the sentence to one year. The appellant appealed to the Supreme Court. During the appeal, the parties entered into a compromise, and the respondent received the full cheque amount of Rs.10,00,000. The Supreme Court, noting the compromise and the respondent's presence in court confirming receipt of the amount, set aside the conviction and acquitted the appellant under Section 320(8) of the Code of Criminal Procedure, 1973. The Court also directed refund of Rs.5,00,000 deposited by the appellant to the Trial Court.
Headnote
A) Criminal Law - Negotiable Instruments Act - Compromise - Section 138 NI Act, Section 320(8) CrPC - Appeal against conviction under Section 138 NI Act - Parties compromised and complainant received full cheque amount - Supreme Court set aside conviction and acquitted accused in terms of Section 320(8) CrPC - Held that compromise is valid ground to quash conviction in cheque dishonour cases (Paras 5-6).
Issue of Consideration
Whether conviction under Section 138 of the Negotiable Instruments Act can be set aside upon compromise between the parties?
Final Decision
Appeal allowed. Conviction and sentence set aside. Appellant acquitted under Section 138 NI Act in terms of Section 320(8) CrPC. Amount of Rs.5,00,000 deposited by appellant to be refunded.
Law Points
- Compromise in cheque dishonour cases
- Section 138 Negotiable Instruments Act
- Section 320(8) CrPC
- Acquittal upon settlement
Case Details
2019 LawText (SC) (8) 130
Criminal Appeal No. 1290 of 2019 (Arising out of SLP(Crl) No. 11006 of 2018)
R. Banumathi, A.S. Bopanna
Mr. Chava Badri Nath Babu (for appellant)
M/s Ganga Bhavani Constructions (Prop. Sri Reddy Satyanarayana @ Satish)
The State of Andhra Pradesh & Anr. (Narapureddy Sanyasi Rao)
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Criminal appeal against conviction under Section 138 of the Negotiable Instruments Act, 1881
Remedy Sought
Appellant sought setting aside of conviction and sentence
Filing Reason
Appellant was convicted for dishonour of cheque; parties later compromised
Previous Decisions
Trial Court convicted and sentenced to 2 years imprisonment; First Appellate Court affirmed; High Court upheld conviction but reduced sentence to 1 year
Issues
Whether conviction under Section 138 NI Act can be set aside upon compromise between parties?
Submissions/Arguments
Appellant submitted that parties have compromised and respondent received full cheque amount of Rs.10,00,000
Ratio Decidendi
In cheque dishonour cases, if the parties compromise and the complainant receives the full cheque amount, the conviction under Section 138 NI Act can be set aside and the accused acquitted under Section 320(8) CrPC.
Judgment Excerpts
In view of the compromise arrived at between the parties, the conviction of the appellant-accused under Section 138 of the N.I.Act and the sentence imposed upon him is set aside and the appellant-Sri Reddy Satyanarayana @ Satish is acquitted of the charge under Section 138 of the N.I.Act in terms of Section 320(8) of the Cr.P.C.
Since the second respondent-Narapureddy Sanyasi Rao, who is present in the Court in-person, has stated that he received the entire cheque amount of Rs.10,00,000/- (Rupees Ten Lakhs) pursuant to the Compromise, the amount of Rs.5,00,000/- (Rupees Five Lakhs) deposited before the Trial Court shall be refunded to the appellant.
Procedural History
Trial Court convicted appellant on 17.04.2012; First Appellate Court affirmed; High Court dismissed revision on 11.10.2018 reducing sentence to 1 year; Supreme Court granted leave on 02.01.2019 and directed deposit of Rs.5,00,000; appeal allowed on 28.08.2019 after compromise.
Acts & Sections
- Negotiable Instruments Act, 1881: 138
- Code of Criminal Procedure, 1973: 320(8)
