New Delhi: Expressing its concern over the piling up of cheque bounce cases under the Negotiable Instruments Act which are clogging the judicial system, the Supreme court has said that courts must endeavour and encourage compounding of cheque bounce cases and not focus much on the punishment aspect.
A bench of Justice Sudhanshu Dhulia and Justice A Amanullah, in a judgment recently delivered have said, “ It is to be remembered that dishonour of cheques is a regulatory offence which was made an offence only in view of public interest so that the reliability of these instruments can be ensured.”
The court added, “A large number of cases involving dishonour of cheques are pending before courts which is a serious concern for our judicial system. Keeping in mind that the ‘compensatory aspect’ of remedy shall have priority over the ‘punitive aspect’, courts should encourage compounding of offences under the NI Act if parties are willing to do so.”
The observations by the court came in the case of one P. Kumarasamy who had borrowed Rs 5,25,000 from one A Subramanium and defaulted in the payment of the money to Subramanium.
Although, a cheque was issued by Kumaraswamy it was as dishonoured due to ‘insufficient funds’. Following this a complaint was filed against the borrower and the trial court in 2012 convicted the borrower and sentenced him to under a jail term of 1 year.
Subsequently, the case was heard in appeal by the High Court which upheld the trial court order of 1-year imprisonment. Against the order of the high court upholding conviction of the borrower, the case came to the Supreme court.
The court was informed that earlier this year the lender and the borrower had entered into a settlement. The Supreme Court approved of the settlement between the parties and has now set aside the judgment of the high court sentencing the borrower to 1 year in jail.
The ‘compensatory aspect’ of remedy shall have priority over the ‘punitive aspect’ in cheque bounce cases, the SC, adding that courts should encourage compounding of offences under the NI Act if both the parties are willing to do so. Business Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
