Even if an accused has paid the amount of a bounced cheque under civil proceedings, he can still be prosecuted under the Negotiable Instruments Act, ruled the Bombay high court.
Justice JH Bhatia recently dismissed an appeal filed by Zubair Menon, a partner of Popular Watch Company in Pune, challenging his conviction of three months’ imprisonment awarded by a sessions judge in November 2008.
Dismissing the appeal, justice Bhatia said: “Merely because the complainant had filed a civil suit and the decree was passed, the complainant cannot be debarred from prosecuting the criminal proceedings against the accused.”
According to additional public prosecutor Pradeep Hingorani, Popular Watch Company and Menon had taken a loan of Rs1 lakh from Pradeep Shah in 2001.
For loan repayment, Menon had issued a cheque on May 28, 2005, which was returned with remarks — “insufficient funds”.
When Menon did not repay the amount, Shah filed a complaint with the metropolitan magistrate under the Negotiable Instruments Act. The magistrate convicted both the accused and directed the company to deposit Rs20,000 to be paid as compensation to the complainant and awarded one-year rigorous imprisonment to Menon.
Menon challenged his conviction before the sessions court, which reduced his imprisonment period to three months in November 2008 and directed him to pay Rs20,000 as compensation to Shah.
Pending criminal proceedings, Shah had filed a suit in 2007 for recovery of the amount. The city civil court on November 29, 2008, decreed the suit and Menon paid Rs1 lakh of the cheque amount with 4% interest per annum.
Menon’s advocate Uday Warunjikar said that Menon had deposited the compensation amount (Rs20,000) with the trial court and the decretal amount (Rs1 lakh) as per the order in the civil suit. Hence his sentence should be quashed.
Upholding the conviction, justice Bhatia observed that the “legislature had provided for two remedies in case of bouncing of a cheque”.
“On civil side, the payee (complainant) can claim the amount of cheque with interest and at the same time, he can also prosecute the accused under Section 138 of the Negotiable Instruments Act,” said justice Bhatia.