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Wherein no limit of compensation is mentioned, the Magistrate is empowered to impose a reasonable amount of compensation u/s 357(3) Cr.P.C.: High Court of Delhi

For offence u/s 138 of NI Act should be of such nature as to give proper effect to the object of legislation and no drawer of the cheque can be allowed to take dishonour of cheque issued by him light heartedly. The Magistrate can alleviate the grievance of the complainant by making resort to Section 357(3) Cr.P.C. wherein no limit of compensation to be awarded by the Magistrate has been mentioned and, thus, the Magistrate is empowered to impose a reasonable amount of compensation payable to complainant and the same was upheld by High Court of Delhi through the learned bench led by JUSTICE RAJNISH BHATNAGAR in the case of SANJAY GUPTA vs. THE STATE & ANR. [CRL.REV. P. 326/2021] on 24.03.2022.

The facts of the case are that the respondent filed a complaint under Section 138 NI Act against the revisionist stating that the revisionist had taken a friendly loan of from the respondent for a period of one month. The revisionist issued the cheque drawn on Kotak Mahindra Bank for a sum of Rs. 4,80,000 in favour of the respondent. The said cheque was presented for encashment by the respondent which was returned by the banker with remark “fund insufficient.” Thereafter, the respondent issued legal notice calling upon the revisionist to make payment of the cheque amount within 15 days of the receipt of the legal notice. However, the payment of the cheque in question was not made by the revisionist within the stipulated period which resulted in the filing of the complaint case under Section 138 of NI Act.

The counsel for the revisionist submitted that the revisionist is a stranger to the respondent and that he has no legal liability towards him. It was further submitted that he had lost his signed blank cheques and a complaint in this regard was also filed. It was further submitted that the cheque in question is stated to have been given in February 2017 which is much later than the date of his complaint preferred in 2014. It was also submitted that no document was executed by respondent against the advancement of huge loan of Rs. 4,80,000.

The counsel for the respondent submitted that he had duly placed on record the original cheque signed by the revisionist, the bank return memos, the legal notice issued u/s 138 NI Act and the postal receipt showing service of the legal notice on the revisionist. It was further submitted that the revisionist has taken the defence that his cheques got lost and he filed a complaint in this regard in 2014, however, no such complaint has been placed on record by the revisionist before the Trial Court.

In view of the facts and circumstances, the Court found no infirmity in the impugned Judgment passed by the Trial Court and the same is, therefore, upheld. The Court observed, “for offence under Section 138 of NI Act should be of such nature as to give proper effect to the object of legislation and no drawer of the cheque can be allowed to take dishonour of cheque issued by him light-heartedly. The Magistrate can alleviate the grievance of the complainant by making resort to Section 357(3) Cr.P.C.”

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Judgment reviewed by – Shristi Suman

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