Negotiable Instruments Act, 1881 and "Cheque Dishonour" : SC Explains the Principles

Negotiable Instruments Act, 1881 and Cheque Dishonour : SC Explains the Principles

In case of Damodar S. Prabhu v. Sayed Babalal H [2010] GCtR 6297 (SC) it was held that it may be noted here that Section 143 of the Negotiable Instruments Act, 1881 makes an offence under Section 138 of NI Act, 1881 triable by a Judicial Magistrate First Class (JMFC). After trial, the progression of further legal proceedings would depend on whether there has been a conviction or an acquittal. 

If the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount. 

It should be mandatory for the complainant to disclose that no other complaint has been filed in any other court in respect of the same transaction. Such a disclosure should be made on a sworn affidavit which should accompany the complaint filed under Section 200 of the Code of Criminal Procedure, 1973. If it is found that such multiple complaints have been filed, orders for transfer of the complaint to the first court should be given, generally speaking, by the High Court after imposing heavy costs on the complainant for resorting to such a practice.