Trial Stages in Cheque Bounce case under Section 138 of Negotiable Instruments Act 1881

Trial in Cheque Bounce Case

If the cheque presented for clearing is bounced from bank due to insufficient fund or any other reasons, demand notice to the person issued the cheque for payment should be send within 30 days from the date of bouncing cheque. If the the party failed to pay amount demanded within 15 days, a complaint under section 138 of negotiable Instrument should be filed with the concerned magistrate court within the jurisdiction.

Different stages of trial in Cheque Bounce case

Stage 1 : Filing of complaint under Section 138 with the Court

The complaint should be filed before the Trial Court within 30 days of expiring 15 days period given for payment. The Complaint should be supported with Original Returned Cheque, Original Copy of Cheque Return Slip received from Bank, Copy of Legal Notice with Acknowledgement and receipt for delivery of notice, Reply if any received against notice, Proof of amount receivable such as invoices, promissory note and etc. If the courts finds prima-facie a case is made out, then the complainant will be called to make sworn statement before the court.

Stage 2: Sworn Statement of Complainant

The complainant or his authorized agent should appear in the witness box and provide relevant details for filing the case. If the court is satisfied and finds substance in the complainant, then the summon will be issued to the accused to appear before the Court.

Stage 3: Appearance of Accused

After receipt of summon from the Court the accused shall appear in court in person or through his Counsel. The court will verify whether the summon issued by the court is received by the accused. In spite of the receipt of summon, if the accused failed to appear before the court then the the court will issue an arrest warrant against him. The court will enquire the accused whether he admits the charges made by the complaint. In case of admission of guilty, the court will post the matter for punishment. If the accused, denies the charges then he will be served with the copy of complaint and he will be directed to submit his version of defense.

Stage 4: Examination in Chief

The Complainant shall present his evidence by way affidavit or oral and produce all documents including the original in support of his complaint. The complainant can also present his witnesses in support of his case.

Stage 5: Cross Examination

The complainant will be cross examined by the accused or his counsel. The other witnesses appeared in support of the complainant will also be cross examined in this stage.

Stage 6: Defense Evidence

At this stage the accused will be given an opportunity to leave his evidence. The accused will also be afforded an opportunity to submit his documents in support of his case, as well as witnesses in his support. Accused and his witnesses will be cross examined by the complainant. After this, the case is posted for arguments.

Stage 7: Arguments

The Complainant and the accused or this counsels shall submit their arguments before the Court. During the argument the counsel may submit the precedents of High courts and Supreme Court in support of their case. Usually, a written argument containing a gist of the oral argument is also submitted before the the court.

Stage 8 : Judgment

After the arguments, the case is posted for judgment. if the court finds in favor of the complainant then the accused will be punished with fine or imprisonment. If the court finds in favor of the Accused, then the court will acquit him. If accused is convicted, he will be subjected to arrest or he can move a petition for suspension his sentence for a period of 30 days, so he can file an appeal before the sessions court.

Conditions to be fulfilled for Cheque Bounce case

Legally, certain conditions have to be fulfilled in order to use the provisions of Section 138.

- The cheque should have been drawn by the drawer on an account maintained by him.
- The cheque should have been returned or dishonoured because of insufficient funds in the drawer's account.
- The cheque is issued towards discharge of a debt or legal liability.
- After receiving the notice, if the drawer doesn't make the payment within 15 days from the day of receiving the notice, then he commits an offence punishable under Section 138 of the Negotiable Instruments Act.

Power to direct interim compensation under Section 143A of negotiable Instruments (Amendment) Act 2018

As per the amendment the following provision is inserted to the Act:

"143A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant-

(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

(b) in any other case, upon framing of charge.

(2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973.

(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section."

Section 148 : Power of Appellate Court to order payment pending appeal against conviction

"148. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial Court:

Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143A.

(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.

(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:

Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.".

IMPORTANT ELEMENTS IN CHEQUE BOUNCE CASE

1. Drawing the cheque.
2. Presentation of the cheque to the Bank.
3. Returning the cheque unpaid by the drawee Bank.
4. Payment demand notice issued to the drawer of the cheque
5. Failure of the drawer to make payment within 15 days of the receipt of notice.

ACTS AND LAW GOVERNING CHEQUE BOUNCE CASE

- Negotiable Instrument Act, 1881
- Criminal Procedures Code; 1973
- Indian Evidence Act, 1872,
- The Criminal Rules of Practice and Circular orders, 1990

OTHER ACTS RELATED TO CHEQUE BOUNCE CASE

- Indian Limitation, 1963.
- General Clauses Act 1897.
- Bankers' Books Evidence Act, 1891.
- Bills of Exchange Act, 1882.
- Information Technology Act, 2000.[Electronic Cheque]
- Constitution of India [Rights of Accused]