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P. Chandrakala v. K. Narender & Anr.

Criminal Appeal · 2017 INSC 661Decided 24 Jul 2017
Criminal Appeal No. 1241 of 2017
Justice J. Chelameswar · Justice S. Abdul Nazeer

Background

The respondent had filed a private criminal complaint alleging the appellant borrowed Rs. 5 lakh from him and, on failing to repay, issued a post-dated cheque for Rs. 7 lakh that bounced for insufficient funds. The trial court convicted her under Section 138 of the Negotiable Instruments Act, sentencing her to six months' imprisonment plus a Rs. 7 lakh compensation order, and her appeal and revision before the Sessions Court and the Telangana/Andhra Pradesh High Court were both dismissed.

Decision Breakdown

By the time the matter reached the Supreme Court, the parties informed the Court that the dispute had been fully settled: the appellant had paid the entire amount and the complainant had no objection to the conviction being set aside. The Court allowed the parties to compound the offence, set aside the conviction of both the trial court and appellate courts, and acquitted the appellant. However, because the appellant had consumed the Court's and the justice system's time over a dispute that was ultimately settled, the Court imposed exemplary costs of Rs. 1 lakh, payable to a named orphanage, with the conviction reviving automatically if she failed to pay and prove payment within the stipulated time.

Lesson Learnt

Even when a cheque-bounce case is settled and the conviction is set aside by compounding, a party who dragged the matter through multiple courts despite an eventual settlement can be made to pay exemplary costs: settlement does not erase the cost of wasted judicial time.

Official source (sci.gov.in)View Judgment (PDF)

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