Negotiating on the Negotiable Instruments Amendment Act 2018

Rule of law” giving way to “Rule of commerce” is a worldwide vogue and it shouldn’t be embarrassing if the same phenomenon happens in case of a law which was introduced for the sake of commercial expediency. The question is, whether the set of rules and judicial principles considered as inviolable essentials of legal Jurisprudence is worthy to be discarded, as they have become a burden on the commercial philosophy of business.

The customs, usages, practices of the merchants and traders, adopted by the legislature and ratified by the decisions of courts, is in short, the Negotiable Instruments Act 1881, as we see it now. If we follow the history of amendments in the Negotiable instruments Act, probing for a reason for their necessity, it’s apparent that the law was always responding to the challenges espoused by the trading community through these amendments. The fact that 2018 amendment is not an exception to this rule is no reason to be amazed. This time legislative off-roading is at the base of the garden of Justice. Let’s examine the damage.

The Negotiable Instruments Amendment Act 2018 introduces to the legislative book, two new sections. Section 143 A and Section 148 which reads as follows.

Section 143 A. Power to direct interim compensation. (1) Not withstanding anything contained in code of criminal procedure, 1973(2 of 1974) the court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant-

  1. In a summery trial or a summons case, where he pleads not guilty to the accusation made in the complaint.
  2. In any other case upon framing charge.

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

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

(4) If the drawer of the cheque is acquitted, The court shall direct the complainant to repay the drawer of 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(2 of 1974).

(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 421 of the code of criminal procedure 1973(2 of 1974) 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.-(1) Notwithstanding anything contained in the code of criminal procedure, 1973(2 of 1974) 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 percent of the fine or compensation awarded by the trial court:

Provided that the amount payable under this subsection 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”

The purport and purpose of these two sections is to give “Interim compensation” to the Payee of the cheque, both at the trial stage and at the appellate stage. The reason for the amendment may sound harmless and perfectly in tune with the justice of trade.  But what militates against the concept of legal justice is the statutory condition enabling the court to impose a monetary burden on an accused based on the allegation made against him, before trial. It seems that the Legislature, intoxicated by the overdose of commercialization has lost sight of the fact that section 138 coming under Chapter XVII of the Negotiable instruments Act 1881 is a penal provision in which the accused cannot be made to suffer, even for a temporary period, the consequence of his alleged illegal act before trial. The payment of “Interim compensation”, in effect is a sentence, teaser trailer, and is against the basic principle of criminal jurisprudence, that the accused shall be presumed innocent until found guilty by a competent court.

It’s true that there are legislations creating absolute liability, doing away with the need of a guilty mind and negating the requirement of “mens rea” in criminal offences, like Section 29 of the PROTECTION OF CHEILDREN FROM SEXUAL OFFENCES ACT 2012-(POCSO ACT) Etc. Such legislations presume a guilty mind and it is for the accused to prove the contrary, that he is innocent. Courts have tolerated and upheld such legislations as valid, even though literarily against the judicial doctrine of presumed innocence of the accused, only considering the sociology of law, that such legislation was need of the hour. It was an active judiciary overlooking the damage to the doctrine of Innocence for a larger social purpose and such an approach is perfectly justified considering the object to be achieved through such legislations.

The situation here is different. It is not the presumption of guilt that matters. An accused is made to suffer an advance punishment before trial. This pre-delivery of legal consequence before a lawful climax of a judicial process is perfectly alien to the judicial system we follow. The aforementioned practice doesn’t seem to be supported by any authoritative precedent, practice or judicial doctrine. Rather it seems to be a new rule conceived for commercial compulsion. The pretrial payment, the accused has to make, as a token of proposed punishment in advance, is a blatant violation of natural law, Justice and against the very spirit of criminal jurisprudence. 

When offended by a travesty of a statue, on criminal jurisprudence, every lawyer becomes an instinctive critic, goggling for anomalies within the legislation to taint it to trash and when viewed from this angle some more provisions seems ambiguous and meaningless.

The fact that the accused is made to make a pretrial payment of Interim compensation” as a token of proposed punishment, in advance, can be ordered to be retuned, if the accused is acquitted by the court, does not mitigate the gross injustice which is done to the cherished rights of the accused and also to the essential of Judicial principles.

Further Section 143 A (5) provides that 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(2 of 1974), keeping at an  equal footing the complainant and the accused in the matter of recovery of the amount paid by them as per the ordered by the court. There is no such provision in the Appellate stage under section 148 making it absolutely ambiguous as to how the amount deposited by the Appellant and released to the complainant/ respondent as “interim compensation” shall be recovered if the appellant is acquitted. The word “Under this section” appearing in Section 143 A (5) is a conscious deliberation by the legislature, confining the relief of recovery of “interim compensation” paid as per the order of the court, only to the amount deposited at the trial stage. The reason or this discrimination doesn’t seem to have any bearing on the object of the amendment.

It true that every aspect of the society is intruded by commercial interest, which in course of time, sets a benchmark for human conduct and later for the law to follow. There seems to be no escape for the “rule of law” from this “rule of commerce”. It is also acceptable that in a globalized economy banking system should be strong and cheques should be given a commercial sanctity at par with cash or other modes of cashless payment and Dishonor of cheques should be treated as a disgrace to healthy commerce and has to be eradicated as if a disease. What is Unacceptable is the possibility of this commercial crusade against dishonor of cheques culminating as a “Dishonor” and “disgrace” to the legal system.

The author can also be reached at Sreejithcherote@gmail.com.

 

sreejith cherote 
on 04 October 2018
Published in Others
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