Rajeswary v. State of Kerala is a recent case that was decided by the Kerala High Court with respect to Section 138 of the Negotiable and Instruments Act, 1881 which is a penal provision that deals with the punishment of dishonor of cheque. Under S 138 of the NI Act, if the drawer of the cheque fails to pay the debt within 15 days of the receipt of the notice served to them, such a person shall be punishable with imprisonment for a term of 2 years, or with a fine which may be twice the amount of the cheque, or both.
In the instant case, the accused was granted permission to pay a fine of Rs. 7,17,000 in the trail court as compensation within a 6-month period. However, the accused directly paid the amount to the complainant, which was subsequently acknowledged by the complainant. The trial court dismissed it on the grounds that the accused had been instructed to pay the amount directly in the trial court and hence, the receipt of payment acknowledged by the complainant cannot be accepted.
The accused filed an appeal in the High Court wherein Justice Viju Abraham opined that the Magistrate cannot insist that the amount should be paid in court if the complainant has claimed that they are satisfied with the compensation received as well as filed an affidavit in court stating the acknowledgment of the receipt. Therefore, the Kerala High Court held that an accused in the case of dishonor of cheque under S138 of the NI Act, can pay the fine amount directly to the complainant and the court has to make an entry regarding hte settlement between both parties and cannot ask the accused to pay the amount directly in the court.
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