SC Allows Release of Rs. 3.65 Lakh to Complainant, Relieves Accused from Further Jail Term.


22 September 2025 Negotiable Instruments Act >> Criminal Law  

The Supreme Court has shortened the jail term of a man who was sentenced under Section 138 of the Negotiable Instruments Act (NI Act) after the appellant paid the full compensation for the amount of the dishonoured cheque. The Court partly granted the appeal, freeing the appellant from undergoing the rest of his one-year term.

The appeal was brought by C. Palanisamy, was a result of an order of 2024 of the Madras High Court that had confirmed his conviction and ordered his arrest. During the hearing of the case, the Supreme Court had already granted him bail on the condition of paying a part of the compensation. During subsequent hearings held during May and August 2025, Palanisamy deposited Rs. 2.50 lakh in cash with the Supreme Court Registry, besides Rs. 1.15 lakh already deposited earlier before Judicial Magistrate Court, Pollachi.


 

 
 
 

When the case was heard on September 22, 2025, the respondent, P. Muthuraj, informed through counsel that he would not insist on additional imprisonment in light of the compensation made. The Court also observed that the appellant had already spent close to two months in custody.

Consequently, a Bench of Justice Sanjay Kumar and Justice Alok Aradhe granted the appeal partly by commuting the sentence to the duration of the imprisonment already served. The Court also ordered the respondent, P. Muthuraj, be compensated with the full amount of Rs. 3.65 lakh deposited in the courts as well as interest accrued thereon despite the minor variances in his registered father's name and residence.

The ruling effectively brings to a close a 2007-standing dispute, balancing financial reparations with minimal punitive imprisonment.


Section 138, Negotiable Instruments Act - 1881  

Negotiable Instruments Act, 1881