New Win Export and Anr. v. A. Subramaniam

Hello connections, while searching through recent judgments, I found something relevant that I'd like to share with you all.

In a landmark judgment in the case of New Win Export and Anr. v. A. Subramaniam (July 2024), the Supreme Court has reinforced the compensatory nature of the remedy under the Negotiable Instruments Act, 1881 (NI Act), over its punitive aspect. The bench, comprising Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah, highlighted the importance of ensuring the reliability of cheques and encouraged courts to facilitate settlements in cheque bounce cases, provided both parties are willing.

According to Section 147 of the NI Act, all offences under this act are compoundable, meaning they can be settled amicably. The Supreme Court opined that such settlement agreements should be considered as compounding of the offence. Furthermore, as per Section 320(5) of the CrPC, compounding after conviction requires the Court's approval where the appeal against the conviction is pending.

In this case, the accused and complainant reached a lawful settlement, which was deemed genuine by the Court. Consequently, the Supreme Court decided that maintaining the conviction would serve no purpose, and it should be set aside.

The Court emphasized that cheque dishonour is a regulatory offence intended to uphold public trust in these financial instruments. With a significant backlog of such cases burdening the judiciary, the Court reiterated that the compensatory remedy should take precedence, urging courts to support compounding of offences under the NI Act when parties are agreeable.

This judgment underscores the judicial system's focus on practical resolutions and reducing case backlog, enhancing the overall efficiency of legal proceedings in financial disputes.

#SupremeCourt #LegalUpdate #NegotiableInstrumentsAct #ChequeBounce #LegalReform

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