The amounts locked in some 4 million cheque-bouncing cases pending in courts must be equal to the figures involved in a few scams or the dirty money cached in tiny spots around the globe. Magistrates and criminal courts are unable to cope with them. The sombre state of the economy indicates that the situation is unlikely to improve despite efforts to fast-track these cases.
The drawers and payees show inexhaustible ingenuity in raising technical and even constitutional issues. Some of them have reached the Supreme Court, and a few of them have been referred to larger Benches. One issue that has the tendency to raise its head repeatedly is the question of double jeopardy. This was exhaustively discussed by the Supreme Court last fortnight in the case, Sangeetaben vs State of Gujarat.
A cheque issued for the repayment of a loan was dishonoured by the bank. The payee filed a complaint under Section 138 of the Negotiable Instruments Act. He went ahead and filed complaints of breach of trust, cheating and abetment — which are offences under the Indian Penal Code. The drawer of the cheque was convicted under the bank law, though an appeal is pending. Then he moved the high court for quashing the criminal complaints under the penal code since he has already been prosecuted under the bank law.
This raises the question of double jeopardy. It is an age-old principle, recognised in ancient Greek and Roman jurisprudence. In India, Article 20 (2) of the Constitution says no person shall be prosecuted and punished for the same offence more than once. At least three major statutes incorporate the doctrine. There are strong reasons for providing this protection to people. It prevents the government from exercising its power to wear down and convict innocent people. Citizens are protected from the financial, emotional and social consequences of successive prosecutions. The principle also gives finality to criminal proceedings.
In cases of cheque bouncing, there seems to be a thin line, hardly visible to lay eyes, which separates a valid prosecution of the accused person and the illegal course of double jeopardy. It is the issue of the cheque that is the main cause of action. However, behind it, there might be cheating and breach of trust. The aggrieved payee is likely to take all coercive measures against the drawer, not only to get back his money but also to punish him.
In the latest case, the Supreme Court maintained that both proceedings can go on simultaneously. This is because the bank law and the code operate in different fields. For instance, there is no need to prove the guilty mind of the accused person in the case of a dishonoured cheque. But in cheating and breach of trust, it is essential to prove this. Further, punishment for offences under the code is severe. In the cheque case, a fine may be imposed to meet the liability. The cheque complaint is initiated by an aggrieved person, whereas in the other instances, it is the state that takes action.
However, there are judgments of the Supreme Court itself that take a liberal, contrary view. Last year, in the case, Kolla Veera vs Gorantla Rao, the court quashed the second wave of charges after the accused person was convicted for a bad cheque. He argued that he had already been convicted under the bank law and, hence, could not be tried again on the same facts for cheating or other provisions of the penal code. The court agreed.
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That judgment reasoned like this: Article 20(2) of the Constitution only states that no one can be prosecuted for the same offence again. However, Section 300(1) of Criminal Procedure Code goes a step ahead. It states that no one can be tried and convicted for the same offence or even for a different offence but on the same facts.
Similarly, in the case G Sagar Suri vs State of UP, the court quashed the criminal proceedings for cheating and breach of trust when the cheque-bounce case was going on, observing that it would amount to abuse of the process of law.
The question of double jeopardy comes up in economic offences under the Income-Tax Act, the Customs Act or the Foreign Exchange Regulation Act. Precedents can be cited for both points of view. In last year’s case, Radheshyam vs State of W Bengal, the accused person had suffered an adverse departmental verdict in a foreign exchange case. The Supreme Court barred a second round in a regular court observing that it would be unjust and an abuse of process of the court to permit the Enforcement Directorate to continue with the criminal prosecution on the same set of facts.
The slim differences between the two lines of judgments on double jeopardy place the drawer of the bounced cheque at the crossroads of freedom and jail. He faces triple jeopardy.