Cheque bounce conviction not 'moral turpitude': HC

Holding that dishonour of a cheque issued in personal capacity cannot be treated as an offence of moral turpitude, the Punjab and Haryana High Court has ordered that a dismissed chowkidar — who died while litigating for reinstatement — “shall be deemed to be in service till his death on June 15, 2022”.

Justice Harpreet Singh Brar also directed the release of full service benefits, including gratuity and leave encashment with six interest from the date of filing of the writ petition till actual payment. The Court also directed that his son’s be considered for compassionate appointment strictly under the policy applicable on the date of death.

The judgment came in a petition filed by the wife and son of the deceased employee, whose gratuity and leave encashment were denied on the ground that he had been convicted in a cheque bounce case under Section 138 of the Negotiable Instruments Act. Justice Brar also quashed order dated October 6, 2020, dismissing him from service, and order dated September 16, 2022, rejecting the family’s representation for release of service benefits and compassionate appointment for the son. The Bench made it clear that the criminal case against him stemmed from financial distress, not criminal intent.

Justice Brar made it explicit that conviction under Section 138 could not, by its nature, be equated with crimes that reflect depravity. “The Court does not find it justifiable to categorise a matter involving dishonour of a cheque, issued in a personal capacity, as an offence involving moral turpitude,” the Bench ruled.

Justice Brar also rejected Punjab State Civil Supplies Corporation’s stand that a cheque-bounce conviction was sufficient ground for stripping an employee of terminal dues. “It is not the case of the respondents that the cheques qua which criminal complaints had been filed against the deceased were issued by him in an official capacity to make unlawful gains for himself or cause unlawful loss to respondent-Corporation. As such, no moral turpitude can be attributed to the deceased.”

Justice Brar observed that the employee fell into debt after being dismissed from service on the basis of his first conviction, leaving him without income. Recognising the reality, the court observed: “This Court finds force in the argument led by counsel for the petitioners that the deceased was pushed to borrow money from his acquaintances to avoid starvation as he was unfairly dismissed from service and had no other means of survival”.

The Court also took note of a clarification issued by the Department of Personnel on January 24, 2023, that categorises offences involving moral turpitude — including corruption, narcotics, money laundering, sexual offences against children, trafficking and firearms offences. Justice Brar asserted that cheque dishonour finds no place in that category.

Relying also a plethora of judgments, the Bench held that denial of gratuity and leave encashment solely on the basis of NI Act conviction was unsustainable.

“In view of the discussion, this Court does not find it justifiable to categorise a matter involving dishonour of a cheque, issued in a personal capacity, as an offence involving moral turpitude. Accordingly, the present petition is allowed,” Justice Brar concluded.