2004 (8) TMI 416 - SC - Companies Law

Compounding of offence punishable under section 138 of the Negotiable Instruments Act, 1881 - Held that - Allow appeal. Such a compounding of the offences on the basis of parties settling their dispute is permissible. Since the respondent states that he is willing to compound the offence direct that the offences be compounded as provided under section 147 of the Negotiable Instruments Act, 1881.

Summary

Issues:
Conviction under section 138 of the Negotiable Instruments Act, 1881; Appeal against conviction and sentencing; Compounding of offense under section 147 of the Negotiable Instruments Act, 1881; Return of deposited sum post-settlement.

Conviction under section 138 of the Negotiable Instruments Act, 1881:
The appellant was convicted by the XIII Additional Chief Metropolitan Magistrate for an offense under section 138 of the Negotiable Instruments Act, 1881, and was sentenced to pay a fine of Rs. 20,000 or undergo simple imprisonment for four months in default. This formed the basis of the legal proceedings.

Appeal against conviction and sentencing:
The appeal against the trial court's judgment was dismissed by the First Additional Sessions Judge, and a criminal revision petition was partly allowed by the High Court, which directed the appellant to pay a fine twice the cheque amount or undergo simple imprisonment for one year in default. The High Court's order was challenged in the Supreme Court through this appeal.

Compounding of offense under section 147 of the Negotiable Instruments Act, 1881:
During the pendency of the appeal, the parties settled their dispute, and the respondent expressed willingness to compound the offense. Citing the provision of section 147 of the Negotiable Instruments Act, the Supreme Court referred to a previous case where compounding offenses based on party settlement was allowed. Consequently, the Supreme Court allowed the appeal and directed the compounding of the offenses as per the Act.

Return of deposited sum post-settlement:
The appellant had deposited a sum of Rs. 20,000 as per the trial court's direction. Following the settlement, the appellant sought to withdraw this amount. The Supreme Court directed the trial court to return the deposited sum to the appellant, considering the settlement and subsequent events. As a result, the sentence imposed on the appellant was set aside, and the appeal was allowed.