2018 (4) TMI 1908 - HC - Indian Laws

Dishonor of Cheque - amicably settlement of matter by way of compromise - compounding of offences - whether it is permissible to record the settlement and quash the judgment and order of conviction passed by the trial Court and affirmed by the appellate court? - HELD THAT - The offence punishable under Section 138 NI Act is not an economic offence within the meaning of the economic offence so far as the applicability of Limitation Act 1974 but still it is an offence falling within the compass of offences against property within the meaning of Chapter XVII of Indian Penal Code. Without entering into the point whether existence of mens rea is required to be brought on record legally to bring home the charge against the accused of the offence under Section 138 of NI Act at least can be inferred that the intention of legislature while inserting Section 147 of the NI Act was clear that the aggrieved party can compound the offence. On a plain reading of Section 147 of NI Act it is clear that the same does not confer any obligation to obtain permission for entering into a compromise or to compound the offence. Merely because the litigation has reached to a revisional stage or that even beyond that stage the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage the nature of offence punishable under Section 138 of the NI Act should be treated as if the same is falling under table-II of Section 320 IPC - The country is under the process of and progress towards globalization. So the intention of the legislature and object of enacting Banking Public Financial Institutions and the Negotiable Instrument Laws (Amended Act) 1988 and subsequent enactment i.e. Negotiable Instruments (Amendment Miscellaneous Provisions) Act 2002 leads this Court to a conclusion that the offence made punishable under Section 138 of NI Act is not only an offence qua property but it is also of the nature of an economic offence though not covered in the list of statutes enacted in reference to Section 468 of Cr.P.C. There is no formal embargo in Section 147 NI Act. So this principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under Section 138 of the NI Act is distinctly different from the normal offences made punishable under Chapter XVII of IPC - it is hereby declared that the compromise arrived between the parties to this litigation out of court is accepted as genuine and the order of conviction and sentence passed by the learned JMFC Vadodara and confirmed in appeal by the learned Sessions Judge Fast Track Court Vadodara therefore on the given set of facts are hereby quashed and set aside as this Court intends otherwise to secure the ends of justice as provided under Section 482 Cr.P.C. obviously the order disposing Revision Application would not have any enforceable effect. It is hereby declared that the compromise arrived at between the parties to this litigation out of the court is accepted as genuine and the order of conviction and sentence passed by the 3rd Additional Chief Judicial Magistrate Mehsana dated 15th December 2015 in the Criminal Case No.4109 of 2013 is hereby ordered to be quashed and set-aside - petitions allowed.

Summary

Issues Involved:
1. Quashing of judgment and order of conviction.
2. Settlement and compounding of the offence under Section 138 of the Negotiable Instruments Act.
3. Jurisdiction of the High Court under Section 482 of the Cr.P.C. and Article 226 of the Constitution of India.

Detailed Analysis:

1. Quashing of Judgment and Order of Conviction:
The applicant, the original accused, sought to quash the judgments and orders of conviction passed by the 3rd Additional Chief Judicial Magistrate, Mehsana, dated 15th December 2015, and affirmed by the Sessions Court, Mehsana, on 22nd September 2017. The applicant filed a Criminal Appeal No.3 of 2016, which was dismissed, affirming the trial court's judgment and order of conviction. The appellate court issued a warrant of arrest due to the accused's absence. However, a settlement was reached between the complainant and the applicant before the execution of the warrant.

2. Settlement and Compounding of the Offence under Section 138 of the Negotiable Instruments Act:
The respondent no.2 (original complainant) lodged a complaint against the applicant under Section 138 of the Negotiable Instruments Act. The complainant confirmed the receipt of the entire cheque amount of ?50,000/- and expressed willingness to withdraw all litigations against the applicant. The affidavit submitted by the complainant stated that the dispute was of a personal nature and not against society, and there was no surviving grievance post-settlement. The complainant consented to the quashing of the judgments and orders passed by both the trial and appellate courts.

3. Jurisdiction of the High Court under Section 482 of the Cr.P.C. and Article 226 of the Constitution of India:
The court deliberated whether it could record the settlement and quash the conviction. Citing the case of Kripalsingh Pratapsingh vs. Salvinder Kaur Hardisingh Lohana, the court held that it is permissible for the High Court, under its inherent powers under Section 482 of the Cr.P.C., to recall its earlier order and record the settlement, thereby acquitting the accused. Section 147 of the Negotiable Instruments Act, which allows for the compounding of offences, was highlighted as having an overriding effect over the procedural aspects of the Cr.P.C. The court referred to various precedents, including the Supreme Court's decision in K.Subramanian v. R.Rajathi, which supported the compounding of the offence under Section 138 of the Act even at the appellate or revisional stage.

Conclusion:
The court declared the out-of-court settlement as genuine and quashed the conviction and sentence passed by the 3rd Additional Chief Judicial Magistrate and affirmed by the Sessions Court. The warrant of arrest issued by the trial court was cancelled, and the petition was allowed, making the rule absolute to the extent of quashing the judgments and orders.