2021 (1) TMI 852 - HC - Indian Laws

Dishonor of Cheque - seeking permission to compound the offence under Section 147 of the N.I Act and also reporting the settlement of the matter between the parties - HELD THAT - The parties have settled the matter out of their own volition with free consent and keeping their mutual interest under consideration, as such, they may be permitted to compound the offence under Section 147 of the N.I. Act. Section 147 of N.I. Act has made every offence punishable under the N.I. Act as compoundable. As such, there is no bar for the parties in the proceeding to compound the offence - However, at the same time the guidelines laid down by Hon'ble Apex Court in Damodar S. Prabhu v. Sayed Babalal H 2010 (5) TMI 380 - SUPREME COURT regarding imposing graded cost on litigant also to be borne in mind - According to the said Judgment in Damodar S. Prabhu's Case, if the application for compounding is made before the Sessions Court or High Court in revision or appeal, such compounding is permitted to be allowed on the common condition that the accused pays 15% of the cheque amount by way of cost. Application allowed.

Summary

Issues:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Appeal against the conviction in the Sessions Judge's Court.
3. Settlement between the parties.
4. Application for compounding the offence under Section 147 of the N.I. Act.
5. Guidelines for compounding as per Damodar S. Prabhu v. Sayed Babalal H case.
6. Judgment and order on sentence by the Trial Court and Sessions Judge's Court.
7. Acquittal and graded cost payment.

Analysis:
The accused was convicted under Section 138 of the Negotiable Instruments Act, 1881 by the Trial Court and sentenced to pay a fine with the default provision of imprisonment. An appeal was made to the Sessions Judge's Court, which upheld the conviction and sentence. The accused then filed a revision petition challenging the judgments. The complainant alleged dishonor of a post-dated cheque issued by the accused for a business transaction, leading to the legal proceedings.

The legal representatives of the deceased complainant were involved in the case, represented by their counsel. Both parties, along with their counsels, filed a joint memo seeking permission to compound the offence under Section 147 of the N.I. Act, indicating a settlement between them. The settlement involved the accused paying a specific sum to the complainant, leading to the request to set aside the previous judgments and order on sentence.

Considering the joint memo and submissions from both sides, the court acknowledged the voluntary settlement between the parties and permitted the compounding of the offence under Section 147 of the N.I. Act. The court referred to the guidelines from Damodar S. Prabhu v. Sayed Babalal H case, specifying a graded cost requirement for compounding applications before the Sessions Court or High Court.

The court allowed the compounding of the offence, subject to the accused paying a specified sum as graded cost within a given timeframe. Upon payment, the judgment of conviction and order on sentence from the Trial Court and Sessions Judge's Court were set aside, resulting in the accused's acquittal from the alleged offence under Section 138 of the N.I. Act. The court directed the accused to pay the remaining balance of the graded cost within a specific period.

Non-compliance with the payment of the graded cost within the stipulated time would render the order ineffective. The court instructed the registry to send copies of the order to the Trial Court and Sessions Judge's Court for further action based on the payment status. The judgment highlighted the importance of adhering to the payment requirements for the compounding order to take effect and benefit the accused.