2021 (5) TMI 48 - HC - Indian Laws

Dishonor of Cheque - invocation of revisional jurisdiction under Section 397 read with Section 401 of the Code of Criminal Procedure - HELD THAT - The jurisprudence behind the N.I. Act is that the business transactions are honored. The legislative intention is not to send the people to suffer incarceration because their cheque was bounced. These proceedings are to execute the recovery of cheque amount by showing teeth of penalty loss - Given the judgment passed by Hon ble Supreme Court of India in Damodar S. Prabhu v Sayed Babalal 2010 (5) TMI 380 - SUPREME COURT the law is well settled that when the entire money is paid then the complainant cannot have any objection to such compromise and 15% of the cheque amount is to be paid by the accused to the Himachal Pradesh State Legal Services Authority. This Court has inherent powers under Section 482 of the Code of Criminal Procedure further supported by Section 147 of the N.I. Act to interfere in this kind of matter where parties have paid the entire money and where the complainant does not object to clear all the proceedings. Given the entirety of the case and judicial precedents the continuation of these proceedings will not suffice any fruitful purpose whatsoever - thus because of the compromise this is a fit case where the inherent jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure read with 147 of Negotiable Instruments Act is invoked to compound the offence and consequently to quash the proceedings The petitioner is acquitted of the offence under Section 138 of the Act - Petition allowed.

Summary

Issues:
Challenging judgment of conviction under Section 138 of the Negotiable Instruments Act, 1881 - Compromise between parties - Quashing of conviction and proceedings - Payment and receipt of Demand Drafts - Interpretation of N.I. Act - Judicial precedents on compensation and imprisonment - Inherent powers of the Court under Section 482 of CrPC and Section 147 of N.I. Act - Compounding of offence - Payment of compensation - Closure of the petition.

Analysis:
The petitioner challenged the judgment of conviction under Section 138 of the Negotiable Instruments Act, 1881, in the High Court. Both parties acknowledged a compromise, with the petitioner paying two Demand Drafts totaling ?1,80,000. The jurisprudence behind the N.I. Act aims to honor business transactions without causing unnecessary incarceration due to bounced cheques, focusing on recovery rather than punishment.

The Court referred to the case law of Kaushalya Devi Massand v Roopkishore Khore, emphasizing that an offence under Section 138 of the N.I. Act is akin to a civil wrong with criminal implications. The Court cited Damodar S. Prabhu v Sayed Babalal, stating that full payment by the accused renders the complainant unable to object to the compromise, with 15% of the cheque amount to be paid to the Himachal Pradesh State Legal Services Authority.

Utilizing its inherent powers under Section 482 of CrPC and Section 147 of the N.I. Act, the Court intervened due to the full payment and lack of objection from the complainant, deeming the continuation of proceedings fruitless. Quoting Shakuntala Sawhney v Kaushalya Sawhney, the Court highlighted the importance of parties reconciling for the sake of justice.

Consequently, the Court compounded the offence and quashed all proceedings, acquitting the petitioner of the Section 138 offence. The accused was directed to pay compensation of ?4,500 to the HP Legal Aid Authority by a specified date. The petitioner could seek an extension under extraordinary circumstances. Based on the compromise, the petition was closed, and the judgment of conviction along with all consequential proceedings were quashed and set aside.

In conclusion, the Court allowed the petition in line with the terms mentioned, emphasizing the closure of the case following the compromise between the parties.