2021 (9) TMI 149 - HC - Indian Laws

Dishonor of Cheque - 15% of the cheque amount is to be paid by the complainant to the Himachal Pradesh State Legal Services Authority - parties prays that the matter be compounded in terms of the judgment passed by the Hon'ble Supreme Court of India in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. 2010 (5) TMI 380 - SUPREME COURT - HELD THAT - The jurisprudence behind the N.I. Act is that the business transactions are honoured. The legislative intention is not to send the people to suffer incarceration because their cheque was bounced. These proceedings are simply to execute the recovery of cheque amount by showing teeth of penalty loss - This Court has inherent powers under Section 482 of the Code of Criminal Procedure which are 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. The continuation of these proceedings will not suffice any fruitful purpose whatsoever - in view 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. The petitioner-accused shall deposit the aforesaid 15% of the cheque amount before the Himachal Pradesh State Legal Services Authority, on or before 10.11.2021. The amount deposited before the trial court shall be released to the complainant, on furnishing bank account number - petition disposed off.

Summary

Issues:
- Compromise between petitioner/convict and respondent/complainant
- Quashing of conviction under Section 138 of the Negotiable Instruments Act
- Payment of 15% of the cheque amount to Himachal Pradesh State Legal Services Authority
- Exercise of inherent powers under Section 482 of the Code of Criminal Procedure

Analysis:
The judgment pertains to a case where the petitioner, convicted under Section 138 of the Negotiable Instruments Act, entered into a compromise with the complainant. The compromise involved the payment of a specified amount by the petitioner to the complainant, leading to a request for setting aside the conviction and quashing of proceedings. The compromise deed indicated the satisfaction of the complainant, who expressed a desire to close the matter. The parties sought the compounding of the offence in line with the Supreme Court's ruling in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663.

The Court acknowledged the legislative intent behind the N.I. Act to ensure the honor of business transactions while avoiding unnecessary incarceration due to bounced cheques. Relying on its inherent powers under Section 482 of the Code of Criminal Procedure, the Court intervened considering the full payment made by the parties and the complainant's lack of objection to clearing the proceedings. The judgment emphasized the futility of continuing the proceedings in light of the compromise and legal precedents.

Citing the Supreme Court's observation in Shakuntala Sawhney v. Kaushalya Sawhney, the Court highlighted the importance of parties reconciling and reaching a settlement. Consequently, the Court quashed the conviction and set aside the judgment passed by the Sessions Judge, leading to the petitioner's acquittal under Section 138 of the Act. The Court directed the petitioner to deposit 15% of the cheque amount with the Himachal Pradesh State Legal Services Authority, in accordance with the guidelines laid down in Damodar S. Prabhu case.

In conclusion, the judgment disposed of the petition and any pending applications, emphasizing the significance of parties reaching a compromise and the Court's authority to intervene in such matters to promote justice and settlement.