2022 (1) TMI 708 - HC - Indian Laws

Dishonor of Cheque - dispute is settled between the parties and the complainant has no objection if the complaint is set aside - HELD THAT - Having gone through the material placed on record, it has emerged that the applicant has been convicted by the concerned Criminal Court for the offence punishable under Section 138 of the N.I. Act. However, now, the parties have amicably settled the dispute and, therefore, the complainant has filed an affidavit stating that if the order of conviction passed against the applicant is quashed and set aside, he has no objection. When the parties have settled the dispute amicably, compounding of the offence is required to be permitted - reliance can be placed in the case of DAMODAR S. PRABHU VERSUS SAYED BABALAL H. 2010 (5) TMI 380 - SUPREME COURT . Respondent No.2 filed a complaint under Section 138 of the N.I. Act for dishonour of the cheque amounting to ₹ 1,32, 000/-. Therefore, as per the decision rendered by the Honourable Supreme Court, the applicant is required to deposit 15% of the amount of the cheque with the Gujarat State Legal Services Authority - application allowed.

Summary

Issues involved:
Application under Section 482 of the Code of Criminal Procedure seeking quashing of judgment and order of conviction under Section 138 of the Negotiable Instruments Act, 1881 based on settlement between parties.

Analysis:

1. Nature of Application:
The application was filed under Section 482 of the Code of Criminal Procedure to quash the judgment and order of conviction passed by the Additional Judicial Magistrate First Class in a case involving dishonour of a cheque under Section 138 of the Negotiable Instruments Act, 1881.

2. Contentions of the Applicant:
The applicant, through their advocate, argued that a settlement had been reached with the complainant, and the complainant had filed an affidavit stating no objection to setting aside the conviction. The applicant expressed readiness to deposit the required amount with the Gujarat State Legal Services Authority.

3. Legal Precedents and Submissions:
The applicant's advocate relied on the decision of the Supreme Court in Damodar S. Prabhu Vs. Sayed babalal H. and a previous order of the High Court in a similar matter, emphasizing that compounding of the offence under Section 138 of the N.I. Act is permissible post-conviction under certain conditions.

4. Respondent's Position:
The respondent's advocate acknowledged the settlement between the parties and confirmed that the complainant had no objection to quashing the impugned judgment.

5. Judicial Analysis and Decision:
The Court considered the settlement between the parties and cited previous judgments to support the view that compounding of the offence should be allowed when parties settle amicably. Referring to the guidelines issued by the Supreme Court, the Court directed the applicant to deposit 15% of the cheque amount with the Gujarat State Legal Services Authority within four weeks for the order to take effect.

6. Final Order:
The Court allowed the application, quashing the judgment and order of conviction, and directed the applicant to deposit 15% of the cheque amount with the Legal Services Authority within the specified timeframe. The Rule was made absolute accordingly.

This comprehensive analysis highlights the legal proceedings, arguments presented by both parties, reliance on legal precedents, and the final decision of the Court based on the settlement between the parties and relevant legal principles.