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2022 (2) TMI 299 - HC - Indian LawsDishonor of Cheque - amicable settlement of dispute - compounding of offences - offence punishable under Section 138 of the N.I. Act - HELD THAT - 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. In the case of DAMODAR S. PRABHU VERSUS SAYED BABALAL H. 2010 (5) TMI 380 - SUPREME COURT , the Honourable Supreme Court has held that if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. Thus, when the parties have settled the dispute amicably, compounding of the offence is required to be permitted. Accordingly, the application is allowed.
Issues:
Application under Section 482 of the Code of Criminal Procedure to quash judgment and order convicting the applicant for an offence under Section 138 of the Negotiable Instruments Act, 1881. Detailed Analysis: 1. Settlement between the Parties: - The applicant sought to quash the judgment and order convicting him under Section 138 of the N.I. Act, citing an amicable settlement with the complainant. - Both parties, through their advocates, confirmed the settlement, and the complainant expressed no objection to quashing the conviction. 2. Legal Precedents and Guidelines: - The applicant relied on the Supreme Court's decision in Damodar S. Prabhu Vs. Sayed Babalal H. and a previous order of the High Court to support the permissibility of compounding the offence post-conviction under certain conditions. - The Court referred to specific guidelines issued by the Supreme Court regarding compounding of offences under Section 138 of the N.I. Act at different stages of legal proceedings. 3. Court's Decision: - Considering the settlement between the parties and the legal precedents cited, the Court allowed the application under Section 482 of the CrPC and quashed the judgment and order of conviction. - The Court directed the applicant to deposit 15% of the cheque amount with the Gujarat State Legal Services Authority within four weeks to give effect to the order, in line with the Supreme Court's guidelines. 4. Judicial Observations: - The Court referred to its previous decision in a similar matter and emphasized the importance of inculcating faith in banking operations and the compounding provisions under Section 138 of the N.I. Act. - The Court highlighted the need for justice and the exercise of inherent powers under Section 482 of the CrPC in unique circumstances where settlement between parties is reached post-conviction. 5. Conclusion: - The Court allowed the application, quashed the conviction, and directed the applicant to deposit the required amount with the Legal Services Authority within a specified period. - The judgment sets a precedent for allowing compounding of offences under Section 138 of the N.I. Act post-conviction based on settlements between parties, ensuring justice and efficient resolution of disputes. This detailed analysis encapsulates the key aspects of the judgment, including the settlement between parties, legal precedents, the Court's decision, judicial observations, and the overall conclusion regarding the application under Section 482 of the CrPC.
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