2022 (7) TMI 512 - HC - Indian Laws

Dishonor of Cheque - compounding of offences - amicable settlement arrived between the parties - Section 138 of NI Act - HELD THAT - Though order directing the petitioner-accused to deposit the compounding fee with the District Legal Services Authority passed by the learned Sessions Judge appears to be in terms of guidelines framed by the Hon ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. 2010 (5) TMI 380 - SUPREME COURT , but since parties herein have mutually agreed to resolve their dispute amicably and respondent has no objection in compounding the offence without there being payment of compounding fee, this Court without going into the correctness of the order deems it fit to modify the order dated 10.7.2021, passed by the learned Sessions Judge to the extent that petitioner shall not be liable to pay any compounding fee as ordered by the court below. This court finds merit in the present petition and accordingly, same is allowed.

Summary

Issues involved:
1. Modification of order compounding the offence by the learned Sessions Judge
2. Applicability of compounding fee as per guidelines

Analysis:
1. The petitioner, aggrieved by the order of the learned District and Sessions Judge allowing the compounding of the offence subject to the deposit of 20% of the cheque amount, approached the High Court under Section 482 Cr.PC seeking modification of the said order. The respondent, represented by an advocate, had no objection to the modification as the entire cheque amount had already been received through a compromise before the Lok Adalat. The petitioner contended that since the matter was amicably resolved for a sum of Rs. 3,50,000 before the Lok Adalat, there was no basis for the imposition of the compounding fee by the Sessions Judge.

2. The High Court, after considering the arguments of both parties and examining the material on record, found that the respondent had filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioner-accused for dishonoring a cheque due to insufficient funds. The Chief Judicial Magistrate had convicted and sentenced the accused based on the evidence presented. However, during the appeal process, the parties reached a compromise before the Lok Adalat, leading to the payment of the entire cheque amount by the accused. The respondent confirmed before the Sessions Judge that no further recovery was required, indicating a resolution of the dispute.

3. The learned Sessions Judge, on July 10, 2021, allowed the parties to compromise and compounded the offence, directing the petitioner to deposit 20% of the cheque amount as costs with the District Legal Services Authority. While acknowledging that the compounding fee was in line with guidelines set by the Supreme Court, the High Court noted that both parties had mutually agreed to settle the matter without the payment of the fee. Therefore, the High Court decided to modify the order of the Sessions Judge, absolving the petitioner from the liability to pay any compounding fee.

4. Consequently, the High Court allowed the petition, modifying the order of the District and Sessions Judge to remove the requirement of the compounding fee. The judgment highlighted the importance of parties reaching an amicable resolution and the Court's discretion to adjust orders accordingly. The petition was disposed of in favor of the petitioner, emphasizing the significance of mutual agreement in resolving legal disputes.