2024 (8) TMI 1391 - SCH - Indian Laws

Dishonour of Cheque - compounding of offence u/s 138, N.I. Act - core contention of the appellant is that an offence under Section 138 of the N.I. Act is not compoundable under Section 320 Cr.P.C., and in such circumstances, the application was rightly dismissed by the Trial Court. Ergo, invoking the power under Section 482 Cr.P.C., coupled with those under Section 147, N.I. Act - HELD THAT - A bare perusal of Section 482, Cr.P.C., and Section 147, N.I. Act would reveal they are different and distinct. The former being the inherent power of High Court exercisable even suo motu to give effect to any order under Cr.P.C., or to prevent abuse of the process of any court or otherwise to secure the ends of justice. However, the provision for compounding every offence punishable under the N.I. Act, under Section 147, N.I. Act, is not a power available to a Court to exercise without the consent of the complainant. It is thus well-neigh settled position that the inherent powers under Section 482, Cr.P.C., are invocable when no other efficacious remedy is available to the party concerned and not where a specific remedy is provided by the statute concerned. The High Court had clearly fallen in error in invoking the power under Section 482, Cr.P.C., as also the power under Section 147, N.I. Act, to compound the offence under Section 138 of the N.I. Act qua the respondent-accused. Hence, the impugned judgment to the extent it compounded the offence under Section 138, N.I. Act invoking the inherent power under Section 482, Cr.P.C. and the power under Section 147, N.I. Act stands quashed and set aside. There is no point in restoring the proceedings and to permit their continuance before the trial Court - Appeal disposed off.

Issues Involved:
1. Compounding of the offence under Section 138 of the Negotiable Instruments Act, 1881.
2. Invocation of powers under Section 482 of the Code of Criminal Procedure, 1973.
3. Requirement of consent for compounding the offence under Section 138 of the N.I. Act.
4. Application of Article 142 of the Constitution of India.

Detailed Analysis:

1. Compounding of the offence under Section 138 of the Negotiable Instruments Act, 1881:
The appellant filed Complaint Case No. 5564 of 2022 alleging an offence under Section 138 of the N.I. Act against the respondents. The respondents sought to compound the offence by filing an application under Section 320 of the Cr.P.C. The Trial Court dismissed this application. The High Court, however, compounded the offence under Section 138, N.I. Act, by invoking its inherent powers under Section 482, Cr.P.C., and Section 147, N.I. Act, subject to the respondents depositing the cheque amount with interest and an additional sum.

2. Invocation of powers under Section 482 of the Code of Criminal Procedure, 1973:
The High Court compounded the offence under Section 138, N.I. Act, using its inherent power under Section 482, Cr.P.C. The Supreme Court examined the scope of Section 482, Cr.P.C., which allows the High Court to make orders necessary to prevent abuse of the process of any court or to secure the ends of justice. However, it was emphasized that this power should be exercised sparingly and with caution.

3. Requirement of consent for compounding the offence under Section 138 of the N.I. Act:
The core contention was whether the offence under Section 138, N.I. Act, could be compounded without the complainant's consent. The Supreme Court referred to several precedents, including JIK Industries Ltd. v. Amarlal V. Jumani, which held that compounding under Section 147, N.I. Act, requires the complainant's consent. The High Court's decision to compound the offence without the complainant's consent was found to be contrary to established legal principles.

4. Application of Article 142 of the Constitution of India:
The Supreme Court noted that while it has the power under Article 142 to do complete justice, this power is not available to High Courts. The High Court's decision to compound the offence was set aside, but considering the peculiar circumstances, the Supreme Court invoked its power under Article 142 to quash the proceedings to avoid unnecessary litigation, given that the respondents had deposited the requisite amounts.

Conclusion:
The Supreme Court quashed the High Court's decision to compound the offence under Section 138, N.I. Act, without the complainant's consent, emphasizing that such compounding requires the complainant's consent. However, to do complete justice, the Supreme Court invoked Article 142 to quash the proceedings, allowing the appellant to withdraw the deposited amounts. The appeals were disposed of accordingly.

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