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2025 (4) TMI 748 - HC - Indian LawsDishonour of Cheque - petitioner-accused could be acquitted of the conviction under Section 138 of the Negotiable Instruments Act 1881 following a compromise with the complainant - compounding of offence - HELD THAT - Having taken note of the fact that the petitioneraccused and the respondent (complainant) have settled the matter vide Compromise Deed Annexure A-1 and the complainant/respondent has no objection in compounding the offence therefore this Court sees no impediment in accepting the prayer made on behalf of the accused-petitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon ble Apex Court in Damodar S. Prabhu vs. Sayed Babalal 2010 (5) TMI 380 - SUPREME COURT wherein the Hon ble Apex Court has held Section 147 of the Negotiable Instruments Act 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 of the CrPC which states that No offence shall be compounded except as provided by this Section . A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Indian Penal Code also cannot be compounded. However since Section 147 was inserted by way of an amendment to a special law the same will override the effect of Section 320(9) of the CrPC especially keeping in mind that Section 147 carries a non obstante clause. In K. Subramanian vs. R. Rajathi 2009 (11) TMI 1013 - SUPREME COURT it has been held by the Hon ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C. compromise arrived at can be accepted even after recording of the judgment of conviction. Since in the instant case the petitioner-accused after being convicted under Section 138 of the Act has compromised the matter with the complainant/respondent prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon ble Apex Court. Conclusion - i) Section 147 of the Negotiable Instruments Act allows for the compounding of offenses overriding the general rule under the CrPC. ii) The Court has the discretion to reduce the compounding fee based on the financial condition of the petitioner and the specific facts of the case. iii) Compounding of the offense is permissible even after conviction if both parties agree to a settlement. The present matter is ordered to be compounded and the impugned judgment of conviction and order of sentence dated 08.12.2023 passed by learned Judicial Magistrate First Class Nahan District Sirmaur H.P. are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act. Bail bonds if any stand discharged - petition disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment were:
ISSUE-WISE DETAILED ANALYSIS Compounding of Offense under Section 138 of the Negotiable Instruments Act Relevant legal framework and precedents: The judgment primarily relied on Section 147 of the Negotiable Instruments Act, 1881, which allows for the compounding of offenses under this Act. The Court also referred to precedents set by the Hon'ble Apex Court in Damodar S. Prabhu vs. Sayed Babalal H. and K. Subramanian vs. R. Rajathi, which provided guidelines for compounding offenses and the imposition of compounding fees. Court's interpretation and reasoning: The Court acknowledged the compromise between the petitioner and the complainant as per the Compromise Deed, Annexure A-1. It recognized the authority granted by Section 147 of the Act, which permits compounding of offenses notwithstanding the provisions of the Code of Criminal Procedure. The Court emphasized that the compounding of offenses under the Negotiable Instruments Act is an exception to the general rule under the CrPC, which typically does not allow for compounding after conviction. Key evidence and findings: The Court took into account the statements made by the petitioner and the complainant's authorized representative, confirming the settlement of the matter and the receipt of the agreed compensation amount by the complainant. Application of law to facts: Given the settlement between the parties and the provisions of Section 147 of the Act, the Court found it appropriate to allow the compounding of the offense. The Court noted that the complainant had no objection to the compounding, thus removing any legal impediment. Treatment of competing arguments: The Court did not encounter any competing arguments against the compounding of the offense, as both parties were in agreement regarding the settlement. Conclusions: The Court concluded that the offense could be compounded, and the judgment of conviction and order of sentence could be quashed and set aside, resulting in the acquittal of the petitioner. Determination of Compounding Fee Relevant legal framework and precedents: The Court referred to the guidelines established by the Apex Court in K. Subramanian vs. R. Rajathi regarding the imposition of compounding fees, which suggested a graded scheme based on the stage of litigation. Court's interpretation and reasoning: The Court considered the financial condition of the petitioner and the discretion allowed by the Apex Court to reduce the compounding fee based on specific circumstances. Application of law to facts: Taking into account the petitioner's financial situation, the Court decided to impose a reduced compounding fee of Rs. 5,000, payable to the H.P. State Legal Services Authority. Conclusions: The Court exercised its discretion to impose a nominal compounding fee, considering the petitioner's financial constraints. SIGNIFICANT HOLDINGS The Court held that the offense under Section 138 of the Negotiable Instruments Act could be compounded following a compromise between the parties. The judgment of conviction and order of sentence dated 08.12.2023, as modified by the appellate court, were quashed and set aside, and the petitioner was acquitted of the charge. The Court ordered the petitioner to pay a reduced compounding fee of Rs. 5,000, acknowledging the petitioner's financial difficulties. Core principles established:
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