2021 (11) TMI 294 - HC - Indian Laws

Dishonor of Cheque - compoundable offences or not - composition of cost of 15% of the dishonoured cheque value - offence punishable under Section 138 of the Negotiable Instruments Act - HELD THAT - In the present case the parties have settled the matter after the judgment passed by the Appellate Court. Hence as per the guidelines framed by the Hon ble Apex Court, the composition should be allowed by imposing cost of 15% of the dishonoured cheque value. But considering that fact that the petitioner has been taken into custody and has spent more than two months in judicial custody in the meanwhile, the imposition of cost of ₹ 1,000/- would be in the interest of justice - the said cost should be deposited in High Court Bar Association Advocate s Welfare Fund. In course of hearing when this amount was suggested to the counsel for the petitioner he has submitted that he will deposit the said amount and file the receipt in course of the day and has in fact filed the receipt. That as the matter has been settled between the parties and the compensation amount has been paid to the complainant Opp party No.2, in full and final settlement of the dispute, the compounding of the offence under Section -138 of the N.I.Act is allowed and the conviction of the petitioner under Section 138 of N.I. Act and the sentence to undergo simple imprisonment for one year and to pay compensation of ₹ 2,50,000/- imposed, is set aside. Application allowed.

Summary

Issues:
Petitioner convicted under Section 138 of the Negotiable Instruments Act - Appeal for setting aside conviction and sentence based on settlement - Compounding of offence at appellate stage - Imposition of costs for compounding - Jurisdiction of the court in allowing compounding.

Analysis:
The petitioner was convicted under Section 138 of the Negotiable Instruments Act and sentenced to imprisonment and compensation. The petitioner filed a revision seeking to set aside the conviction based on a settlement with the complainant. The written acknowledgement of receiving compensation was filed by the complainant, but the request to set aside the conviction was rejected by the Sessions Judge. The petitioner argued for compounding the offence as per Section 138 of the Act, citing relevant case laws supporting compounding at any stage.

The dispute between the parties was settled, and both parties agreed to compound the offence under Section 138 of the Act. The petitioner had paid the compensation amount, and a compromise petition was filed before the Magistrate under Section 147 of the Act, seeking to set aside the conviction and punishment. The government advocate highlighted the need for imposing costs for delayed composition of the offence, as per guidelines set by the Supreme Court in previous cases.

Section 147 of the Negotiable Instruments Act makes every offence under the Act compoundable, overriding the provisions of the Code of Criminal Procedure. The Supreme Court's decisions emphasized that once a case is compounded under Section 147, the conviction under Section 138 should be set aside. The court referred to previous cases where compounding was allowed at the appellate stage and acquitted the accused based on settlements reached between the parties.

In line with the guidelines set by the Supreme Court, the court allowed the compounding of the offence by imposing a cost of 15% of the dishonored cheque value. However, considering the petitioner's custody and time spent, a nominal cost of ?1,000 was imposed, to be deposited in the High Court Bar Association Advocate's Welfare Fund. The court set aside the conviction and sentence, ordering the petitioner's immediate release.

The court allowed the criminal revision, granting an urgent certified copy of the order. The judgment highlighted the importance of early compounding to avoid undue delays in legal proceedings and emphasized the need for uniformity in imposing costs for delayed composition of offences under the Negotiable Instruments Act.