2022 (1) TMI 502 - HC - Indian Laws

Dishonor of Cheque - amicable settlement between parties - compounding of offence - requirement to deposit 15% of the amount of the cheque with the Gujarat State Legal Services Authority - the applicant has submitted that the cheque amount is more than ₹ 1 crore and it is difficult for the applicant to deposit 15% amount of the cheque with the Gujarat State Legal Services Authority. It is further submitted that the applicant is in jail since 7.9.2021 - HELD THAT - The applicant is permitted to deposit 10% of the said cheque amount with the Gujarat State Legal Services Authority, out of which the applicant shall deposit 5% of the said cheque amount within a period of one month and deposit the remaining amount of 5% of the said cheque amount within a period of five months thereafter with the Gujarat State Legal Services Authority. Application disposed off.

Issues:
1. Application under Section 482 of the Code of Criminal Procedure to quash judgment and order of conviction under Section 138 of the Negotiable Instruments Act.
2. Settlement between parties leading to a compromise deed.
3. Compounding of the offence under Section 138 of the N.I. Act.
4. Deposit requirement as per guidelines issued by the Honourable Supreme Court.

Issue 1: Application under Section 482 of the Code of Criminal Procedure
The applicant sought to quash the judgment and order of conviction under Section 138 of the Negotiable Instruments Act, along with subsequent proceedings. The applicant was convicted by the 11th Additional Chief Judicial Magistrate and the conviction was upheld by the 13th Additional Sessions Judge. The applicant argued for quashing based on a settlement with the complainant, citing a compromise deed executed between the parties. The applicant relied on legal precedents to support the argument that compounding of the offence is permissible even after conviction under Section 138 of the N.I. Act under certain conditions.

Issue 2: Settlement between parties
The dispute between the parties was amicably settled, leading to the execution of a compromise deed on 8.12.2021. The complainant filed an affidavit before the Court confirming the settlement and expressing no objection to quashing the order of conviction against the applicant. Both parties confirmed the settlement, which was a crucial factor in the Court's decision to entertain the application and consider quashing the conviction.

Issue 3: Compounding of the offence
The Court referred to legal precedents and guidelines issued by the Honourable Supreme Court regarding compounding of offences under Section 138 of the N.I. Act. The Court noted that when parties settle disputes amicably, compounding of the offence should be permitted. Considering the settlement between the parties and the legal principles laid down, the Court allowed the application, quashed the judgment and order of conviction, and set the applicant at liberty. The applicant expressed willingness to deposit the required amount with the Gujarat State Legal Services Authority.

Issue 4: Deposit requirement as per guidelines
As per the guidelines issued by the Honourable Supreme Court, the applicant was required to deposit 15% of the cheque amount with the Gujarat State Legal Services Authority. However, considering the applicant's circumstances, including age and financial constraints, the Court permitted the applicant to deposit 10% of the cheque amount in two installments. The Court emphasized the importance of compliance with the deposit order and warned of consequences for non-compliance.

In conclusion, the Court allowed the application under Section 482 of the Code of Criminal Procedure, quashed the judgment and order of conviction, and permitted the applicant to deposit 10% of the cheque amount with the Gujarat State Legal Services Authority in two installments. The Court's decision was based on the settlement between the parties, legal precedents, and guidelines regarding compounding of offences under Section 138 of the N.I. Act.

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