2022 (3) TMI 1050 - HC - Indian Laws

Dishonor of Cheque - amicable settlement of disputes between the parties - Section 138 of NI Act - HELD THAT - Having gone through the material placed on record, it has emerged that the applicant has been convicted by the concerned Criminal Court for the offence punishable under Section 138 of the N.I. Act. However, now, the parties have amicably settled the dispute and, therefore, the complainant has filed an affidavit stating that if the order of conviction passed against the applicant is quashed and set aside, he has no objection. When the parties have settled the dispute amicably, compounding of the offence is required to be permitted. Accordingly, the application is allowed - Respondent No.2 filed a complaint under Section 138 of the N.I. Act for dishonour of the cheque amounting to ₹ 25,036/-. Therefore, as per the decision rendered by the Honourable Supreme Court, the applicant is required to deposit 15% of the amount of the cheque with the Gujarat State Legal Services Authority.

Summary

Issues:
1. Application under Section 482 of the Code of Criminal Procedure seeking quashing of judgment convicting the applicant under Section 138 of the Negotiable Instruments Act.
2. Settlement between the parties and the permissibility of compounding the offence post-conviction.
3. Application of guidelines from previous judgments by the Supreme Court and the High Court regarding compounding of offences under Section 138 of the Negotiable Instruments Act.

Analysis:
1. The judgment dealt with an application under Section 482 of the Code of Criminal Procedure, seeking to quash the conviction of the applicant under Section 138 of the Negotiable Instruments Act. The applicant was convicted by the Additional Judicial Magistrate and sentenced to six months of simple imprisonment along with a compensation order of &8377; 25,036 to the complainant.

2. The parties informed the court of an amicable settlement, with the complainant filing an affidavit stating no objection to quashing the conviction. The applicant expressed willingness to deposit the required amount with the Gujarat State Legal Services Authority. The court considered the settlement and relied on previous judgments to allow the compounding of the offence post-conviction.

3. Referring to the Supreme Court's guidelines in Damodar S. Prabhu case, the court directed the applicant to deposit 15% of the cheque amount with the Legal Services Authority within four weeks. Upon compliance, the impugned judgment and all consequential proceedings were quashed and set aside. The court emphasized the importance of amicable settlements and the permissibility of compounding offences under Section 138 of the Negotiable Instruments Act, ensuring justice and resolution between the parties.