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2023 (4) TMI 160 - HC - Indian LawsDishonour of Cheque - insufficient funds - compounding of offence u/s 147 of NI Act - HELD THAT - Since in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has compromised the matter with the complainant-Bank, vide separate statements of authorized representative of the complainant-Bank and the petitioner-accused, annexed with the petition and in terms thereof, the petitioner-accused has already paid the entire amount of compensation, prayer for compounding the offence can be accepted. The present matter is ordered to be compounded and the impugned judgment of conviction dated 21.02.2019 and order of sentence dated 26.02.2019 passed against the petitioner-accused by learned Additional Chief Judicial Magistrate, Nalagarh, District Solan, H.P., and affirmed by learned Additional Sessions Judge, Nalagarh, District Solan, H.P., vide judgment dated 16.06.2022, are quashed and setaside 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:
1. Appeal against conviction and sentence under Section 138 of the Negotiable Instruments Act. 2. Compounding of the offence under Section 147 of the Act. Issue 1: The petitioner filed a petition against the judgment convicting and sentencing him under Section 138 of the Negotiable Instruments Act. The petitioner, accused of not repaying a loan obtained from the complainant bank, sought to set aside the judgment based on a compromise reached between the parties. The complainant alleged that the petitioner issued a cheque that was dishonored due to insufficient funds, leading to legal proceedings under Section 138 of the Act. The complainant and the petitioner, present in person, moved an application under Section 147 of the NI Act for compounding the offence. The authorized representative of the complainant bank confirmed that the petitioner had repaid the entire loan amount under a one-time scheme, leading to the issuance of a 'No Objection Certificate' by the bank. Similarly, the petitioner stated that he had repaid a significant sum against the loan, resulting in the issuance of a similar certificate by the bank. Issue 2: The Court, after considering the facts and legal precedents, accepted the prayer for compounding the offence under Section 147 of the Act. The Court referred to guidelines from previous judgments, including Damodar S. Prabhu vs. Sayed Babalal H. and K. Subramanian vs. R. Rajathi, which allowed for compounding even after recording a judgment of conviction. The Court noted that since the petitioner had paid the entire compensation amount and both parties had reached a compromise, there was no impediment to accepting the prayer for compounding the offence. The Court ordered the compounding of the matter, quashing the judgment of conviction and the order of sentence passed against the petitioner. The petitioner was acquitted of the charge under Section 138 of the Act, with any bail bonds discharged. Additionally, the Court directed the petitioner to deposit a token compounding fee of Rs.5,000 with the H.P. State Legal Services Authority, considering the petitioner's financial condition. Moreover, an amount deposited by the petitioner before the lower court was ordered to be released in his favor upon request.
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