2023 (10) TMI 3 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - compounding of offence - Section 138 of the NI Act - HELD THAT - Having settled the matter and the loan account of the petitioner-accused has been closed under the One Time Settlement (OTS) Scheme and the complainant-Bank has no objection in case the judgment of conviction, dated 17.05.2022, and the order of sentence dated 18.05.2022, passed by the learned Judicial Magistrate First Class, Barsar, District Hamirpur, H.P., in Complaint No. 16-I-2016, is quashed and set-aside, therefore, this Court sees no impediment in accepting the prayer made on behalf of the the parties 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 VERSUS SAYED BABALAL H. 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. In K. SUBRAMANIAN VERSUS R. RAJATHI REP. BY P.O.A.P. KALIAPPAN 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 settled the matter with the complainant-Bank under the One Time Settlement scheme, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon ble Apex Court - the parties are permitted to get the matter compounded in light of the fact that the parties have settled the dispute amicably under One Time Settlement scheme. The present matter is ordered to be compounded and the impugned judgment of conviction, dated 17.05.2022, and order of sentence, dated 18.05.2022, passed by the learned Judicial Magistrate First Class, Barsar, District Hamirpur, H.P., in Complaint No. 16-I-2016, are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against her under Section 138 of the Act. Bail bonds, if any, stand discharged. Petition disposed off.

Summary

Issues involved:
The petition filed under Section 482 of the Code of Criminal Procedure to quash a judgment and sentence under Section 138 of the Negotiable Instruments Act.

Summary:

Issue 1 - Conviction under Section 138 of the NI Act:
The accused issued a cheque that was dishonored due to insufficient funds, leading to a complaint under Section 138 of the NI Act. The trial court convicted the accused, who then appealed. During the proceedings, a joint application was filed seeking to compound the offense, as the parties had settled the matter under the One Time Settlement scheme. The court, considering the settlement and relevant legal provisions, accepted the prayer for compounding and acquitted the accused.

Issue 2 - Compounding of Offense under Section 147 of the NI Act:
The court examined the provisions of Section 147 of the NI Act, which allows for the compounding of offenses under the Act. Citing relevant legal precedents, including K. Subramanian vs. R. Rajathi, the court noted that a compromise can be accepted even after the recording of the judgment of conviction. The court, in line with the settled matter under the One Time Settlement scheme, quashed the judgment of conviction and the order of sentence, directing the release of the deposited amount to the complainant-Bank.

Issue 3 - Imposition of Compounding Fee:
Considering the financial condition of the accused, who was a housewife, the court directed the deposit of a token compounding fee of Rs.25,000 with the H.P. State Legal Services Authority. Referring to guidelines from K. Subramanian vs. R. Rajathi, the court outlined a graded scheme for imposing costs to encourage early compounding of offenses, emphasizing the discretion of the competent court to reduce costs based on specific circumstances.

In conclusion, the court allowed the compounding of the offense, quashed the judgment of conviction and order of sentence, and directed the release of the deposited amount to the complainant-Bank. Additionally, a token compounding fee was imposed considering the financial situation of the accused.