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2025 (2) TMI 673 - HC - Indian LawsDishonour of Cheque - nullification of conviction and sentence under Section 138 of the Negotiable Instruments Act by High Court based on a compromise reached between the parties after the appellate court has confirmed the conviction - HELD THAT - It is well settled that inherent power of the Court can be exercised only when no other remedy is available to the litigants and nor a specific remedy as provided by the statute. It is also well settled that if an effective alternative remedy is available the High Court will not exercise its inherent power especially when the Revision Petitioner may not have availed of that remedy. The power can be exercised by the High Court to secure the ends of justice prevent abuse of the process of any court and to make such orders as may be necessary to give effect to any order under this Code or Act depending upon the facts of the given case. This Court can always take note of any miscarriage of justice and prevent the same by exercising its power. These powers are neither limited nor curtailed by any other provision of the Code or Act. However such inherent powers are to be exercised sparingly and with caution. In the instant case it is true that the appeal was dismissed and the conviction and sentence was upheld by the appellate court but it cannot be lost sight of the fact that this Court has power to intervene in exercise of its power only with a view to do the substantial justice or to avoid a miscarriage and the spirit of compromise arrived at between the parties. This is perfectly justified and legal too. In the case of Krishan Vs. Krishnaveni 1997 (1) TMI 529 - SUPREME COURT Hon ble the Apex Court has held that though the inherent power of the High Court is very wide yet the same must be exercised sparingly and cautiously particularly in a case where the applicant is shown to have already invoked the revisional jurisdiction under section 397 of the Code. Only in cases where the High Court finds that there has been failure of justice or misuse of judicial mechanism or procedure sentence or order was not correct the High Court may in its discretion prevent the abuse of process or miscarriage of justice by exercising its power. Merely because the litigation has reached to a revisional stage or that even beyond that stage the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage the nature of offence punishable under Section 138 of the N.I. Act should be treated as if the same is falling under table-II of Section 320 IPC. In the instant case the problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute furthermore the arguments on behalf of the Govt. Advocate (crl.side) on the fact that unlike Section 320 Cr.P.C. Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court. Conclusion - Taking into account the fact that the parties have settled the dispute amicably by way of compromise this Court is of the view that the compounding of the offence as required to be permitted. The present Criminal Revision Case is disposed of in terms of Memorandum of Compromise arrived at between the parties to this litigation out of Court.
1. ISSUES PRESENTED and CONSIDERED
The core legal issue considered in this judgment is whether the High Court can nullify the conviction and sentence under Section 138 of the Negotiable Instruments Act based on a compromise reached between the parties after the appellate court has confirmed the conviction. 2. ISSUE-WISE DETAILED ANALYSIS The primary issue revolves around the compounding of offences under Section 138 of the Negotiable Instruments Act, particularly after the conviction has been confirmed by an appellate court. The relevant legal framework includes Section 138 and Section 147 of the Negotiable Instruments Act, along with Section 320 of the Code of Criminal Procedure (Cr.P.C.), which deals with the compounding of offences. Relevant Legal Framework and Precedents: Section 138 of the Negotiable Instruments Act criminalizes the dishonor of cheques. Section 147 of the same Act allows for the compounding of offences, notwithstanding any other provisions in the Cr.P.C. Section 320 of the Cr.P.C. outlines the procedure for compounding offences but does not explicitly include offences under the Negotiable Instruments Act. Court's Interpretation and Reasoning: The Court considered the non obstante clause in Section 147 of the Negotiable Instruments Act, which allows for the compounding of offences under this Act, overriding the procedural constraints of Section 320 Cr.P.C. The Court emphasized the compensatory nature of the offence under Section 138, prioritizing the settlement of monetary disputes over punitive measures. Key Evidence and Findings: The judgment notes that the parties entered into a compromise, with the respondent receiving the full cheque amount through partial payments and a demand draft. This settlement formed the basis for the Court to consider the compounding of the offence. Application of Law to Facts: The Court applied the principles from precedents such as Damodar S. Prabhu vs. Sayed Babalal H and M/s Meters and Instruments Private Limited vs. Kanchan Mehta, which support the compounding of offences under Section 138 at any stage of the proceedings, including post-conviction, provided the complainant has been duly compensated. Treatment of Competing Arguments: The State, represented by the learned Govt. Advocate, opposed the compounding on the grounds that the conviction had been confirmed by the appellate court. However, the Court found that the inherent powers of the High Court could be invoked to secure justice and prevent the misuse of judicial processes, especially when the parties have settled the dispute amicably. Conclusions: The Court concluded that the compromise between the parties justified the compounding of the offence, leading to the annulment of the conviction and sentence. The revision petitioner was acquitted based on the settlement. 3. SIGNIFICANT HOLDINGS The judgment establishes that offences under Section 138 of the Negotiable Instruments Act can be compounded at any stage, including after appellate confirmation of conviction, if the parties reach a settlement. The Court emphasized that the primary objective of the Act is compensatory, not punitive. Verbatim Quotes of Crucial Legal Reasoning: "The expression 'special law' means a provision of law, which is not applicable generally but which applies to a particular or specific subject or class of subjects... When a special law or a statute is applicable to a particular subject, then the same would prevail over a general law with regard to the very subject, is the accepted principle in the field of interpretation of statute." Core Principles Established: The judgment reinforces the principle that the compounding of offences under the Negotiable Instruments Act is permissible at any stage, provided the complainant is compensated, and highlights the overriding effect of Section 147 over the procedural constraints of the Cr.P.C. Final Determinations on Each Issue: The Court determined that the conviction and sentence under Section 138 were annulled due to the compromise, and the revision petitioner was acquitted. The judgment underscores the Court's discretion to secure justice by facilitating settlements in cheque dishonor cases.
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