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TMI Blog2010 (5) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... n before their dispute reached this Court by way of special leave petitions. With regard to the impugned judgments deli- vered by the High Court of Bombay at Goa, the appellant has prayed for the setting aside of his conviction in these matters by relying on the consent terms that have been arrived at between the parties. The respondent has not opposed this plea and, therefore, we allow the compounding of the offence and set aside the appellant's conviction in each of the impugned judgments. 3. However, there are some larger issues which can be appropriately addressed in the context of the present case. It may be recalled that Chapter XVII comprising sections 138 to 142 was inserted into the Act by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988). The object of bringing section 138 into the statute was to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. It was to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficient arrangements made by the drawer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , thereby causing undue delay, expenditure and strain on part of the judicial system. This is clearly a situation that is causing some concern, since section 147 of the Act does not prescribe as to what stage is appropriate for compounding the offence and whether the same can be done at the instance of the complainant or with the leave of the court. The learned Attorney General stressed on the importance of using compounding as an expedient method to hasten the disposal of cases. In this regard, the learned Attorney General has proposed that this Court should frame some guidelines to disincentivise litigants from seeking the compounding of the offence at an unduly late stage of litigation. In other words, judicial directions have been sought to nudge litigants in cheque bounce cases to opt for compounding during the early stages of litigation, thereby bringing down the arrears. 6. Before examining the guidelines proposed by the learned Attorney General, it would be useful to clarify the position relating to the compounding of offences under the Negotiable Instruments Act, 1881. Even before the insertion of section 147 in the Act (by way of an amendment in 2002) some High Courts ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act. . . ." [Emphasis supplied] In order to address the deficiencies referred to above, section 10 of the 2002 amendment inserted sections 143, 144, 145, 146 and 147 into the Act, which deal with aspects such as the power of the Court to try cases summarily (section 143), Mode of service of summons (section 144), Evidence on affidavit (section 145), Bank's slip to be considered as prima facie evidence of certain facts (section 146) and Offences under the Act to be compoundable (section 147). At present, we are of course concerned with section 147 of the Act, which reads as follows :- "147. Offences to be compoundable.-Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable." 8. At this point, it would be apt to clarify that in view of the non obstante clause, the compounding of offences under the Negotiable Instruments Act, 1881 is controlled by section 147 and the scheme contemplated by section 320 of the Code of Criminal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompromise or settlement is not permissible. Some other offences, on the other hand, are not so serious and the law may allow the parties to settle them by entering into a compromise. The compounding of an offence signifies that the person against whom an offence has been committed has received some gratification to an act as an inducement for his abstaining from proceeding further with the case." 10. It would also be pertinent to refer to this Court's decision in R. Rajeshwari v. H.N. Jagadish [2008] 4 SCC 82, wherein the following observations were made (S.B. Sinha, J. at Para 12) :- "Negotiable Instruments Act is a special Act. Section 147 provides for a non obstante clause, stating : 147. Offences to be compoundable.-Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable. Indisputably, the provisions of the Code of Criminal Procedure, 1973 would be applicable to the proceedings pending before the courts for trial of offences under the said Act. Stricto sensu, however, the table appended to section 320 of the Code of Criminal Procedure is not attracted as the provisions mentioned th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sofar as the complainant is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque. If we were to examine the number of complaints filed which were 'compromised' or 'settled' before the final judgment on one side and the cases which proceeded to judgment and conviction on the other, we will find that the bulk was settled and only a minuscule number continued." 13. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect. There is also some support for the apprehensions raised by the learned Attorney General that a majority of cheque bounce cases are indeed being compromised or settled by way of compounding, albeit during the later stages of litigation thereby contri-buting to undue delay in justice-delivery. The problem here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 378(4) of the CrPC, and thereafter for special leave to appeal to the Supreme Court under Article 136. In such an instance, therefore, there will be three levels of proceedings. 15. With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence. It was submitted that the requirement of deposit of the costs will act as a deterrent for delayed composition, since at present, free and easy compounding of offences at any stage, however, belated, gives an incentive to the drawer of the cheque to delay settling the cases for years. An application for compounding made after several years not only results in the system being burdened but the complainant is also deprived of effective justice. In view of this submission, we direct that the following guidelines be followed :- The Guidelines (i)In the circumstances, it is proposed as follows : (a)That directions can be given that the Writ of Summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of this submission, we direct that it should be mandatory for the complainant to disclose that no other complaint has been filed in any other Court in respect of the same transaction. Such a disclosure should be made on a sworn affidavit which should accompany the complaint filed under section 200 of the CrPC. If it is found that such multiple complaints have been filed, orders for transfer of the complaint to the first Court should be given, generally speaking, by the High Court after imposing heavy costs on the complainant for resorting to such a practice. These directions should be given effect prospectively. 17. We are also conscious of the view that the judicial endorsement of the above quoted guidelines could be seen as an act of judicial law-making and, therefore, an intrusion into the legislative domain. It must be kept in mind that section 147 of the Act does not carry any guidance on how to proceed with the compounding of offences under the Act. We have already explained that the scheme contemplated under section 320 of the CrPC cannot be followed in the strict sense. In view of the legislative vacuum, we see no hurdle to the endorsement of some suggestions which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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