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TMI Blog2021 (3) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the allegation that cheque no.154599 dated 12.4.2012 for a sum of Rs. 4,15,000/-/- issued by the revisionist was dishonoured on account of insufficient funds. The opposite party no.2 filed a complaint case before the Special Chief Judicial Magistrate, Varanasi, under Section 138 of the Negotiable Instruments Act. The proceedings of the case, ultimately resulted in order of conviction. Against the order of conviction an appeal was preferred and the appellate Court dismissed the appeal of the revisionist and confirmed the judgment. 4. Learned counsel for the revisionist has filed supplementary affidavit today and submits that the rival parties have sorted out their dispute and have arrived at a compromise. The revisionist through RTGS has paid Rs. 7 lacs. to the opposite party no.2 in his A/c No.10979170805, SBI Main Branch, Varanasi and has also paid Rs. 10000/- cash as interest/cost. In the above regard, a written compromise has been entered into between the parties. A compromise deed dated 19.2.2021 has been annexed as Annexure S.A.-2 to the supplementary affidavit. 5. Learned counsel for the opposite party no.2 has filed a supplementary counter affidavit wherein the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nakkandi M.K. Kunhiraman & Anr. [2008 (1) KLJ 203], which was a decision of a Division Bench of the Kerala High Court, wherein also the issue has been gone into in great detail. 9. The golden thread in all these decisions is that once a person is allowed to compound a case as provided for under Section 147 of the Negotiable Instruments Act, the conviction under Section 138 of the said Act should also be set aside. In the case of Vinay Devanna Nayak (supra), the issue was raised and after taking note of the provisions of Section 320 Cr.P.C., this Court held that since the matter had been compromised between the parties and payments had been made in full and final settlement of the dues of the Bank, the appeal deserved to be allowed and the appellant was entitled to acquittal. Consequently, the order of conviction and sentence recorded by all the courts were set aside and the appellant was acquitted of the charge leveled against him. 10. The object of Section 320 Cr.P.C., which would not in the strict sense of the term apply to a proceeding under the Negotiable Instruments Act, 1881, gives the parties to the proceedings an opportunity to compound offences mentioned in the table c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cus curiae in the present matter and referred to the facts herein as an illustration of how parties involved in cheque bounce cases usually seek the compounding of the offence at a very late stage. The interests of justice would indeed be better served if parties resorted to compounding as a method to resolve their disputes at an early stage instead of engaging in protracted litigation before several forums, 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. 7. 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 boun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows: (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 at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused. (b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the Court deems fit. (c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. (d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount." 11. Recently, in the case of Meters and Instruments Priva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation under Section 357(3) is considered inadequate, having regard to the amount of the cheque, the financial capacity and the conduct of the accused or any other circumstances. 19. In view of the above, we hold that where the cheque amount with interest and cost as assessed by the Court is paid by a specified date, the Court is entitled to close the proceedings in exercise of its powers under Section 143 of the Act read with Section 258 Cr.P.C. As already observed, normal rule for trial of cases under Chapter XVII of the Act is to follow the summary procedure and summons trial procedure can be followed where sentence exceeding one year may be necessary taking into account the fact that compensation under Section 357 (3) Cr.P.C. with sentence of less than one year will not be adequate, having regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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