9911796707
TMI Blog2023 (12) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be an initial stage. This application has been filed in response to the summons issued by the Court making it clear that if the applicants would make an application for compounding of offence at the first or second hearing of the case, the compounding may be allowed. The non-applicant no.2, thus, appears to have raised his claim for recovery of the amount on 03.01.2018 before the IRP. Admissible recovery, whether of Rs.3 crores or otherwise, will be considered before the IRP and in terms of the provisions of the IBC Code, 2016. In the circumstances, to not offer consent on the ground that the applicants owe dues to the non-applicant no.2 to the tune of Rs. 3 crores is, in my considered opinion, an abuse of process of law and, therefore, by invoking the jurisdiction u/s 482 of the Code, this attempt will have to be and stands nipped down. Whether it will be permissible for six accused (the present applicants) out of twelve, to seek compounding of offence? - HELD THAT:- The applicants have referred to the judgment of the Allahabad High Court, in the case of GAGAN PAL SINGH AHUJA AND ORS VERSUS STATE OF U.P. AND ORS. [ 2023 (5) TMI 1280 - ALLAHABAD HIGH COURT] , which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant no.4 is the accused no.5; applicant no.5 is the accused no.10 and applicant no.6 is the accused no.11 respectively. These applicants have been arrayed as accused in the capacity as Directors of the Company with an allegation that they all are involved in the day-to-day affairs of the Company. 4. The allegations against the accused are that they have placed different purchase orders with the non-applicant no. 2-Company/ complainant for supply of Lustron, Inoculant and Nodulant, which are foundry consumables. The non-applicant no.2 has supplied the material for an amount of Rs.3.16 crores approximately and in order to discharge the part liability, the aforesaid cheque was issued by the accused- Company. The cheque was for Rs.15 lakhs bearing No.805627 dated 23.12.2017 drawn on State Bank of India, Finance branch, New Delhi. The cheque was presented for encashment, but returned back unpaid with the remarks insufficient funds . After complying with other necessary formalities like issuance of notices etc., the complaint in question has been filed, u/s.138 read with Section 142 of the NI Act as well as Section 420 of the Indian Penal Code. 5. Mr.D.P. Singh, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NES (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 cost 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 the 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. Let it also be clarified that any cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vacuum which exists in Section 147 of the NI Act. The Court held that Section 147 of the NI Act does not carry any guidance on how to proceed with the compounding of the offence under the NI Act and the Court felt that Section 320 of the Code cannot be strictly followed in the compounding of the offence under Section 147 of the NI Act. Those guidelines were given to fill up a legislative vacuum. 76. ..The decision in Damodar was rendered by referring to Article 142 of the Constitution insofar as guidelines were framed in relation to compounding for reducing pendency of 138 cases. In doing so the Court held that attempts should be made for compounding the offences early. Therefore, the observations made in para 24 of Damodar that the scheme contemplated under Section 320 of the Code cannot be followed in the strict sense does not and cannot mean that the fundamental provisions of compounding under Section 320 of the Code stand obliterated by a side-wind, as it were. 77. It is well settled that a judgment is always an authority for what it decides. It is equally well settled that a judgment cannot be read as a statute. It has to be read in the context of the facts d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to compounding of an offence under the NI Act, in that case the compounding of offence under the NI Act will be left totally unguided or uncontrolled. Such an interpretation apart from being an absurd or unreasonable one will also be contrary to the provisions of Section 4(2) of the Code, which has been discussed above. There is no other statutory procedure for compounding of offence under the NI Act. Therefore, Section 147 of the NI Act must be reasonably construed to mean that as a result of the said Section the offences under the NI Act are made compoundable, but the main principle of such compounding, namely, the consent of the person aggrieved or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the NI Act. 9. Mr. Anand Jaiswal, the learned Senior Counsel for the nonapplicant no.2 has placed heavy reliance upon the JIK s case, to contend that compounding of the offence without consent of the complainant is not permissible. 10. At this stage, the learned counsel for the applicants submits that the JIK s case has been overruled, in the case of Meters Instruments Pvt. Ltd. vs. Ka nchan Meh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appropriate compensation as may be found acceptable to the parties or the Court. (iii) Though compounding requires consent of both parties, even in absence of such consent, the court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the Accused. (iv) Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the court has jurisdiction under Section 357(3) Code of Criminal Procedure to award suitable compensation with default sentence under Section 64 Indian Penal Code and with further powers of recovery Under Section 431 Code of Criminal Procedure. With this approach, prison sentence of more than year may not be required in all cases. (v) Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-applicant no.2 and mere offer of paying the cheque amount does not amount to compensation. 14. The learned senior counsel has then invited my attention to paragraph 24 of the judgment of the Supreme Court in Suo Motu Writ Petition (Cri) No.2/2020 decided on 16.04.2021 and submits that the judgment of Meters Instruments, to contend that the larger Bench has not approved in totality the version in Meters Instruments case. The relevant part finds place in clause (7) of paragraph 24 of the judgment which reads thus : 7) Section 258 of the Code is not applicable to complaints under Section 138 of the Act and findings to the contrary in Meters and Instruments (supra) do not lay down correct law. To conclusively deal with this aspect, amendment to the Act empowering the Trial Courts to reconsider/recall summons in respect of complaints under Section 138 shall be considered by the Committee constituted by an order of this Court dated 10.03.2021. 15. To my mind, and as rightly pointed out by the learned counsel for the applicants, the Supreme Court in the aforesaid judgment has not overruled the judgment in Meters Instruments . What has been said in Suo Motu Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NI Act will be left totally unguided or uncontrolled. Such an interpretation apart from being an absurd or unreasonable one will also be contrary to the provisions of Section 4(2) of the Code, which has been discussed above. There is no other statutory procedure for compounding of offence under the NI Act. Therefore, Section 147 of the NI Act must be reasonably construed to mean that as a result of the said Section the offences under the NI Act are made compoundable, but the main principle of such compounding, namely, the consent of the person aggrieved or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the NI Act. 18. The above finding has been rendered in the case where the Supreme Court was testing the contentions of the appellants therein that, as a result of sanction of scheme u/s 391 of the Companies Act, there is an automatic compounding of offence u/s 138 of the NI Act even without the consent of the complainant. 19. In Meters Instruments case, the Apex Court has not only considered the guidelines issued in Damodar s case, but has also considered the challenge to the order passed by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the first or second date of hearing of the case and that if such an application is made, the compounding may be allowed by the Court without imposing any costs on the accused. Thus, the accused is made to believe that if he files an application for compounding offence at the initial stage of the case, the compounding will not only be allowed but will be allowed without imposing costs. The question, therefore is, if the accused in response to the writ of summons files application for compounding offence, can the Court or will it be appropriate for the Court to reject the application on the ground of absence of consent of the complainant, particularly when the accused is not put to notice that compounding will be allowed only if the complainant extends his consent. To my mind, in normal circumstances, when the application for compounding offences u/s 138 of the NI Act is made at the initial stage of the case and if the complainant is duly compensated, the trial Court will be fully justified in compounding the offence without consent of the complainant. 22. The purpose behind the intimation to the accused that he could make an application for compounding is to encourage settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Attorney General that a majority of the cheque bounce cases are indeed being compromised or settled by way of compounding, albeit during the later stages of litigation thereby contributing to undue delay in justice-delivery. The problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute. Furthermore, the written submissions filed on behalf of the learned Attorney General have stressed on the fact that unlike Section 320 of the CrPC, 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. As mentioned earlier, the learned Attorney General s submission is that in the absence of statutory guidance, parties are choosing compounding as a method of last resort instead of opting for it as soon as the Magistrates take cognizance of the complaints. One explanation for such behaviour could be that the accused persons are willing to take the chance of progressing through the various stages of litigation and then choose the route of settlement only when no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, unless the complainant puts forth the justifiable reason to not give consent, in my considered view, the cumulative effect of the law laid down in Damodar s case read with JIK and M eter Instrument s case would require the trial Court to consider the application seeking compounding of offence favourably, else the very purpose of issuance of summons with accompaniment encouraging accused to opt for compounding offence and the guidelines issued in Damodar s case as clarified in Meters Instruments case would be frustrated/defeated. 25. It appears that the attention of learned Magistrate was not invited to the guidelines issued in Damodar s case, as clarified in Meters Instrument s case and, therefore, the learned Magistrate has by relying upon the JIK s case, declined to compound the offence. 26. Having said that the learned Magistrate ought to have considered the application favourably, the valid question raised by the non-applicant no.2 as to whether it has been duly compensated will have to be answered. According to learned Senior Counsel duly compensated does not mean value of cheque but the entire dispute between the parties is sorted out. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of Rs. 3 crores is, in my considered opinion, an abuse of process of law and, therefore, by invoking the jurisdiction u/s 482 of the Code, this attempt will have to be and stands nipped down. 32. The last question that requires answer is whether it will be permissible for six accused (the present applicants) out of twelve, to seek compounding of offence. The applicants have referred to the judgment of the Allahabad High Court, in the case of Gaganpal Singh Ahuja others vs. State of U.P. others, reported in 2023(6) ADJ 223, which was required to consider whether piecemeal compromise and compounding thereof is permissible. The Court has held as under :- 22. .The compromise, in the modern society, is the sine qua non of a harmony and orderly behaviour. The soul of the justice and if the power under section 482 Cr.P.C. is used to enhance such compromise which, in turn, enhances the social amity and reduces fiction, then it is a finest hour of the justice . Dispute which has their genesis in a matrimonial discord, landlord-tenant matters, commercial transactions and other such matters can safely be dealt by the Court by exercising its powers under Section 482 Cr.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter and peaceful life and to meet the ends of justice, I deem it appropriate to quash the FIR No. 1087/2003, under Section 406, 420, 468, 471 of the Indian Penal Code, 1860 registered at Police Station Parliament Street, Delhi qua against the petitioners, namely Vijay Kumar Gupta, Rajkumar Sharma and Vinod Choudhary only to the extent of their role in commission of the alleged offence. 35. Mr. Anand Jaiswal, the learned Senior Counsel for the nonapplicant/ respondent no.2 has opposed piecemeal compromise by contending that such compounding is an exception and may be permissible where the complainant has given consent to the compromise and not otherwise. He submits that in Gaganpal Singh Ahuja s case (supra) piecemeal compounding was recognised because the complainant has given consent to compounding the offence. However, in the present case, the complainant has not given such consent and, therefore, the said judgment will not be applicable to the facts of the present case. As regards Vijay Kumar s case (supra), the learned Senior Counsel submits that the judgment relates to quashing of first information report and not compounding of offence. 36. To my mind, the ratio dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
