1. Complaint under Section 138, Negotiable Instruments Act — Application to compound offence — High Court order compounding offence without complainant's consent. (Para 1 )
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2024 Supreme(SC) 694
SUPREME COURT OF INDIA
C.T. RAVIKUMAR, SANJAY KAROL, JJ.
A.S. Pharma Pvt. Ltd. – Appellants
Versus
Nayati Medical Pvt. Ltd. & Ors. - Respondent
Criminal Appeal No(s). 3051 – 3052 of 2024 (@ SLP(Crl.) Nos.9766-9767 of 2024) (Arising out of D. No.11530 of 2024)
Decided on : 23-07-2024
Important Points
The compounding of offences under Section 138 of the N.I. Act requires the consent of the complainant, and the inherent powers of the High Court cannot be used to circumvent this requirement.
Subject
Criminal Law - [Negotiable Instruments Act]
Act Referred
Headnote
[N.I. Act] - [Compounding of Offences] - [Section 138, Section 147 of the N.I. Act, Section 320, Section 482 of the Cr.P.C.] - [The court discussed the compounding of offences under Section 138 of the N.I. Act, emphasizing that while Section 147 allows for compounding, it requires the consent of the complainant. The High Court's decision to compound the offence without such consent was deemed erroneous. The court clarified that inherent powers under Section 482 of the Cr.P.C. cannot be used to bypass statutory requirements, and the necessity of complainant consent for compounding was reaffirmed.]
Fact of the Case:
The appellant filed a complaint under Section 138 of the N.I. Act against the respondents. The respondents sought to compound the offence, but the Trial Court dismissed their application. The High Court later compounded the offence without the appellant's consent, leading to the appeal.
Finding of the Court:
The court found that the High Court erred in compounding the offence under Section 138 of the N.I. Act without the complainant's consent, despite the respondents having deposited the required amount. The court emphasized that consent is mandatory for compounding under Section 147 of the N.I. Act.
Issues: Whether the High Court could compound the offence under Section 138 of the N.I. Act without the consent of the complainant, and the interpretation of the powers under Section 482 of the Cr.P.C. and Section 147 of the N.I. Act.
Ratio Decidendi: The court held that the offence under Section 138 of the N.I. Act can only be compounded with the consent of the complainant, and the inherent powers under Section 482 of the Cr.P.C. cannot be invoked to bypass this requirement.
Final Decision: The court set aside the High Court's order compounding the offence and quashed the complaint, allowing the appellant to withdraw the deposited amount.
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
- constitutional law
Advocates:
Advocate Appeared:
For the Appellant : Mr. Vimit Trehan, Adv., Mr. Dhruv Dwivedi, Adv., Mr. Ravi Bharuka, AOR
For the Respondent: Mr. Giriraj Subramanium, Adv., Mr. Simarpal Singh Sawhney, Adv., Mr. Siddhant Juyal, Adv., Mr. Veda Singh, Adv., Mr. Ravi Pathak, Adv., Simar Singh Sawhney, Adv., Mr. Akhilesh Talluri, Adv., Mr. Joy Banarjee, Adv., Ms. Urvarshi Singh, Adv., Mr. Aditya Singh, AOR
Advocate Appeared:
For the Appellant : Mr. Vimit Trehan, Adv., Mr. Dhruv Dwivedi, Adv., Mr. Ravi Bharuka, AOR
For the Respondent: Mr. Giriraj Subramanium, Adv., Mr. Simarpal Singh Sawhney, Adv., Mr. Siddhant Juyal, Adv., Mr. Veda Singh, Adv., Mr. Ravi Pathak, Adv., Simar Singh Sawhney, Adv., Mr. Akhilesh Talluri, Adv., Mr. Joy Banarjee, Adv., Ms. Urvarshi Singh, Adv., Mr. Aditya Singh, AOR
Table of Contents
2. Whether an offence under Section 138, Negotiable Instruments Act can be compounded by a court without the consent of the complainant. (Para 3 , 4 )
3. Inherent powers under Section 482, Cr.P.C. cannot be used to bypass the requirement of complainant's consent for compounding under Section 147, Negotiable Instruments Act. (Para 5 , 9 , 10 , 11 , 13 , 14 , 15 , 16 , 17 , 18 )
4. An offence under Section 138, Negotiable Instruments Act can be compounded under Section 147 of the Act only with the consent of the complainant. (Para 14 , 15 , 17 )
5. High Court order compounding the offence set aside; however, proceedings quashed by the Supreme Court using Article 142 of the Constitution. (Para 19 , 21 )
6. Is consent of the complainant required for compounding an offence under Section 138 of the Negotiable Instruments Act?
Yes, an offence under Section 138, Negotiable Instruments Act can be compounded under Section 147 of the Act only with the consent of the complainant. (Para 14 , 15 , 17 )
7. Can the inherent powers of the High Court under Section 482, Cr.P.C. be used to compound an offence without the complainant's consent?
No, inherent powers under Section 482, Cr.P.C. are not invocable to compound an offence under the Negotiable Instruments Act while ignoring the essential requirement of the complainant's consent. (Para 10 , 11 )
8. What is the legal distinction between quashing a case and compounding an offence?
Quashing is a judicial application of power to terminate proceedings, whereas compounding is primarily based on the consent of the injured party; therefore, the two cannot be equated. (Para 16 )
9. Can a High Court exercise powers similar to the Supreme Court's power under Article 142 of the Constitution?
No, the power under Article 142 to make orders necessary for doing complete justice is available only to the Supreme Court of India and not to High Courts. (Para 18 )
ORDER :
Delay condoned.
Leave granted.
1. These appeals are directed against the judgment dated 13.12.2023 passed by the High Court of Delhi in Criminal Miscellaneous Case No. 970 of 2023 and Criminal Miscellaneous Appeal No. 3701 of 2023. The appellant filed Complaint Case No. 5564 of 2022 alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘N.I. Act’) against the respondents. On receipt of the summons, the respondents appeared before the Court and expressed their readiness to settle the matter by effecting the payment. An application to permit to compound the offence was filed under Section 320 of the Code of Criminal Procedure, 1973 (for short, the ‘Cr.P.C.’). The Trial Court dismissed the same as per order dated 06.02.2023. Aggrieved by the order of the Trial Court, respondents took up the matter before the High Court challenging the order dismissing the application for compounding the offence under Section 138, N.I. Act also seeking quashment of C.C. No.5564 of 2022 and all further proceeding thereon in Criminal M. C. No. 970 of 2023. As per the impugned judgment the High Court, apparently, exercised the inherent power under Section 482, Cr.P.C., coupled with those under Section 147, N.I. Act, and ordered thus:-
“17. Accordingly, the present petition is allowed and the offence of the petitioners/accused persons in Complaint Case No.5564/2022 titled A.S. Pharma Pvt. Ltd. vs M/S Nayati Medical Pvt. Ltd. & Ors. pending before the learned Trial Court is hereby compounded, albeit subject to the petitioners depositing before the concerned learned Trial Court the cumulative cheque(s) amount of Rs.6,50,000/-(Rs. Six Lakhs fifty thousand only) with 12% simple interest per annum thereon from the date of cheque(s) return memo i.e. 18.03.2020 till the date of actual payment of the amount as also a sum of Rs.1,00,000/-Rs. One Lakh only), within a period of eight weeks. Needless to mention, the amount, if any, already deposited before the learned Trial Court be adjusted in the aforesaid sum(s). The respondent/complainant is free to move an appropriate application for release of the amount deposited before the learned Trial Court in above terms.”
2. Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondents.
3. The core contention of the appellant is that an offence under Section 138 of the N.I. Act is not compoundable under Section 320 Cr.P.C., and in such circumstances, the application was rightly dismissed by the Trial Court. Ergo, invoking the power under Section 482 Cr.P.C., coupled with those under Section 147, N.I. Act, the High Court ought not to have compounded the offence without the consent of the appellant.
4. Per contra, the learned counsel appearing for the respondents submitted that when the indisputable position is that the offence under Section 138 of the N.I. Act is compoundable under Section 147 of the N.I. Act, no palpable illegality could be attributed to the action in invoking the power under Section 482, Cr.P.C, coupled with the power under Section 147, N.I. Act to compound the offence. The said contention of the respondents was resisted by the learned counsel for the appellant contending that for compounding the offence, consent of the complainant is required. Sans consent from the complainant, the High Court was not justified in compounding of the offence under Section 138, N.I. Act, it is further contended.
5. A perusal of the impugned order would reveal that though the High Court entertained the challenge against the order rejecting an application for compounding the offence under Section 138, N.I. Act filed under Section 320 Cr.P.C., the High Court actually compounded the offence invoking its inherent power under Section 482 Cr.P.C., coupled with the power under Section 147 of the N.I. Act. To consider the legality and correctness of the said exercise of power, it is imperative to unders
