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.

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