IMPORTANT POINT
Offence u/s 138 Negotiable Instruments Act can be allowed to be compounded by the Court.

Y.V. Narayaua, J. - This petition is filed by the complainant in C.C. No. 284 of 1993 on the file of the learned Metropolitan Magistrate, Hyderabad seeking permission of this Court to permit him (the petitioner) to compound the offence punishable under Section 138 of Negotiable Instruments Act XXVI of 1881 and allow the Criminal Appeal No. 258 of 1995 which is filed against C.C. No. 284 of 1993 and which is pending.

2. The brief facts of the case are as under:

The petitioner-complainant advanced a sum of Rs. 11,60,000/- on 3-2-1992 and other sum of Rs. 10,00,000/- on 26-3-1992 to the first respondent herein who is the accused in the case. The first respondent issued five cheques drawn on Canara Bank, Samojiguda, Hyderabad to the petitioner herein towards repayment of the amounts advanced to him. The cheques were dishonoured as the "funds are insufficient". Therefore the petitioner filed the complaint. The learned Magistrate, after full trial, found the first respondent guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, convicted him and sentenced him to suffer Rigorous Imprisonment for a period of one year and also to pay a fine of Rs. 5,000/- in default to suffer Simple Imprisonment for a period of two months. Aggrieved by the said judgment, the first respondent carried the matter in appeal Crl. A. No. 258 of 1995 on the file of the learned IV Addl. Metropolitan Sessions Judge, Hyderabad which is still pending. Subsequent to the filing of Crl. A. No. 258 of 1995,the first respondent paid the entire amount due to the petitioner, who acknowledged the receipt of the same. Therefore the petitioner filed the present petition seeking permission to permit him to compound the said offence. Along with the petition both the petitioner and the first respondent filed separate affidavits. In the affidavit filed by the petitioner, who is the complainant in the case, he stated that he received the full amounts relating to the dishonoured cheques issued by the first respondent; that they entered into a compromise and that he has no objection to allow the appeal preferred by the first respondent.

3. The point that arises for consideration in this petition is: Whether the petitioner can be permitted to compound the offence punishable under Section 138 of the Negotiable Instruments Act with the first respondent?

4. Compounding of offences is provided in Section 345 of the Code of Criminal Procedure Act V of1898. The Old Cr. P.C. was repealed by the New Cr. P.C. Act II of 1974. Section 320 of the new Cr. P.C. seals with compounding of offences mentioned therein. The new Cr. P.C. dealt with compounding of offences punishable under the Indian Penal Code only, but not dealt with the offences under other penal laws. The Negotiable Instruments Act is silent about the compounding of the offence punishable under Section 138 of the said Act. In these circumstances, let us see the legal position.

5. Sri K.V. Satyanarayana, learned counsel for the first respondent, has brought to my notice two decisions of this Court - one by a Division Bench and another by a single Judge, to which a mention is made hereunder.

6. The Division Bench of this Court in Daggupati Jayalakshmi v. State1, considered the question very elaborately relating to granting of permission to compound the offence punishable under Section 498-A of the Indian Penal Code, which is a non-compoundable offence according to Section 320 Cr. P.C. (New) and held that permission may be granted for compounding the offence under Section 498-A IPC as the compromise entered into by the parties is for the benefit of their future life and also for the benefit of their children.

7. B. Sudershan Reddy, J., in the decision reported in Annamdevulu Srinivasa Rao v. State of A.P.2, considered the issue regarding granting of permission to compound the offences punishable under Sections 498-A and 307 IPC and also the offence punishable under Section 138 of the Negotiable Inst