IMPORTANT POINT
Offence u/s. 138 of Negotiable Instruments Act is not compoundable.

N.K. Jain, J. - A short but important question of law arises for determination in this petition is as to whether the offence under Section 138 of the Negotiable Instruments Act (for short, 'the Act') can be permitted to be compounded.

2. The case giving rise to this petition is pending in Appeal (No. 68/2000) before the 1st Additional Sessions Judge, Mhow, who vide order dated 23-9-2000 has declined joint prayer made by the complainant payee and the accused drawee (the petitioners herein) to compound the offence under Section 138 of the Act for which the latter is convicted by the trial Magistrate. The learned ASJ has held that the offence under Section 138 is not compoundable and no permission to compound the same can be accorded in view of the bar contained under sub-section (9) of Section 320 of the Code of Criminal Procedure. 1973 (for short. 'the Code').

3. Interestingly both the complainant petitioner No. 1 and accused petitioner No. 2 have come up before this Court under Section 482 of the Code seeking permission to compound the offence and it is submitted that the entire claim of the complainant-payee stands satisfied by the settlement arrived at between the parties. Mr. S.K. Vyas, learned Counsel for accused (petitioner No. 2) has submitted that the offence under Section 138 of the Act is a personal offence not against the society at large and since claim of the payee is satisfied fully by the drawer no useful purpose would be served by sentencing the latter to any punishment. It is further contended that the bar contained under sub-section (9) of Section 320 of the Code applies to the offences under the Indian Penal Code only and not to the offences under special laws like the one in hand. Learned Counsel has also referred to Section 345 and the IInd Schedule of the old Cr. P.C. (1898) which contained an express provision that the offences under other laws are not compoundable. It was thus contended that the omission of any such provision in the new Code, goes to show that the prohibition against composition of the offences under other laws is taken away by the new Code. Reliance is placed on a decision of Andhra Pradesh High Court in the case of M. Mohan Reddy1. Learned counsel has also cited a decision of the Supreme Court in the case of O.P. Dholakia2. Where permission to compound the offence under Section 138 of the Act was accorded by the Apex Court in an appeal pending before it.

As against it, Mr. Girish Desai, learned Dy. Advocate General for respondent-State strongly defended the decision of the Appellate Court below and submitted the subject to the limitations provided under Section 42 of the Act, the offence under Section 138 is to be inquired into, tried and otherwise dealt with according to the provisions of the Code. Section 320, it is contended shall govern composition of the offences, under the special laws unless these laws contain some special provision for permitting such composition. I feel persuaded by the argument.

4. Section 138 makes the dishonour of cheques for insufficiency of funds, etc. in the account of the drawer punishable subject to certain conditions regarding demand by the payee and failure on the part of the drawer to pay the amount of cheque, as stipulated in the proviso to that section. Section 142 provides for taking cognizance of the offence only on a written complaint made by the payee within the prescribed time limit. It also provides as to by which Court the offence can be tried i.e. The Court of Metropolitan Magistrate Of Judicial Magistrate of the First Class? However the Act is silent as to the procedure to be followed for trial of the offences and the other connected matter. The Act also does not provide for compounding the offence. Under the circumstance, as provided by section 4(2) of the Code, the offence under: Section 138 of the Act has to be inquired into tried and otherwise dealt with according to the provisions of the Code subject to the limitations provided in S