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IN THE HIGH COURT OF JUDICATURE AT PATNA
ANIL KUMAR SINHA, J.
Mithilesh Kumar, S/o. Late Bhagwat Ram & Ors. - Petitioners
Versus
The State of Bihar & Ors. - Respondents
Criminal Revision Nos. 571, 646 of 2022
Decided On : 07-10-2023
N.I. Act - Dishonour of Cheques - Section 138, Section 147 of N.I. Act; Section 320 of Cr.P.C. - The court discussed the provisions of Section 138 of the N.I. Act, which deals with the offence of dishonour of cheques due to insufficient funds, and Section 147, which allows for compounding of such offences. The court also referred to Section 320 of the Cr.P.C. regarding the compounding of offences and the effect of such composition leading to acquittal. The court's decision to allow the compounding of the offence was influenced by the amicable settlement reached between the parties, resulting in the acquittal of the petitioner.
Fact of the Case:
The petitioner, Mithilesh Kumar, was convicted under Section 138 of the N.I. Act for issuing two cheques of Rs.50,000 each that were dishonoured due to insufficient funds. He appealed the conviction, which was partly allowed by the appellate court, reducing the fine but upholding the conviction. Subsequently, both parties reached a joint compromise settlement, leading to the filing of a petition for compounding the offence.
Finding of the Court:
The court found that both parties had willingly and voluntarily entered into a compromise, supported by the submission of a bank draft as part of the settlement. The court was satisfied with the terms of the compromise and the legal provisions allowing for compounding of the offence.
Issues: Whether the offence under Section 138 of the N.I. Act could be compounded given the mutual agreement between the parties and the legal provisions allowing for such compounding.
Ratio Decidendi: The court held that under Section 147 of the N.I. Act, offences punishable under the Act are compoundable, and Section 320 of the Cr.P.C. allows for the compounding of offences, leading to acquittal. The court emphasized the importance of the amicable settlement reached by the parties.
Final Decision: The court set aside the orders of conviction from both the trial and appellate courts, acquitting the petitioner of all charges and discharging him from the liability of bail bond.
JUDGMENT :
Anil Kumar Sinha, J.
1. Cr. Rev. No. 571 of 2022 has been filed by the convict being aggrieved by the judgment dated 27.04.2022 passed in Cr. Appeal no. 99 of 2018 & CIS No. 99/2018 preferred against the sentence awarded by the learned ACJM-II, Patna in Complaint Case No. 3008(C) of 2004 whereby the appeal was partly allowed and partly dismissed. Admittedly the petitioner / revisionist had issued two cheques of Rs.50,000/- each to the complainant, who is Opposite Party No. 2 in Cr. Revision No. 571 of 2022 and the petitioner in Cr. Revision No. 646 / 2022. Two cheques of Rs.50,000/- were dishonoured on 11.10.2004 & 26.10.2004 due to insufficient fund and accordingly the petitioner of Cr. Rev. 646 of 2022 lodged Complaint Case No. 3008(C)/2004 on 10.12.2004. Learned Sub Judge II -cum -ACJM II, Patna vide judgment and order dated 23.03.2018 held the petitioner of Cr. Rev. No. 571 of 2022 namely, Mithilesh Kumar to be guilty for the offence under Section 138 of the N.I. Act and sentenced 03 months of S.I. as well as fine of Rs.1,50,000/- with further order that if the fine is not deposited then the convict would serve 01 month S.I. in lieu of the same.
2. The Revisionist of Cr. Rev. No. 571 of 2022 preferred Cr. Appeal No. 99 of 2018 against the judgment of conviction dated 23.03.2018 passed by learned Sub Judge II cum ACJM-II, Patna. The learned appellate court vide its judgment dated 27-04-2022 partly allowed the appeal and partly dismissed the appeal and modified the fine of Rs.1,50,000/- to Rs.75,000/- while upholding the sentence awarded by the trial court. The judgment passed by District Appellate Court dated 27/04/2022 has been impugned in Cr. Rev. No. 571 of 2022 by the convict / petitioner and also by the complainant-petitioner in Cr. Rev. No. 646 of 2022 being aggrieved by the reduction of fine from Rs.1,50,000 to Rs.75,000/-.
3. At the time of argument learned counsel appearing for petitioners in both the revision application jointly submitted that by the intervention of the family, friends and relatives of both the parties, they have entered into a joint compromise settlement. As per the terms of compromise the petitioner of Cr. Rev. No. 571 of 2022 has issued a demand draft of Rs.1,25,000/-[one lakh twenty five thousand] bearing Draft No. 154189 dated 12-09-2023 of Kotak Mahindra Bank in favour of the Opposite Party No. 2 of Cr. Revision No. 571 of 2022 and the petitioner of Cr. Rev. No. 646 of 2022. Both the parties have mutually decided and arrived at an amicable settlement willingly and voluntarily. The terms of settlement has jointly been filed by way of joint compromise settlement petition by them which is kept on record. The Bank draft of Rs.1,25,000/-[one lakh twenty five thousand] was produced by the petitioner of Cr. Rev. No. 571 of 2022 before this Court during argument and the same has been kept by the Court Master in his safe custody as per the order dated 18.09.2023 of this Court.
4. Section 147 of the N.I. Act prescribes that notwithstanding anything contained in the Code of Criminal Procedure, 1973 every offence punishable under the N.I. Act shall be compoundable.
5. Section 320 of the Cr.P.C. deals with compounding of the offences under sub-section (6) & (8). Section 320(6) says that the High Court or the court of Sessions in the exercise of its power of revision under Section 401 may allow any person to compound any offence which such person is competent to compound under this section. Section 320 (8) says that the composition of an offence under this Section shall have the effect of acquittal of an accused with whom the offence has been compounded.
6. I have heard learned counsel for the parties and have perused the materials available on record including the joint compromise settlement petition as well as relevant provision under the N.I. Act and Cr.P.C. In pursuance of the joint compromise a bank draft of Rs.1,25,000/- has also been submitted by the petitioner of Cr. Revision No. 571 of 2022 p
AI
The court established that offences under the N.I. Act, specifically Section 138, can be compounded when both parties reach a mutual settlement, leading to acquittal of the accused.
Compromise between parties in a Section 138 NI Act case allows for quashing of conviction, provided conditions for compounding are met.
The court allowed the compounding of an offence under Section 138 of the Negotiable Instruments Act due to a compromise between the parties, resulting in the acquittal of the petitioner.
The offence under Section 138 of the NI Act can be compounded if the parties reach a settlement and the compensation is fully paid.
Convictions under Section 138 of the Negotiable Instruments Act can be compounded at any stage, including after the conviction has been upheld by the appellate court.
The court upheld the principle that a settled dispute between parties can lead to the compounding of an offence under Section 138 of the NI Act, allowing for the quashing of conviction.
The court applied the principle of compounding the offence under Section 147 of the N.I. Act and the requirement of paying graded cost as per the guidelines set by the Supreme Court in Damodar S. Pra....
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