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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Jasjit Singh Bedi, J.
Nidhi Knitwears (p) Ltd. & Anr. – Appellants
Versus
Honey Hosiery Mills – Respondent
CRM-M-13193 -2018 (O & M)
Decided On : 05-05-2022
Compounding - Negotiable Instruments Act - Section 138 - 147, 320 - The court discussed the judgments of the Hon'ble Supreme Court and this Court on the issue of compounding of offences under the Negotiable Instruments Act. The court examined the provisions of Section 147 and the scheme contemplated by Section 320 of the Code of Criminal Procedure. The court also highlighted the guidelines for imposing costs on parties who unduly delay compounding of the offence and the need for consent of the complainant for compounding. The court emphasized the compensatory nature of the offence under Section 138 and the discretion of the court to close the proceedings in the absence of consent, based on the satisfaction that the complainant has been duly compensated.
Fact of the Case:
The complainant filed a complaint under Section 138 of the Negotiable Instruments Act against the accused for dishonour of cheques. The accused were convicted by the trial court, and they filed an appeal seeking permission to compound the offence. The application for compounding was dismissed by the Additional Sessions Judge, leading to the present petition under Section 482 of the Code of Criminal Procedure.
Finding of the Court:
The court analyzed the judgments of the Hon'ble Supreme Court and this Court on the issue of compounding of offences under the Negotiable Instruments Act. The court found that the consent of the complainant is essential for compounding and highlighted the compensatory nature of the offence under Section 138. The court concluded that the application for compounding was rightly dismissed by the lower Appellate Court, as there was no consent for compounding on the part of the complainant.
Issues: The main issue was whether the consent of the complainant is necessary for compounding of the offence under Section 138 of the Negotiable Instruments Act.
Ratio Decidendi: The court held that the consent of the complainant is essential for compounding of the offence under Section 138 of the Negotiable Instruments Act. The court emphasized the compensatory nature of the offence and the discretion of the court to close the proceedings in the absence of consent, based on the satisfaction that the complainant has been duly compensated.
Final Decision: The court dismissed the petition under Section 482 of the Code of Criminal Procedure, upholding the lower Appellate Court's decision to dismiss the application for compounding due to the lack of necessary consent from the complainant.
JUDGMENT
Jasjit Singh Bedi, J. (Oral). - The present petition under Section 482 of the Code of Criminal Procedure has been filed with a prayer for the quashing of the order dated 21.03.2018 (Annexure P-5) passed by Sh. Kuldip Kumar Kareer, Additional Sessions Judge, Ludhiana, in Criminal Crl.A-6 dated 08.02.2016 titled 'Nidhi Knitwears versus Honey Hosiery Mills, vide which the application filed by the petitioner, for permission to compound the offence, has been dismissed.
2. The brief facts of the case are that the complainant/respondent M/s Honey Hosiery Mills filed a complaint, through its sole proprietor Anju Jain under Section 138 of the Negotiable Instruments Act (for short 'the Act') against Chhote Lal Pandit, Director, M/s Nidhi Knitwears, on the ground that the respondent/complainant and petitioners/accused were having business deals and it was alleged in the complaint by respondent that in order to discharge his pre-existing legal liability, petitioner No.2 issued cheques bearing 525363 dated 16.10.2011 for a sum of Rs.77345/-, cheques bearing No.545364 dated 18.10.2011 for a sum of Rs.56251/- and cheque bearing No.541443 dated 10.10.2011 for a sum of Rs.91,400/- all drawn of Bank of Maharashtra, Ludhiana, totalling amount of Rs.2,24,996/-. It was the allegation in the complaint that the cheques were dishonoured with the remark 'payment stopped by drawer'.
3. Pursuant thereto, the accused -petitioners were summoned and finally convicted by the Court of the Judicial Magistrate Ist Class, Ludhiana vide judgment dated 12.01.2016 (Annexure P-1).
4. The petitioners thereafter filed an appeal against the above judgment in the Court of Sessions Judge, Ludhiana. During the pendency of the appeal, the petitioner filed an application for permission to compound the offence in view of the judgement rendered in 'Damodar S. Prabhu versus Syad Babalal H. 2010(2) Vol.V SCC 663', as the petitioners were ready to deposit the cheque amount as well as the relevant charges according to the said judgment. The respondent-complainant filed a response to the application (Annexure P-3) effectively denying the possibility of a settlement (Annexure P-4).
5. Based on the respective pleadings of the parties, the application of the petitioners seeking permission to compound the offence was dismissed by the Court of the Additional Sessions Judge, Ludhiana vide order dated 21.03.2018 (Annexure P-5).
6. In the present case, notice of motion was issued on 02.04.2018 and passing of the final order by the lower Appellate Court was stayed. On 07.03.2022, the learned counsel for the respondent-complainant appeared and both the parties sought an adjournment to effect a settlement. Therefore, the matter was referred to the Medication and Conciliation Centre of this Court to explore the possibility of an amicable settlement. However, the same could not be effected and, therefore, the matter is now ripe for adjudication on merits.
7. The learned counsel for the petitioners contends that in view of the judgment in Damodar S. Prabhu's case (supra), the petitioners were ready and willing to deposit the requisite amount so as to finally settle the matter. She contends that in terms of the judgment of the Hon'ble Supreme Court in 'M/s Meters and Instruments Private Limited And Another versus Kanchan Mehta 2017(4) RCR (Criminal) 476', the consent of the complainant was not relevant and if the Court comes to the conclusion that the settlement was valid. the Court in the interest of justice, on being satisfied that the complainant had been duly compensated, can in its discretion, close the proceedings. Reliance has also been placed on the judgments of this Court in (i) 'Hem Lata versus Balwant Singh (CRR-1221 of 2012 decided on 01.03.2019)', (ii) Suba Singh versus Nirmal Singh and another, 2020(2) PLR 155. Reference has also been made to the judgment passed by the Himachal Pradesh High Court in the case of 'Vikas Jishtu versus Puran Chand Sharma and another, 2019 ACD 711'.
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The court can quash proceedings under Section 138 of the NI Act if the accused compensates the complainant adequately, even without consent.
The main legal point established in the judgment is that in cases of dishonour of cheques, the compensatory aspect of the remedy should be given priority over the punitive aspect. The court also emph....
The court can quash proceedings, including judgments of conviction, in the interest of justice, where a compromise has been arrived at in offences predominantly private in nature.
(1) Offence of dishonour of cheque is fully compoundable.(2) Generally, powers available under Section 482 of Cr.P.C. would not be exercised when a statutory remedy under law is available.
Generally the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however considering the peculiar set of facts and circum....
Point of law: Dishonour of Cheque – Compounding of offence on payment
The main legal point established in the judgment is the importance of promoting compromise and securing the ends of justice, especially in cases where the accused has remitted the entire liability an....
Under Section 147 of the Negotiable Instruments Act, offences are compoundable, allowing for quashing of conviction upon mutual settlement between parties.
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