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2023 Supreme(P&H) 1729

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Aman Chaudhary, J.
Santosh Kumari – Appellant
Versus
Usha Rani & Anr. – Respondents
C.R.R. No. 3177 of 2019
Decided On : 07-07-2023

Advocates appeared:
For the Parties : Mr. Angrej Kumar, Mr. Vishnu Dutt, Mr. Naveen Bawa

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Revision against conviction for dishonor of cheque - Petitioner was convicted and sentenced to one year imprisonment - The cheque issued for friendly loan was dishonored due to insufficient funds, following which legal notice was sent and action initiated - Parties later reached an amicable settlement - Court upheld the compounding of the offense as permissible - The resolution allows for the acquittal of the petitioner, but a compounding fee is imposed instead of waiver. (Paras 1, 12, 14)

(B) Legal principle of compounding - The court stressed the nature of the offense as primarily civil and compoundable, allowing settlement even post-conviction under Section 147 enabling this compounding. (Paras 10-13)

Facts of the case:
The petitioner was convicted under Section 138 for issuing a bounced cheque of Rs. 2,70,000/- after a friendly loan. Both parties later settled the matter through mediation and agreed to compound the offense. (Paras 1-9)

Findings of Court:
The High Court noted the compromise reached and allowed the compounding of the offense, setting aside the conviction while imposing a reduced compounding fee. (Paras 14-15)

Issues: Whether the offense under Section 138 can be compounded after conviction and the validity of the settlement reached by the parties. (Paras 10-15)

Ratio Decidendi: The court reaffirmed that offenses under Section 138 are compoundable even at appellate stages. The Security and credibility concerns of business transactions must be balanced with their settlements. (Paras 10-14)

Result: Revision petition allowed. Conviction and sentence set aside upon compounding, with order to pay costs. (Para 14)

Table of Content
1. overview of conviction under section 138. (Para 1 , 2 , 3 , 4)
2. acknowledgment of amicable settlement by parties. (Para 6 , 7)
3. court's referral to mediation and discussion. (Para 8 , 9)
4. judicial precedents supporting compounding of the offense. (Para 10 , 11 , 12 , 13 , 14)
5. final order acquitting petitioner and costs imposed. (Para 15 , 16)

Judgment

Mr. Aman Chaudhary, J.

Challenge in the present revision is to the judgment dated 08.11.2019 passed by learned Additional Sessions Judge, Ludhiana, dismissing the appeal filed against the judgment and order dated 14.02.2017, rendered by the learned Judicial Magistrate, 1st Class, Ludhiana whereby the petitioner was convicted and sentenced to undergo rigorous imprisonment for one year for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the Act’).

2. The facts relevant as narrated in the complaint filed under Section 138 of the Act by the complainant-respondent are that the accused-petitioner had taken a friendly loan from the complainant and in order to discharge her liability, she had issued a cheque bearing No.115480 dated 17.09.2013, for a sum of Rs.2,70,000/- in her name. When the said cheque was presented for encashment by the complainant in her bank, it was dishonoured by the banker of the accused vide memo dated 18.09.2013 with the remarks “opening balance insufficient”. The complainant sent a legal notice dated 08.10.2013 to the accused-petitioner but he failed to make the payment. The proceedings against her were initiated under Section 138 of the Act, pursuant to which, the accused appeared on 22.11.2013 and was released on bail. On finding prima facie case under Section 138 of the Negotiable Instrument Act 1881, notice of accusation was served upon the accused-petitioner, to which she pleaded not guilty and claimed trial.

3. In order to prove her case, complainant herself entered into the witness box as CW1 and tendered her duly sworn affidavit, Ex.CA in evidence and other documentary evidence. She also examined Ajit Kumar as CW2, who proved the DDR regarding missing cheque. On closure of her evidence, statement of accused-petitioner under Section 313 of Cr.P.C was recorded, she denied all the allegations raised against her and pleaded innocence by stating that she had returned the alleged amount. In defence, she examined DW1 Kulwant Singh and DW2 Sukhbir Singh.

4. After scrutinizing the evidence led by the parties, the trial Court came to the conclusion that the complainant has successfully proved her case against the petitioner-accused, and convicted and sentenced the accused-petitioner, as mentioned in para no.1 above. Aggrieved convict-petitioner filed appeal, which was dismissed by the learned Additional Sessions Judge, Ludhiana vide impugned judgment dated 08.11.2019.

5. Hence, the present revision petitions.

6. Learned counsel for the petitioner states that in pursuance of order dated 10.03.2019, both the parties had appeared before the Mediator at Ludhiana for settling the matter, where with the assistance of the Mediator, they have arrived at an amicable settlement and resolved the dispute. In this regard a written agreement of settlement dated 19.04.2019 has been executed, copy of which is produced and taken on record as Mark ‘A’. Learned counsel prays that the compounding fee be waived off, as the petitioner is a poor widow lady, suffering from heart ailment, having four children including three daughters, one of whom is also a widow and residing with the petitioner and one is unmarried. They all are residing in a rented accommodation. The petitioner has with great difficulty managed to collect the money and settled the dispute as she wanted to put an end to the same, ten years having gone by.

7. Learned counsel for respondent No.1 also admits the factum of compromise and states that as per the settlement, the complainant has received the agreed amount. Therefore, he has no objection, if the prayer m

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