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2025 Supreme(Online)(Mad) 28827
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judge, J
Revision Petitioner – Appellant
Versus
respondent – Respondent
Criminal Revision Case | C.A.No.211 of 2020 | C.C.No.366 of 2013
For the Appellants/Petitioners: Mr.T.R.Ravi
For the Respondents: Mr. K. Selvakumar, Mr.A.Gopinath
The offence under Section 138 of the Negotiable Instruments Act is compoundable at any stage, allowing for annulment of conviction upon settlement between parties.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 and Section 147 - Conviction for dishonor of cheque - Conviction upheld by appellate court - Compromise reached between parties during revision - Court allows compounding of the offence, treating the accused as acquitted - Previous conviction and sentence annulled. (Paras 3, 49)
(B) Compounding of offences - Offences under the Negotiable Instruments Act can be compounded at any stage, including after conviction - Compounding primarily compensatory, not punitive - Inherent powers of the court can be exercised to secure ends of justice. (Paras 14, 45)
Facts of the case:
The accused borrowed Rs.1,25,000/- and issued a cheque for Rs.1,75,000/- which was dishonored due to insufficient funds. After legal notice and failure to pay, the complainant filed a complaint under Section 138 of the NI Act. The trial court convicted the accused and imposed a sentence. The appellate court confirmed the conviction. (Paras 4, 6)
Findings of Court:
The court found that the parties had settled the dispute and allowed the compounding of the offence, thus annulling the previous conviction and sentence. (Paras 49, 50)
Issues: Whether the conviction under Section 138 of the Negotiable Instruments Act can be set aside based on a compromise between the parties. (Paras 23)
Ratio Decidendi: The court ruled that the offence under Section 138 is compoundable at any stage, and the inherent power of the court allows for the annulment of convictions in light of a settlement. (Paras 45, 49)
Result: Criminal Revision Case disposed of in terms of compromise; conviction and sentence annulled; accused acquitted.
| Table of Content |
|---|
| 1. background of the case and initial conviction. (Para 2 , 3 , 4) |
| 2. trial court's proceedings and conviction details. (Para 5 , 6 , 7) |
| 3. settlement and payment of disputed cheque amount. (Para 8 , 9 , 10 , 11 , 12 , 13) |
| 4. arguments regarding compounding of offences. (Para 14 , 15 , 16 , 19) |
| 5. opposition to the compounding by the state. (Para 20 , 21) |
| 6. court's observations on inherent powers and justice. (Para 22 , 23 , 24) |
| 7. discussion on the legal framework for compounding. (Para 25 , 26 , 27) |
| 8. criteria for invoking inherent powers of the court. (Para 29 , 30) |
| 9. conditions under which compounding can be allowed. (Para 31 , 32 , 33) |
| 10. interpretation of special vs. general law in compounding. (Para 34 , 35 , 36) |
| 11. compounding of offences under the n.i. act. (Para 37 , 38 , 39) |
| 12. emphasis on compensatory aspect over punitive. (Para 40 , 41 , 42) |
| 13. final observations on the court's decision. (Para 43 , 44 , 45) |
| 14. conclusion on the case and directions for the trial court. (Para 46 , 47 , 48) |
ORDER
Heard Mr.T.R.Ravi, the learned counsel appearing for the Revision Petitioner and Mr. K. Selvakumar, learned counsel appearing for the respondent and also this Court has taken the assistance of Mr.A.Gopinath, learned Govt. Advocate (crl.side).
2.The instant Criminal Revision Case has been filed challenging the conviction and sentence passed in C.A.No.211 of 2020 dated by the learned III Add, confirming the conviction and sentence made in C.C.No.366 of 2013, dated 18.09.2017 passed by the learned Judicial Magistrate Fast Track Court No.1, Coimbatore.
3. The learned trial Judge has convicted the Revision Petitioner/accused under section 138 of Negotiable Instruments Act and sentenced him to undergo SI for a period of six months and also directed him to pay a compensation of Rs.1,75,000/- within two months from the date of judgment, in default, to undergo SI for two months. The conviction and sentence imposed by the trial court was also confirmed by the First Appellate Court.
4. The facts leading to filing of this Civil Revision Petition is as follows:
(1) The Revision Petitioner borrowed a sum of Rs.1,25,000/- on m21.10.2014 from the respondent/complainant and agreed to pay the same with interest at the rate of 18% per annum. Since the revision petitioner failed to repay the interest and principal amount, the respondent demanded to pay the amount.
(ii) In order to repay the loan amount, he issued a cheque for a sum of Rs.1,75,000/- on 15.02.2017 bearing cheque No.208646 drawn at State Bank of Travancore, Odanthurai Branch, Mettupalayam in favour of the respondent and when it was presented for encashment through his Bankers namely Bank of Baroda, Saibaba Colony Branch, Coimbatore, the same was returned with an endorsement “Funds Insufficient', vide return memo dated 16.02.2017.
(iii) Inspite of repeated demands, since the revision petitioner did not pay the cheque amount, the respondent issued a legal notice dated 27.02.2017 an on receipt of the same, the revision petitioner issued a reply dated 08.03.2017.
(iv) As the revision petitioner did not repay the cheque amount, the respondent preferred a private complaint in C.C.No.315 of 2018 before the Judicial Magistrate, Fast Track Court, Magisterial Level-I, Coimbatore.
5. After recording the sworn statement of the respondent and after being satisfied that prima facie case has been made out to proceed further against the Revision Petitioner for the offence under section 138 of NI Act, the trial Court has issued summon to the Revision Petitioner. On the appearance of the Revision Petitioner, copies have been furnished and the substance of allegation has been put to him. The Revision Petitioner has denied the allegation and has claimed to be tried.
6. After considering the arguments, the learned trial court has found the Revision Petitioner guilty of the offence under section 138 of the Negotiable Instruments Act and the Revision Petitioner has been convicted and sentenced to underg
