2004 (4) TMI 652 - HC - Indian Laws

High Court quashes conviction under Section 138 NI Act, accepts compromise, acquits accused, imposes costs.

The High Court, after considering the legality and validity of the conviction and sentence under Section 138 of the Negotiable Instruments Act, accepted ... Compounding of offence - Section 147 of the Negotiable Instruments Act - inherent powers under Section 482 Cr.P.C. - non-obstante clause and supremacy of special law - permissibility of compounding after conviction and dismissal of revision - exercise of extraordinary jurisdiction in special circumstances - relation between Section 320 Cr.P.C. and special statuteSection 147 of the Negotiable Instruments Act - non-obstante clause and supremacy of special law - relation between Section 320 Cr.P.C. and special statute - Whether an offence under Section 138 of the Negotiable Instruments Act can be compounded after conviction and at revisional or post-revisional stages without prior permission of High Court or Court of Session under Section 320 Cr.P.C. - HELD THAT: - The Court held that Section 147 of the Negotiable Instruments Act, which begins with a non-obstante clause and expressly provides that every offence punishable under the Act shall be compoundable, operates as a special law prevailing over the general procedural provisions of Section 320 Cr.P.C. The scheme and legislative purpose of the N.I. Act (including legislative amendments and objects) show a policy to facilitate settlement of cheque dishonour cases; thus compounding under Section 147 does not import a condition precedent of prior permission under Section 320(6) Cr.P.C. The nature and object of the special enactment permit compromise at any stage, including after conviction and dismissal of revision, subject to the Court being satisfied as to genuineness and exercising its jurisdiction prudently to secure ends of justice. [Paras 23, 24, 25, 26, 27]Offence under Section 138 N.I. Act is compoundable post-conviction and post-dismissal of revision without mandatory prior permission under Section 320 Cr.P.C.; the compromise between the parties is acceptable and can lead to acquittal where the Court, in exercise of its jurisdiction, is satisfied.Inherent powers under Section 482 Cr.P.C. - exercise of extraordinary jurisdiction in special circumstances - permissibility of compounding after conviction and dismissal of revision - Whether the High Court may entertain a petition under Article 226/Section 482 Cr.P.C. seeking quashing of conviction on the ground of compounding where an earlier revision under Section 397/401 Cr.P.C. was dismissed. - HELD THAT: - The Court acknowledged the general rule that petitions invoking Section 482 are not maintainable where an earlier revision seeking similar relief has been dismissed on merits, unless special circumstances are shown. However, it held that where special circumstances are made out and the parties (or both complainant and accused) present a genuine compromise, the High Court may, in the exercise of its inherent and extraordinary jurisdiction, entertain such a petition to prevent miscarriage of justice and to secure substantial justice at the door-step of the parties. The Court further noted that when both parties approach the Court and the statutory scheme (Section 147 N.I. Act) does not require prior permission, the petitioners stand on a better footing to seek quashing of conviction on compounding grounds. [Paras 16, 17, 20, 29, 30]A petition under Article 226/Section 482 Cr.P.C. is maintainable in special circumstances to give effect to a genuine compromise in an N.I. Act case even after dismissal of a revision; the Court may exercise its inherent jurisdiction to quash conviction on compounding.Compounding of offence - exercise of extraordinary jurisdiction in special circumstances - judicial restraint and safeguards - Whether, on the facts of this case, the compromise between the parties should be accepted and the conviction and sentence set aside. - HELD THAT: - The Court examined the recorded negotiations, the written compromise and affidavit, the history of adjournments and extensions, and the payment made by the accused to the complainant. Applying the principles that Section 147 permits compounding and that inherent jurisdiction may be exercised where special circumstances exist, the Court was satisfied as to genuineness of the out-of-court compromise. The Court also recognised the need for safeguards (satisfaction of the Court, involvement of complainant, costs) to prevent misuse and to address contingencies such as refund or liability for costs where appropriate. [Paras 11, 12, 31, 32, 33]The written compromise is accepted as genuine; the conviction and sentence are quashed and set aside, the accused is treated as acquitted on compounding, and both petitions are allowed subject to costs.Final Conclusion: The High Court accepted the out-of-court compromise under Section 147 N.I. Act, held that such compounding is permissible even after conviction and dismissal of revision without mandatory prior permission under Section 320 Cr.P.C., exercised its inherent jurisdiction in special circumstances to quash the conviction and sentence, treated the accused as acquitted on compounding, and allowed both petitions with costs. Issues Involved:1. Legality and validity of the conviction and sentence under Section 138 of the Negotiable Instruments Act (N.I. Act).2. Compounding of the offence under Section 147 of the N.I. Act.3. Jurisdiction of the High Court under Article 226 of the Constitution and Section 482 of Cr.P.C. after dismissal of a revision application.Detailed Analysis:1. Legality and Validity of the Conviction and Sentence under Section 138 of the N.I. Act:The petitioner was convicted by the Judicial Magistrate First Class (J.M.F.C.), Vadodara, for an offence under Section 138 of the N.I. Act due to a dishonored cheque. The conviction was upheld by the Additional Sessions Judge. The accused argued that other partners responsible for the business were not included as co-accused, but the Court maintained that it was the complainant's choice to include them. The High Court found no illegality, irregularity, or infirmity in the orders of the trial and appellate courts.2. Compounding of the Offence under Section 147 of the N.I. Act:Both parties sought to compound the offence under Section 147 of the N.I. Act, which allows compounding of offences notwithstanding other laws. The accused negotiated a compromise, and an amount of Rs. 1,05,000 was paid to the complainant. The Court noted that Section 147 of the N.I. Act, with its non-obstante clause, permits compounding of the offence irrespective of the procedural constraints of the Cr.P.C. This provision prevails over the general procedural law, enabling the parties to settle the matter out of court.3. Jurisdiction of the High Court under Article 226 of the Constitution and Section 482 of Cr.P.C. after Dismissal of a Revision Application:The Court considered whether it could exercise its inherent powers under Section 482 of Cr.P.C. and Article 226 of the Constitution to quash the conviction after a revision application was dismissed. The Court acknowledged that while normally petitions invoking inherent powers under Section 482 Cr.P.C. are not maintainable after the dismissal of a revision application, special circumstances can justify such intervention. The Court cited precedents where extraordinary jurisdiction was exercised to prevent miscarriage of justice and to honor the spirit of a compromise.Conclusion:The High Court accepted the compromise between the parties as genuine and quashed the conviction and sentence. The Court emphasized that the non-obstante clause in Section 147 of the N.I. Act allows for compounding of the offence at any stage, including post-revision. The accused was acquitted on account of the compounding of the offence, and the petitions were allowed with costs imposed on both petitioners.