2018 (9) TMI 2081 - HC - Indian Laws

Court affirms rejection of compounding application under Section 138; emphasizes complainant's consent.

The Court upheld the trial Court's decision to reject the compounding application under Section 138 of the Negotiable Instruments Act due to the absence ... Dishonor of cheque - compounding of offences - compromise arrived at between the parties - HELD THAT:- So far as the compromise between the parties, under which the petitioner can take recourse, is concerned, the same has already been held to be finally revoked by this Court, with further liberty to the respective parties; to prosecute their criminal cases against each other. Therefore, by any means, it would not have been possible for the trial Court to give effect to any kind of agreement/compromise or consent; on the part of the complainant on its own. Whether the application filed by the petitioner for compounding of the offence under Section 138 of Negotiable Instruments Act, would have been allowed even without consent of the complainant? - HELD THAT:- The trial Court has rightly rejected the application for compounding moved by the petitioners; for the lack of necessary consent from the complainant. This Court does not find any illegality or infirmity in the order passed by the trial Court. In the present case, admittedly, there is no consent for compounding on the part of the complainant, therefore, it was impermissible for the trial Court to permit compounding merely on unilateral application moved by the petitioner/accused. Hence the trial Court has not committed any illegality by declining the application for compounding. Petition dismissed. Issues Involved:1. Compounding of offences under Section 138 of the Negotiable Instruments Act without the consent of the complainant.2. Quashing of the complaint and summoning orders.Detailed Analysis:1. Compounding of Offences under Section 138 of the Negotiable Instruments Act without the Consent of the Complainant:The petitioners sought to compound the offences under Section 138 of the Negotiable Instruments Act, arguing that the consent of the complainant was not required for compounding, citing the Supreme Court judgments in *Damodar S. Prabhu v. Sayed Babalal H.* and *M/s. Meters and Instruments Private Limited v. Kanchan Mehta*. They contended that Section 147 of the NI Act, which includes a non-obstante clause, overrides the requirement for the complainant's consent as per Section 320 Cr.P.C.However, the respondents opposed this, arguing that the Supreme Court in *Damodar S. Prabhu* did not address the necessity of the complainant's consent for compounding. They cited *JIK Industries Limited v. Amarlal V. Jumani*, where the Supreme Court held that despite Section 147 of the NI Act, the consent of the complainant is essential for compounding offences under Section 138 of the NI Act.The Court found the arguments of the respondents legally sustainable. It noted that the compromise between the parties had already been declared rescinded, and thus, there was no basis for compounding without the complainant's consent. The Court highlighted that the judgment in *Damodar S. Prabhu* did not specifically deal with the issue of compounding without consent and primarily assumed consent between the parties. The Court emphasized that the judgment in *JIK Industries Limited* clarified that the non-obstante clause in Section 147 of the NI Act does not exclude the need for the complainant's consent for compounding.The Court further noted that despite a subsequent judgment in *M/s. Meters and Instruments Private Limited*, which did not overrule *JIK Industries Limited*, the latter remained binding as it was the first in point of time. The Court relied on the Constitutional Bench judgment in *National Insurance Company Limited v. Pranay Sethi*, which stated that in cases of conflicting judgments by co-ordinate Benches, the earlier judgment prevails.Thus, the Court concluded that the trial Court rightly rejected the petitioners' application for compounding due to the absence of the complainant's consent.2. Quashing of the Complaint and Summoning Orders:The petitioners also sought quashing of the complaints and summoning orders, arguing that the complainant had agreed to quash the complaints as part of a compromise during anticipatory bail proceedings. The respondents countered that the petitioners did not fulfill their part of the compromise, leading to its rescission by the Court, which allowed the parties to continue their criminal proceedings.The Court found no merit in the petitioners' argument for quashing the complaints and summoning orders. It noted that the compromise had been declared rescinded, and the parties were granted liberty to prosecute their respective cases. The Court found no factual or legal basis for quashing the complaints and summoning orders and noted that no substantial arguments were presented on this aspect.Conclusion:The petitions were dismissed, with the Court upholding the trial Court's decision to reject the compounding application due to the lack of the complainant's consent and finding no grounds to quash the complaints and summoning orders.