2018 (8) TMI 1236 - HC - Indian Laws

Court denies petition for compounding offenses under Section 138 of NI Act due to delaying tactics, imposes costs.

Manoj Kaul Versus State of NCT & Anr.

Manoj Kaul Versus State of NCT & Anr. - TMI Issues:1. Application under Section 147 of the Negotiable Instruments Act, 1881 for compounding of offense under Section 138.2. Appeal against the order declining the application before the Court of Sessions.3. Invocation of inherent power and jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 for intervention.4. Settlement agreement between parties and subsequent developments.5. Dispute regarding dishonored cheques and ongoing legal proceedings.6. Consideration of the Supreme Court's observations in Meters and Instruments Private Limited & Anr. Vs. Kanchan Mehta, 2017.7. Abuse of the process of law and dismissal of the petition with costs.Analysis:1. The petitioner, one of the accused facing prosecution under Section 138 of the Negotiable Instruments Act, 1881, sought to compound the offense through an application under Section 147, which was initially declined by the Metropolitan Magistrate and later by the Court of Sessions. The petitioner then approached the High Court invoking inherent power under Section 482 of the Code of Criminal Procedure, alleging abuse of the legal process.2. The case involved dishonored cheques issued by the petitioner as an authorized signatory of a company, leading to a criminal complaint by the second respondent. Despite attempts at settlement and issuance of post-dated cheques, subsequent dishonors and delays in payment led to ongoing legal proceedings and warrants against the accused.3. The High Court considered the settlement agreement, subsequent developments, and the conduct of the parties. The petitioner's reliance on the Supreme Court's observations regarding compounding of offenses under Section 138 was noted, emphasizing the compensatory nature of such cases and the need for appropriate compensation.4. However, the Court found the petitioner's actions to be delaying tactics, causing undue hardship to the complainant and prolonging the legal process. The failure to honor commitments and settle the dues in full, including interest, was highlighted as detrimental to the credibility of cheque transactions and contrary to the objectives of the law.5. Ultimately, the High Court concluded that the petitioner's conduct amounted to an abuse of the legal process. The petition was dismissed with costs imposed on the petitioner. The Court emphasized the need for timely and fair resolution of disputes under Section 138 of the Negotiable Instruments Act, 1881, to uphold the credibility of financial transactions and ensure justice for all parties involved.