2021 (6) TMI 868 - HC - Indian Laws

Court quashes judgment, emphasizes amicable dispute resolution. Applicant directed to deposit Rs. 50,000.

KHOKHAR ILIYAS BISMILLA KHAN Versus STATEOF GUJARAT & 1 OTHERS

The court allowed the application, quashing the judgment and order dated 31.12.2019, and set aside the subsequent proceedings. The applicant was directed ... Dishonor of Cheque - efficacious remedy by way of filing appeal - compounding of the offences - amicable settlement of the dispute - Section 141 of the Negotiable Instruments Act, 1881 - HELD THAT:- Considering the object of Section 138 of the NI Act, which is mainly to inculcate faith in the efficacy of banking operations and credibility of transacting business through cheque as also taking into account the provisions of Section 147 which states that every offence punishable under this Act shall be compoundable. Further, it is mainly a transaction between the private parties where the State is not affected. This Court is aware that the ideal remedy for the parties ought to have been to prefer an appeal as available under the law. The guidelines as prescribed in the case of DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT] also provide for instituting proceedings for compounding the offence before the appellate court as the present proceedings are preferred after an order of conviction by a competent court. Taking into account the fact that the parties have settled the dispute amicably,in view of this court the compounding of the offence is required to be permitted - Application allowed. Generally the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however considering the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to appellate court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties and hence, the present application is entertained. Issues Involved:1. Quashing of the impugned judgment and order dated 31.12.2019.2. Compounding of the offence under Section 138 of the Negotiable Instruments Act, 1881.3. Settlement and compromise between the parties.4. Legal precedents and guidelines for compounding offences under the NI Act.5. Costs to be imposed for compounding the offence.Detailed Analysis:1. Quashing of the Impugned Judgment and Order:The applicant sought to quash the judgment and order dated 31.12.2019 passed by the learned 4th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Mehsana, which convicted the applicant under Section 138 of the Negotiable Instruments Act, 1881, imposing one year of Simple Imprisonment and directing the applicant to pay compensation of Rs. 13,50,000/-. The applicant also sought a stay on the execution of this judgment pending the hearing of the present application.2. Compounding of the Offence under Section 138 of the NI Act:The court noted that Section 147 of the NI Act allows for the compounding of offences under the Act, overriding the general provisions of the Code of Criminal Procedure. The court referred to various judgments, including the Supreme Court's decision in Damodar S. Prabhu v. Sayed Babalal H., which provided guidelines for compounding offences under the NI Act and emphasized the priority of the compensatory aspect over the punitive aspect in cheque dishonor cases.3. Settlement and Compromise Between the Parties:The applicant and the original complainant reached an amicable settlement, which was documented in an affidavit. The complainant confirmed the receipt of the outstanding cheque amount and expressed no desire to continue with the proceedings. The court recognized the settlement and the complainant's willingness to withdraw the complaint, noting that there was no coercion or threat involved in the compromise.4. Legal Precedents and Guidelines for Compounding Offences:The court relied on several precedents, including:- Narottambhai Karshandas Nanda v. State of Gujarat, which emphasized that a dispute under Section 138 of the NI Act could be settled by compromise.- Kirpalsingh Pratapsingh Ori v. Salvinder Kaur Hardisingh Lobana, which highlighted the non obstante clause in Section 147 of the NI Act, allowing for compounding irrespective of the provisions of the CrPC.- Damodar S. Prabhu v. Sayed Babalal H., where the Supreme Court provided a graded scheme for imposing costs to encourage early compounding of offences.5. Costs to be Imposed for Compounding the Offence:The court considered the guidelines from Damodar S. Prabhu's case, which suggested costs for compounding at different stages of litigation. The applicant was directed to deposit Rs. 50,000 with the Gujarat State Legal Services Authority, considering the COVID-19 pandemic and the applicant's financial situation.Conclusion:The court allowed the application, quashing the judgment and order dated 31.12.2019, and set aside the subsequent proceedings. The applicant was directed to deposit Rs. 50,000 with the Gujarat State Legal Services Authority, and upon production of the receipt, the present judgment and order would be given effect. The court emphasized the importance of settling disputes amicably and the role of Section 147 of the NI Act in facilitating such settlements.