2021 (7) TMI 1154 - HC - Indian Laws

Court quashes conviction under Section 138 for dishonoring cheques, promotes amicable settlements

The court, applying Section 482 of the Code of Criminal Procedure, allowed the application to quash a conviction under Section 138 of the Negotiable ... Dishonor of Cheque - Trial Court awarded punishment in the form of imprisonment for the said offence - dispute is amicably settled with the respondent no.2-complainant, with regard to the offence, after the order of conviction is passed - complainant filed an affidavit interalia stating that if the order of conviction passed against the applicants is quashed and set aside, he has no objection - compounding of offences - HELD THAT:- This Court, in the case of Khokhar Iliyas Bismilla Khan Vs. State of Gujarat & Anr. [2021 (6) TMI 868 - GUJARAT HIGH COURT] , had an occasion to deal with a similar issue which is involved in the present matter, where it was held that 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. Thus, when the parties have settled the dispute amicably, compounding of the offence is required to be permitted - However at this stage, it is required to be noted that the respondent no.2 has filed a complaint under Section 138 of the N.I. Act for dishonour of cheque amounting to ₹ 1,43,606/- and, hence as per the decision rendered by the Hon'ble Supreme Court, suitable amount i.e 15% of ₹ 1,43,606/- is required to be deposited by the applicants with the Gujarat State Legal Services Authority. Application allowed. Issues:- Application under Section 482 of the Code of Criminal Procedure to quash a judgment and order of conviction under Section 138 of the Negotiable Instruments Act.- Compounding of offence after conviction under Section 138 of the N.I. Act.- Settlement between parties leading to a request for quashing the conviction.- Guidelines for compounding offences under the N.I. Act as per Supreme Court decisions.- Deposit required for compounding as per the guidelines.Analysis:1. The judgment dealt with an application under Section 482 of the Code of Criminal Procedure seeking to quash a conviction under Section 138 of the Negotiable Instruments Act. The applicants were convicted by the trial court and sentenced to imprisonment and a fine for dishonoring cheques totaling a specific amount. The applicants requested the quashing of the conviction based on a settlement reached with the complainant.2. The settlement between the parties was a crucial aspect of the case, as the complainant filed an affidavit stating no objection to quashing the conviction due to the amicable resolution. The court considered the settlement and the willingness of the applicants to deposit a required amount with the Gujarat State Legal Services Authority for compounding the offence post-conviction.3. The judgment referred to relevant legal precedents, including the Supreme Court's guidelines on compounding offences under the N.I. Act. It highlighted the conditions and percentages of the cheque amount that needed to be deposited for compounding at different stages of the legal process, such as before the Magistrate, Sessions Court, High Court, or Supreme Court.4. The court, after considering the settlement, the willingness of the applicants to comply with the deposit requirement, and the legal guidelines, allowed the application. The judgment quashed the conviction, permitting the applicants to deposit 15% of the cheque amount with the Gujarat State Legal Services Authority within a specified timeframe for the compounding of the offence.5. The judgment emphasized the importance of amicable settlements in criminal cases, especially regarding financial matters like dishonored cheques. By following the legal guidelines and considering the settlement between the parties, the court facilitated the resolution of the dispute through the compounding of the offence, ensuring justice while promoting reconciliation between the parties involved.