2021 (8) TMI 244 - HC - Indian Laws

High Court allows compounding of offense under Section 138 NI Act, acquits accused upon settlement

The High Court allowed the compounding of the offense under Section 138 of the Negotiable Instruments Act, 1881, in a case where the accused was convicted ... Dishonor of cheque - amicable settlement of the matter - seeking permission for compounding the matter - Section 147 of the N.I. Act - HELD THAT:- The Court is convinced that both parties have settled the matter amicably out of their own volition and free consent and without there being any coercion, fraud or misrepresentation and also keeping their best interest in consideration, as such, there is no reason for denying the permission for settling the matter. Section 147 of the N.I. Act has made every offence punishable under the N.I. Act as compoundable. As such, there is no bar for the parties in proceeding to compound the offence - The enquiry made with the parties who are physically present convinces the Court that both the parties out of their free consent and volition and in their best interest have settled the matter which is further corroborated by the submissions made by their learned counsels. On the terms of the said joint application, the parties be permitted to compound the offence punishable under Section 138 of the N.I. Act, however, subject to the payment of the graded cost by the petitioner/accused - Joint application filed by both side under Section 147 of the Negotiable Instruments Act, 1881, is allowed and the parties to the present petition are permitted to compound the offence, however, subject to the petitioner herein (accused) paying a sum of ₹ 11,250/- towards graded cost. Petition disposed off. Issues:1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.2. Appeal against the conviction in the Sessions Judge's Court.3. Application for compounding under Section 147 of the N.I. Act.4. Guidelines for compounding offenses under the N.I. Act.5. Decision on compounding and acquittal.The judgment involved a case where the petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881 by the Trial Court. The respondent, who was the complainant, pursued the case after the accused failed to meet the demand made in the notice issued under the Act. The petitioner appealed the conviction in the Sessions Judge's Court, which confirmed the conviction. The accused then filed a revision petition challenging the confirmation of the conviction.The matter was listed before the High Court, with both parties and their counsels physically present. Both sides filed a joint application under Section 147 of the N.I. Act seeking permission for compounding the offense. The parties stated they had settled the matter amicably, with the petitioner agreeing to pay a sum of Rs. 54,000 by cash to the respondent and release Rs. 21,000 deposited before the Trial Court.After considering the joint application and hearing both sides, the Court found that the parties had settled the matter voluntarily and without coercion. The Court noted that every offense under the N.I. Act is compoundable under Section 147 but also mentioned the guidelines set by the Supreme Court regarding imposing graded costs on the litigants.Upon being convinced that the parties had settled the matter willingly and in their best interest, the Court allowed the compounding of the offense under Section 138 of the N.I. Act, subject to the accused paying a graded cost. The judgment disposed of the revision petition, setting aside the previous convictions and ordering the acquittal of the accused upon payment of the graded cost within fifteen days.The Court directed the Trial Court to release the amount deposited by the petitioner to the respondent after the payment of the graded cost. A copy of the order was to be transmitted to the Trial Court and the Sessions Judge's Court for necessary action.This detailed analysis covers the issues involved in the legal judgment, the application for compounding, the guidelines for compounding offenses under the N.I. Act, and the final decision on compounding and acquittal.