2021 (8) TMI 728 - HC - Indian Laws

High Court quashes conviction, treats petitioner as acquitted under

The High Court allowed the petition under Section 482 Cr.P.C., quashing the conviction and sentence under Section 138 of the Negotiable Instruments Act. ... Compounding of offences - inherent powers under Section 482 Cr.P.C. - overriding effect of Section 147 of the Negotiable Instruments Act - compensatory object of Section 138 of the Negotiable Instruments Act - judicial guidelines for delayed compounding (Damodar S. Prabhu) - acquittal on compoundingInherent powers under Section 482 Cr.P.C. - compounding of offences - acquittal on compounding - High Court's power to set aside its earlier confirmation of conviction by invoking inherent jurisdiction under Section 482 Cr.P.C. in view of a subsequent compromise between the parties. - HELD THAT: - The Court held that inherent powers under Section 482 Cr.P.C. may be exercised even after dismissal of a revision petition where substantial justice, prevention of miscarriage or abuse of process requires it. Though ordinarily such powers are to be exercised sparingly and alternative statutory remedies weigh against invocation, special circumstances - including a genuine out of court compromise in a matter where the statute expressly makes the offence compoundable - can justify interference. The Court noted the twin objectives guiding exercise of Section 482 (prevent abuse of process and secure ends of justice) and accepted that, in the peculiar facts before it, relegating parties to further appellate remedies would not serve the ends of justice. Therefore the conviction and sentence confirmed earlier were quashed and the petitioner treated as acquitted on account of compounding in terms of the settlement, with a modest costs order to the State. [Paras 17, 18, 20, 36, 40]Petition under Section 482 Cr.P.C. allowed; earlier conviction and sentence under Section 138 N.I. Act quashed and petitioner acquitted on account of compounding in terms of the compromise, subject to payment of costs.Overriding effect of Section 147 of the Negotiable Instruments Act - compensatory object of Section 138 of the Negotiable Instruments Act - judicial guidelines for delayed compounding (Damodar S. Prabhu) - Whether offences under Section 138 N.I. Act can be compounded at any stage and the role of Section 147 N.I. Act in relation to Section 320 Cr.P.C., including application of compensatory emphasis and guidelines for compounding. - HELD THAT: - The Court observed that Section 147 of the Negotiable Instruments Act, beginning with a non obstante clause, makes offences under the Act compoundable and thereby permits compromise irrespective of conflicting procedural provisions in the Cr.P.C. The object of Section 138 is primarily compensatory; compounding is consistent with that object and may be allowed at any stage, even after dismissal of revision, where the compromise is genuine and justice so requires. The Court accepted that the procedural scheme of Section 320 Cr.P.C. cannot be slavishly applied to Section 147, but endorsed the utility of the guidelines in Damodar S. Prabhu for framing conditions (including costs) when compounding is permitted belatedly. Applying these principles, and having regard to the recorded compromise, the Court permitted compounding and applied an appropriate costs direction. [Paras 31, 32, 34, 35, 39]Offence under Section 138 N.I. Act is compoundable at any stage in view of Section 147; courts may permit compounding consistent with the compensatory object of the provision and having regard to established guidelines for late compounding.Final Conclusion: The High Court, exercising its inherent jurisdiction under Section 482 Cr.P.C., allowed the petition and quashed the conviction and sentence under Section 138 N.I. Act on account of a genuine compromise between the parties; the Court held that Section 147 N.I. Act permits compounding at any stage and that courts may, applying established judicial guidelines, accept belated compromises subject to appropriate conditions and costs. Issues Involved:1. Compounding of offence under Section 138 of the Negotiable Instruments Act.2. Quashing of the sentence of one year awarded to the petitioner.3. Maintainability of a petition under Section 482 Cr.P.C. after dismissal of a criminal revision petition.4. Application of Section 147 of the Negotiable Instruments Act overriding Section 320 Cr.P.C.5. Inherent powers of the High Court under Section 482 Cr.P.C.Issue-wise Detailed Analysis:1. Compounding of Offence under Section 138 of the Negotiable Instruments Act:The petitioner issued two cheques of Rs. 1,00,000 each, which were dishonored due to insufficient funds, leading to a complaint under Section 138 of the N.I. Act. The petitioner was convicted and sentenced to one-year simple imprisonment and a fine of Rs. 3,00,000. The petitioner and the complainant later entered into a settlement, agreeing to pay the remaining amount of Rs. 2,00,000 via a demand draft. The court acknowledged the compromise and referred to the case of Damodar S. Prabhu vs. Sayed Babalal H, which provided guidelines for compounding offences under Section 138, emphasizing the compensatory nature of the N.I. Act over its punitive aspects.2. Quashing of the Sentence of One Year Awarded to the Petitioner:The petitioner sought to quash the one-year sentence based on the compromise reached with the complainant. The court noted that the primary object of Section 138 is compensatory, and the punitive element is secondary. The court referred to M/s Meters and Instruments Private Limited vs. Kanchan Mehta, which held that the offence under Section 138 is primarily a civil wrong and can be compounded at any stage, even without the complainant's consent if the court is satisfied that the complainant has been duly compensated.3. Maintainability of a Petition under Section 482 Cr.P.C. after Dismissal of a Criminal Revision Petition:The petitioner filed a petition under Section 482 Cr.P.C. after the dismissal of a criminal revision petition. The court examined whether such a petition is maintainable and referred to the case of Kripal Singh Pratap Singh Ori vs. Salvinder Kaur Hardip Singh, which held that petitions invoking inherent powers under Section 482 Cr.P.C. can be entertained if special circumstances are made out, even after the dismissal of a revision application.4. Application of Section 147 of the Negotiable Instruments Act Overriding Section 320 Cr.P.C.:The court analyzed the applicability of Section 147 of the N.I. Act, which allows for the compounding of offences notwithstanding anything contained in the Cr.P.C., including Section 320. The court emphasized that Section 147 has an overriding effect, allowing the compounding of offences under the N.I. Act at any stage, including after the dismissal of a revision application.5. Inherent Powers of the High Court under Section 482 Cr.P.C.:The court discussed the inherent powers under Section 482 Cr.P.C., which include quashing FIRs, investigations, or any criminal proceedings to secure the ends of justice and prevent abuse of the process of the court. The court referred to the case of Narinder Singh vs. State of Punjab, which laid down the twin objectives of preventing abuse of the process of the court and securing the ends of justice. The court held that it is justified to invoke Section 482 Cr.P.C. to quash the conviction and sentence in light of the compromise reached between the parties.Conclusion:The court allowed the petition under Section 482 Cr.P.C., quashing the conviction and sentence under Section 138 of the N.I. Act in Complaint Case No.515 of 2016. The petitioner was treated as acquitted on account of the compounding of the offence with the complainant. The court also directed the petitioner to pay costs of Rs. 5000 to the State and released the deposited amount of Rs. 1,00,000 in favor of the complainant.