2021 (12) TMI 280 - HC - Indian Laws

Court accepts compounding request, acquits accused, directs payment of costs to avoid penalties. Legal proceedings concluded.

The court accepted the prayer for compounding the offence under Section 147 of the Negotiable Instruments Act, quashing the judgments of conviction and ... Compounding of offence under Section 147 of the Negotiable Instruments Act - Acceptance of settlement where compensation awarded by court has been realised by complainant - Quashing of conviction and acquittal after compounding - Exercise of judicial power in terms of Damodar S. Prabhu v. Sayed Babalal H. on compounding post-conviction - Award of litigation costs where complainant recovered the amount sued forCompounding of offence under Section 147 of the Negotiable Instruments Act - Exercise of judicial power in terms of Damodar S. Prabhu v. Sayed Babalal H. on compounding post-conviction - Acceptance of settlement where compensation awarded by court has been realised by complainant - Whether the offence punishable under Section 138 of the Negotiable Instruments Act could be compounded under Section 147 after convictions by the courts below where the complainant has received the compensation awarded by the trial court and consents to compounding. - HELD THAT: - The Court noted that the respondent-complainant had received the entire compensation amount awarded by the trial court and, on instructions, expressed no objection to compounding. Relying on the principle affirmed in Damodar S. Prabhu v. Sayed Babalal H. that courts have power under Section 147 to compound the offence even after recording of conviction by lower courts, this Court found no impediment to accept the settlement and exercise its power to compound. The factual matrix showed full realisation of the award by the complainant and a clean instruction of no objection, which grounded the exercise of the compounding power under Section 147 and justified quashing of the convictions consequent to compounding. [Paras 8, 9]The offence was compounded under Section 147 of the Act and, consequent to compounding, the impugned convictions and sentences recorded by the courts below were quashed and set aside and the accused was acquitted.Award of litigation costs where complainant recovered the amount sued for - Judicial discretion to impose costs on accused who occasioned unnecessary litigation - Whether the accused should be directed to pay litigation costs to the complainant despite compounding and acquittal. - HELD THAT: - Although the dispute was compounded and the accused acquitted, the Court observed that the complainant had been unnecessarily compelled to institute and pursue criminal proceedings to recover his money. In exercise of its discretion, the Court ordered the accused to pay a reasonable litigation cost to the complainant to compensate for being dragged into litigation, and stipulated payment within a time frame, with the consequence of penal and contempt proceedings for non-payment. [Paras 9]The accused was directed to pay litigation costs of Rs. 25,000 to the complainant within four weeks, failing which he would be liable to penal consequences and contempt proceedings.Final Conclusion: The Court compounded the offence under Section 147 of the Negotiable Instruments Act, quashed and set aside the convictions and sentences recorded by the trial and appellate courts, acquitted the accused, vacated interim orders and discharged bail bonds, and directed the accused to pay litigation costs to the complainant within four weeks. Issues:Challenge to judgment affirming conviction under Section 138 of the Negotiable Instruments Act, compounding of offence under Section 147 of the Act, settlement between parties.Analysis:The judgment under review pertains to a criminal revision petition challenging a judgment affirming the conviction of the petitioner-accused under Section 138 of the Negotiable Instruments Act. The petitioner was found guilty by the trial court for dishonoring cheques issued to the complainant. The trial court's decision was upheld by the appellate court, leading to the petitioner seeking acquittal through the instant proceedings.The petitioner, through his counsel, argued for compounding the offence under Section 147 of the Act, citing that the entire compensation amount had been paid to the complainant. The respondent-complainant, represented by senior counsel, confirmed receiving the compensation and expressed no objection to compounding the offence. The court considered the settlement between the parties and the fact that the complainant had received the full compensation amount.Relying on the powers granted under Section 147 of the Act and following guidelines from a Supreme Court case, the court accepted the prayer for compounding the offence. Consequently, the judgments of conviction and sentence by the lower courts were quashed, and the petitioner-accused was acquitted of the charge under Section 138 of the Act. Any interim orders were vacated, and bail bonds, if any, were discharged.In light of the unnecessary legal proceedings initiated by the complainant for the recovery of his own money, the court directed the accused to pay a sum as litigation cost to the respondent within a specified timeframe. Failure to comply would result in penal consequences and potential contempt proceedings. The court disposed of the petition along with any pending applications, bringing the matter to a close.