2022 (5) TMI 465 - HC - Indian Laws

Petition to Quash Order Refusing Compounding Dismissed: Consent & Compensation Issues

The court dismissed the petition seeking to quash the order refusing to compound the offence under Section 138 of the Negotiable Instruments Act. Despite ... Dishonor of Cheque - Seeking permission for compounding of offences - HELD THAT:- The dispute, in this case, was only the stage at which the parties can appropriately be allowed to compound the offence. In the case of JIK Industries [2012 (2) TMI 269 - SUPREME COURT], however, the precise issue was as to whether the consent of the parties was necessary to compound the offence and it was held that the basic mode and manner of effecting the compounding of an offence under Section 320 Cr.P.C. cannot be said to be not attracted in case compounding of offence under Section 147 of the Negotiable Instruments Act. In fact Section 320 Cr.P.C. enumerates the manner in which the offences are to be compounded whereas Section 147 of the Act makes the offences under the Act compoundable without explaining the manner in which the compounding is to take place. Coming back to the facts of the present case, the cheques pertain to the year, 2011 totalling a sum of Rs.2,24,996/-. As per the learned counsel for the petitioners, the petitioners were willing to make a payment of Rs.4,00,000/-. This payment of Rs.4,00,000/- after ten years of the issuance of the cheques, in the opinion of this Court, is grossly inadequate and is not sufficient to compensate the complainant so as to enable this Court to exercise its discretion to close the proceedings, particularly, in the circumstances, when the complainant is not willing to consent to compounding. Petition dismissed. Issues Involved:1. Quashing of the order dismissing the application for compounding the offence under Section 138 of the Negotiable Instruments Act.2. Requirement of the complainant's consent for compounding the offence.3. Applicability of various judicial precedents on the compounding of offences under the Negotiable Instruments Act.Issue-wise Detailed Analysis:1. Quashing of the Order Dismissing the Application for Compounding the Offence:The petitioners sought quashing of the order dated 21.03.2018 passed by the Additional Sessions Judge, Ludhiana, which dismissed their application for permission to compound the offence under Section 138 of the Negotiable Instruments Act. The petitioners argued that they were ready to deposit the cheque amount and relevant charges as per the judgment in 'Damodar S. Prabhu versus Syad Babalal H.' They contended that the lower court erred in not allowing the compounding of the offence despite their willingness to settle the matter.2. Requirement of the Complainant's Consent for Compounding the Offence:The petitioners relied on the judgment in 'M/s Meters and Instruments Private Limited And Another versus Kanchan Mehta,' which held that the consent of the complainant is not relevant if the court is satisfied that the complainant has been duly compensated. They also referred to other judgments supporting their stance. Conversely, the complainant's counsel cited 'JIK Industries Limited and others versus Amarlal V. Jumnai and another,' arguing that the consent of the complainant is essential for compounding the offence. The court examined these conflicting judgments and noted that while 'Damodar S. Prabhu' did not explicitly address the necessity of consent, 'JIK Industries' emphasized that the basic mode and manner of effecting the compounding of an offence under Section 320 CrPC cannot be disregarded.3. Applicability of Various Judicial Precedents on the Compounding of Offences:The court analyzed several precedents, including 'Damodar S. Prabhu,' 'M/s Meters and Instruments Private Limited,' and 'JIK Industries Limited.' It noted that 'Damodar S. Prabhu' provided guidelines for compounding offences to reduce pendency but did not address the necessity of consent. 'JIK Industries' clarified that the consent of the complainant is a fundamental requirement for compounding. The court also considered the judgment in 'M/s Anant Tools (Unit No.II) Pvt. Ltd. And others versus M/s Anant Tools Pvt. Ltd.,' which supported the need for consent. The court concluded that the earlier judgment in 'JIK Industries' should prevail, as it accurately stated the law regarding the necessity of the complainant's consent.Conclusion:The court found that the petitioners' offer to pay Rs.4,00,000 after ten years of the issuance of the cheques was grossly inadequate to compensate the complainant. Given the complainant's refusal to consent to the compounding, the court held that it could not exercise its discretion to close the proceedings. Consequently, the petition was dismissed, upholding the requirement of the complainant's consent for compounding the offence under Section 138 of the Negotiable Instruments Act.