2024 (12) TMI 1089 - HC - Indian Laws

Courts can accept consent terms and compound Section 138 offences even after conviction under revisional powers

M/s. AFX+Q Engineers and Anr., Dhananjay Digambar Bhagwat, Rajaram Ganpat Narvekar, Kailas Bapurao Gadge, Sheela Jagdish Katira, Ramesh Jagdishchandra Obhan, Sheela Jagdish Katira, Kashinath Pandurang Laykar and Anr., Manik Krushna Jadhav and Anr., Vinayak Achut Ghaisas, Sushila Ramji Singh and Anr., M/s. Shetkari Solvant (India) Ltd., Versus M/s. Nikita Udyog and Anr., Dilip Hanumant Keshkamant and Anr., Shree Santsena Maharaj Nagari Sahakari Pathasantha Maryadit Sinnar, Sudhir Dewon Sakpal (since deceased through legal heirs) Suhasini Sudhir Sakpal and Anr., State of Maharashtra and Anr., Ramesh Obhan and Anr., The State of Maharashtra and Anr., Ashok Tukaram Patil and Anr., Vinodkumar D. Palrecha and Anr., Maharashtra State Financial Corporation and Anr.

The Bombay HC held that courts can accept consent terms and compound offences under Section 138 of the Negotiable Instruments Act even after conviction. ... Challenge to judgment of conviction for offence under Section 138 of the Negotiable Instruments Act, 1881 - compounding of offences - whether this Court can accept Consent Terms filed by parties to put an end to the lis between the parties and grant relief of compounding of the offence as a sequitur thereto and on what terms? HELD THAT:- In the backdrop of the provisions of Cr.P.C. and more specifically when present cases emanate from a conviction under Section 138 of the N.I. Act, the next most relevant statutory provision which comes to the aid of parties and permits them to make Application for seeking compounding of the offence is Section 147 of N.I. Act. Section 147 provides for offences to be compoundable. It was introduced by the Amendment Act 55 of 2002 in the statute. It starts with a non-obstante clause and states that notwithstanding anything contained in the Cr.P.C., every offence punishable under the N.I. Act shall be compoundable. There is one more statutory provision which is required to be quoted which is utilised by parties to compromise and get Consent Terms accepted by Court and seek compounding of the offence. It is seen that the High Court Legal Services Committee receives Applications in various categories such as Civil Appeals, Family Court Appeals, Criminal Revisions, First Appeal (MACT) and Execution Petitions of Arbitral Award - it emerges that when the Lok Adalat makes an Award on the basis of a settlement or compromise arrived at between the parties, it proceeds to dispose of the case on the basis of the said Compromise / Consent Terms / Settlement which necessarily entails taking on record the Consent Terms and setting aside of the conviction and sentence, resultantly compounding of the offence. The provisions of Sections 397, 401 and 320 of Cr.P.C. read alongwith Section 147 of N.I. Act would without doubt enable this Court to utilise its discretion in the given facts and circumstances of the present cases to accept the Consent Terms / Compromise even at this stage much belatedly after conviction. There can be no bar or impediment on this Court exercising its Revisional power alongwith its discretionary power under Section 401 of Cr.P.C. readwith the inherent powers of the High Court under Section 482 of Cr.P.C. to take on record the compromise arrived at between parties in matters which are compoundable having regard to the provisions of Section 147 of N.I. Act. There are no doubt in coming to the conclusion that in view of the extant power under Section 397 of Cr.P.C., if parties approach the Court with Compromise / Settlement / Consent Terms, the same can be accepted, Applicant – Accused can be allowed to compound the offence and the conviction can be set aside. Application disposed off. Issues Involved:1. Whether the High Court can accept Consent Terms filed by parties in Revision Applications under Section 397 of the Code of Criminal Procedure, 1973, and allow compounding of the offence under Section 138 of the Negotiable Instruments Act, 1881.2. The applicability of Section 147 of the Negotiable Instruments Act regarding compounding offences and its interplay with the provisions of the Code of Criminal Procedure.3. The imposition of costs in cases where compounding is sought at a belated stage.Detailed Analysis:Issue 1: Acceptance of Consent Terms and Compounding of OffenceThe judgment addresses whether the High Court can accept Consent Terms filed by parties in Revision Applications under Section 397 of the Code of Criminal Procedure (Cr.P.C.) and allow compounding of the offence under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act). The Court concluded that it possesses the jurisdiction to accept such Consent Terms and allow compounding of offences even at the revisional stage. This is supported by the provisions of Sections 397 and 401 of Cr.P.C., which confer supervisory jurisdiction on higher courts to correct manifest illegality and prevent miscarriage of justice. The Court noted that Section 147 of the N.I. Act, which allows for compounding of offences, does not specify any procedural restrictions, thus enabling the Court to accept settlements at any stage.Issue 2: Interplay of Section 147 of N.I. Act and Cr.P.C.Section 147 of the N.I. Act, which provides that offences under the Act are compoundable, is pivotal in this context. The Court highlighted that this section begins with a non-obstante clause, indicating its primacy over the Cr.P.C. in matters of compounding. The judgment refers to the Supreme Court's guidance in cases like Damodar S. Prabhu, which suggests that the N.I. Act's provisions should be given precedence, allowing for compounding even at the appellate or revisional stages. The Court emphasized that compounding should be prioritized over punitive measures, especially in cases involving private disputes.Issue 3: Imposition of Costs for Belated CompoundingThe judgment also dealt with the imposition of costs in cases where compounding is sought at a belated stage. The Supreme Court in Damodar S. Prabhu provided guidelines suggesting that costs should be imposed to discourage delayed compounding. The Court in this judgment agreed with this approach, noting that while costs can be imposed to deter protracted litigation, the specific facts and circumstances of each case should be considered. The Court has discretion to reduce costs if justified, ensuring that settlements are not rendered unfruitful due to financial burdens.Conclusion:The judgment affirms the High Court's authority to accept Consent Terms and allow compounding of offences under Section 138 of the N.I. Act, even during revisional proceedings, provided the parties have settled their disputes. It underscores the significance of Section 147 of the N.I. Act in facilitating such settlements and highlights the need for a balanced approach regarding the imposition of costs, taking into account the stage at which compounding is sought and the specific circumstances of each case.