2025 (1) TMI 729 - HC - Indian Laws

High Court annuls Section 138 conviction after parties reach compromise using inherent powers despite appellate dismissal

The Madras HC exercised its inherent powers to annul conviction and sentence under Section 138 of the Negotiable Instruments Act following a compromise ... Dishonour of Cheque - challenge to conviction and sentence - compromise reached between the parties - invocation of inherent powers of the High Court to compound the offence under Section 138 of the Negotiable Instruments Act at the revisional stage - HELD THAT:- It is well settled that inherent power of the Court can be exercised only when no other remedy is available to the litigants and nor a specific remedy as provided by the statute. It is also well settled that if an effective, alternative remedy is available, the High Court will not exercise its inherent power, especially when the Revision Petitioner may not have availed of that remedy - This Court can always take note of any miscarriage of justice and prevent the same by exercising its power. These powers are neither limited, nor curtailed by any other provision of the Code or Act. However, such inherent powers are to be exercised sparingly and with caution. In the instant case, it is true that the appeal was dismissed and the conviction and sentence was upheld by the appellate court, but it cannot be lost sight of the fact that this Court has power to intervene in exercise of its power only with a view to do the substantial justice or to avoid a miscarriage and the spirit of compromise arrived at between the parties. This is perfectly justified and legal too. In the instant case, the Revision Petitioner is invoking the inherent power of this court after dismissal of the appeal confirming his conviction and sentence - In the case of Krishan Vs. Krishnaveni [1997 (1) TMI 529 - SUPREME COURT], Hon'ble the Apex Court has held that though the inherent power of the High Court is very wide, yet the same must be exercised sparingly and cautiously particularly in a case where the applicant is shown to have already invoked the revisional jurisdiction under section 397 of the Code. Only in cases where the High Court finds that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order was not correct, the High Court may in its discretion prevent the abuse of process or miscarriage of justice by exercising its power. Section 147 of NI Act begins with a non obstante clause and such clause is being used in a provision to communicate that the provision shall prevail despite anything to the contrary in any other or different legal provisions. So, in light of the compass provided, a dispute in the nature of complaint under section 138 of N.I. Act, can be settled by way of compromise irrespective of any other legislation including Cr.P.C. In general and section 320 (1)(2) or (6) of the Cr.P.C. in particular - Merely because the litigation has reached to a revisional stage or that even beyond that stage, the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage, the nature of offence punishable under Section 138 of the N.I. Act should be treated as if the same is falling under table-II of Section 320 IPC. The court is inclined to hold accordingly only because there is no formal embargo in section 147 of the N.I. Act. This principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under section 138 of the N.I. Act is distinctly different from the normal offences made punishable under Chapter XVII of IPC (i.e. the offences qua property). Conclusion - The conviction and sentence under Section 138 of the Negotiable Instruments Act could be annulled based on the compromise reached between the parties. The inherent powers of the court were appropriately invoked to secure the ends of justice. The conviction and sentence under section 138 of the Negotiable Instruments Act in C.C.No.366 of 2013 stands annulled as this Court intends, otherwise to secure the ends of justice - the present Criminal Revision Case is disposed of. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment were:Whether the conviction and sentence imposed under Section 138 of the Negotiable Instruments Act can be nullified by the High Court based on a compromise reached between the parties.Whether the inherent powers of the High Court can be invoked to compound the offence under Section 138 of the Negotiable Instruments Act at the revisional stage, despite the conviction being upheld by the appellate court.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Nullification of Conviction and Sentence Based on CompromiseRelevant Legal Framework and Precedents: The primary legal provisions involved are Section 138 and Section 147 of the Negotiable Instruments Act, and Section 320 of the Code of Criminal Procedure (Cr.P.C.). Section 147 allows for the compounding of offences under the Negotiable Instruments Act. Precedents include the cases of Damodar S. Prabhu vs. Sayed Babalal H and M/s. Meters and Instruments Private Limited vs. Kanchan Mehta, which provide guidelines for compounding offences under Section 138.Court's Interpretation and Reasoning: The court recognized the legislative intent behind Section 147 of the Negotiable Instruments Act, which allows compounding of offences at any stage, including after conviction. The court emphasized that the primary objective of the Act is compensatory rather than punitive.Key Evidence and Findings: The court considered the Joint Compromise Memo submitted by the parties, indicating that the petitioner had paid the agreed settlement amount to the respondent, and both parties agreed to the terms without coercion.Application of Law to Facts: The court applied the provisions of Section 147 of the Negotiable Instruments Act, allowing compounding of the offence despite the stage of proceedings, and annulled the conviction and sentence based on the compromise reached.Treatment of Competing Arguments: The court addressed the opposition from the Government Advocate, who argued against compounding after conviction, by emphasizing the special nature of offences under the Negotiable Instruments Act and the overriding effect of Section 147.Conclusions: The court concluded that the compromise between the parties is valid and can nullify the conviction and sentence under Section 138 of the Negotiable Instruments Act.Issue 2: Invocation of Inherent Powers for Compounding at Revisional StageRelevant Legal Framework and Precedents: The court referred to Section 482 of the Cr.P.C., which provides inherent powers to the High Court to secure the ends of justice. Precedents included Krishan vs. Krishnaveni and S.W. Palankattkar vs. State of Bihar, which discuss the scope of inherent powers.Court's Interpretation and Reasoning: The court reasoned that the inherent powers can be invoked to prevent miscarriage of justice and to uphold the spirit of compromise, especially when the offence is compoundable under the special provisions of the Negotiable Instruments Act.Key Evidence and Findings: The court considered the amicable settlement reached between the parties and the absence of any further claims or proceedings related to the issue.Application of Law to Facts: The court applied its inherent powers to annul the conviction and sentence, emphasizing the need to prioritize compensatory justice over punitive measures in cheque dishonour cases.Treatment of Competing Arguments: The court acknowledged the Government Advocate's concerns about misuse of process but highlighted the legislative intent and judicial precedents supporting compounding at any stage.Conclusions: The court concluded that the inherent powers can be used to compound the offence at the revisional stage, thereby annulling the conviction and sentence.3. SIGNIFICANT HOLDINGSVerbatim Quotes of Crucial Legal Reasoning: 'The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court.'Core Principles Established: The judgment reinforces the principle that offences under the Negotiable Instruments Act are primarily compensatory. The court has the inherent power to annul convictions based on a valid compromise, irrespective of the stage of proceedings.Final Determinations on Each Issue: The court determined that the conviction and sentence under Section 138 of the Negotiable Instruments Act could be annulled based on the compromise reached between the parties. The inherent powers of the court were appropriately invoked to secure the ends of justice.The judgment emphasizes the importance of resolving cheque dishonour cases through amicable settlements, reflecting the compensatory nature of the Negotiable Instruments Act, and highlights the court's role in facilitating such resolutions even at advanced stages of litigation.