TaxTMI 
TaxTMI 
2021 (5) TMI 403
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.... the learned Judicial Magistrate (Fast Track Court), Omalur, (trial Court) for the offence under Section 138 of The Negotiable Instruments Act and sentenced to undergo one year simple imprisonment, together with compensation of Rs. 5,00,000/- payable to the complainant. (b) Assailing the said judgment of conviction, dated 11.04.2014, passed by the trial Court, the respondent (accused) filed Criminal Appeal No.56 of 2014 before the learned II Additional Sessions Judge, Salem. The Appellate Court allowed the appeal on 24.09.2014 by setting aside the judgment of conviction dated 11.04.2014 passed by the trial Court in C.C. No. 104 of 2013, thereby acquitting the respondent/accused. 3. Aggrieved by the judgment rendered by the Appellate Court, acquitting the accused, the complainant filed Criminal Appeal No.373 of 2015 before this High Court. The said Criminal Appeal was allowed by this Court on 09.04.2019. However, the sentence was modified from one year simple imprisonment to two months' simple imprisonment. This Court also confirmed the compensation amount of Rs. 5,00,000/- imposed on the respondent/accused by the trial Court. Thus, the Judgment dated 24.09.2014 in Crl.A.N....
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.... of Section 147 will prevail over Cr.P.C. in so far as "compounding the offence". Requesting the office to post the matter for maintainability before Court." 7. This Crl.M.P.S.R. was posted before the learned Single Judge "for maintainability". The learned Single Judge, after referring to various judgments relating to exercise of powers under Section 147 of the NI Act, as well as Section 482 Cr.P.C., by order dated 24.02.2020, held as follows:- "23. I may take the liberty to add further, change in circumstances referred in Mostt. Simrikhia case (Mostt. Simirikhia Vs. Smt.Dolley Mukherjee @ Smt.Chhabimukherjee @ another, (reported in AIR 1990 SC 1605 (cited supra)), is not the change of attitude of the contesting party who come forward to compromise or settle the issue, after he has lost all the avenues provided under law. Right to Compound a case under Section 138 of Negotiable Instrument Act is available for the accused at all stages, but it does not mean that the said opportunity continue even after the case reaches its logical end. Change in circumstances should not be confused or substituted to the change of attitude of the parties. If any alteration in the judgment....
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....liance on the decision of the Supreme Court in the case of Shakuntala Sawhney Vs. Kaushalya Sawhney, reported in 1980 (1) SCC 63, wherein it has been held as follows: "4. .. .. The finest hour of justice arrives propitiously when parties, despite falling apart, bury the hatchet and weave a sense of fellowship or reunion. In the present case, Counsel today put in a joint statement (on April 2, 1979 an inchoate compromise purporting to be a full-fledged compromise had been put into Court by Counsel signed by both sides, but the joint statement of settlement put in today is in complete supersession of the earlier one), signed by the parties setting down the terms on which they have agreed. We consider it a success of the finer human spirit over its baser tendency for conflict." (ii) According to the learned Senior Counsel appearing for the petitioner/complainant, Chapter XVII of the Negotiable Instruments Act was inserted by the Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988) by S.4 therein (with effect from 01.04.1989), dealing with "of penalties in case of dishonour of certain cheques for insufficiency of ....
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....rt to Section 320 Cr.P.C., which provides for compounding of the offence(s) with two tables, each under sub-section (1) and (2). The compounding of cases may be entertained for two reasons: "(i) compounding reduces the wastage of judicial time and makes it available for better use in disposing of the other cases, and (ii) compounding is encouraged to promote better relations and cordiality between parties and peace in the society and the locality. (v) In fact, the Supreme Court has allowed compounding of the offence(s) even in non-compounding cases, despite the offence(s) not being covered under the ambit of Section 320 Cr.P.C. In this regard, the learned Senior Counsel appearing for the petitioner/complainant relied on the below mentioned decisions:- (a) In the case of Kulwinder Singh and others vs. State of Punjab reported in 2007 (3) RCR (Criminal) 1052 = 2007 SCC Online P & H 792, the Full Bench comprising five Judges of the Punjab and Haryana High Court, held that the High Court has power under Section 482 of Cr.P.C. to allow the compounding of non-compoundable offence(s) and quash the prosecution where the High Court felt that the same was required to pre....
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....ough Section 320 Cr.P.C. In this regard, the learned Senior Counsel appearing for the petitioner/complainant also relied on a judgment of the Apex Court in the case of Arun Singh Vs. State of Uttar Pradesh, reported in 2020 (3) SCC 736, and useful reference can be made to the following observations made by the Supreme Court thereunder: "11. Though the offence in question are noncompoundable but the power of the High Court under Section 482 Cr.PC to quash the proceedings in such offences is well recognised by various decision of this court and the issue is no longer res integra. Reference may be made to the observations of three-Judge Bench of this Court in Gian Singh Vs. State of Punjab : 2012 (10) SCC 303. '57. Quashing of offences or criminal proceedings on the ground of settlement between an offender and victim is not the same thing as compounding of the offence. They are different and not interchangeable. Strictly speaking the power of compounding of offence given to a Court under Section 320 is materially different from the quashing of criminal proceedings by the High Court in exercise of the inherent jurisdiction. In compounding of offence, power of a cr....
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.... of offences under Chapter XVII of the Negotiable Instruments Act and Section 143 to 147 were inserted by the Act by the Negotiable Instruments (Amendment and Miscellaneous Provisions) 2002 to do away with all the stages and processes in a regular criminal trial that normally cause inordinate delay in its conclusion and to make the trial procedure as expeditious as possible without in any way compromising on the right of the accused for a fair trial. .. . .." (viii) Further, reliance was also placed on the decision of the Supreme Court in the case of Vinayak Devanna Nayak Vs. Ryot Seva Sahakari Bank Limited, reported in 2008 (2) SCC 305, wherein it was held as follows:- "16. Section 138 of the Act was inserted by the Banking, Public Financial Institutions and Negotiable Instrument Law (Amendment) Act, 1988 (ACT 66 of 1988) to regulate financial promises in growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters. The incorporation of the provision is designed to safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developi....
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....ce is primarily concerned with private parties and therefore, such an offence cannot be treated on par with the other criminal offence(s). In such offences, the parties are always permitted to enter into a compromise so as to bring an end to the long dispute. To fortify this submission, the learned Senior Counsel appearing for the petitioner/complainant relied on a judgment of the Apex Court in the case of Damodar S.Prabhu Vs. Sayed Babalal.H, reported in 2010 (5) SCC 663 = AIR 2010 SC 1107, wherein the Supreme Court framed guidelines with respect to granting permission for compounding of the offence(s) at various stages and the relevant portion of the said judgment reads as follows: (SCC para 21): "21. With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence. It was submitted that the requirement of deposit of the costs will act as a deterrent for delayed composition, since at present, free and easy compounding of offences at any stage, however belated, gives an incentive to the drawer of the chequ....
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....", constituting an encroachment of private rights of the parties involved, and therefore, such an offence cannot be treated on par with the criminal offence(s). In such offence(s), the parties are permitted to enter into compromise to bring an end to the dispute. Hence, the compounding of offence under Section 138 of the N.I. Act, through Section 147 of the N.I. Act, can be given effect to, even at a later stage of the proceedings, subject to the parties agreeing to an appropriate compensation. (xiii) The learned Senior Counsel, by inviting the attention of this Court to the judgment passed in Crl.R.C.No.1096 of 2013, dated 31.01.2020 (Sathish Kumar Vs. Vidhyasagar), reported in CDJ 2020 MHC 2764, submitted that a learned Single Judge of this Court dismissed the Criminal Revision Case (Crl.R.C) filed by the accused in that case and thereby, confirmed the conviction imposed by the trial Court, which was also confirmed by the appellate Court in the appeal at the first instance, but permitted the parties to compound the offence under Section 138 of the N.I. Act, by approaching the trial court/Magistrate under Section 147 of the N.I. Act, despite having already exercised the revi....
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....Power of attorney holder of R.Rajathi on December 1, 2008 as additional documents is allowed. Crl.M.P. No. 12803 of 2009 in which the petitioner has prayed to permit him to compound the offence and acquit him by setting aside the conviction recorded in Criminal Case No. 726 of 2003 under Section 138 of The Negotiable Instruments Act, by learned Judicial Magistrate, Karur is allowed. The petitioner is permitted to compound the offence." (xvi) Apart from the above decisions, the learned Senior Counsel appearing for the petitioner/complainant produced a catena of orders passed by the various High Courts to fortify his submission that the offence under Section 138 of the N.I. Act can be compounded at any stage. (xvii) With regard to the issue raised in this petition as to whether Section 362 of Cr.P.C. is a bar to invoke Section 482 Cr.P.C., the learned Senior Counsel appearing for the petitioner/complainant, by relying upon a judgment of the Supreme Court in the case of New India Assurance Company Limited Vs. Krishna Kumar Pandey, reported in 2019 SCC Online SC 1786, in Crl.A.No.1852 of 2019 (arising out of S.L.P.(Crl).No.8499 of 2014), dated 06.12.2019, submitted that in paragr....
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....a conviction is finalised through Section 482 Cr.P.C. (xx) Apart from the above submissions, it is submitted by the learned Senior Counsel appearing for the petitioner/complainant that the Government of India, Ministry of Finance, Department of Financial Services issued a proposal on 08.06.2020 inviting public views with regard to decriminalisation of certain offences, which includes Section 138 of the N.I. Act. Further, the Annexure of the said proposal at page No.15 under Entry No.18 specifies Section 138 of the Act to be considered for decriminalisation. Thus, the intention of the Legislature itself is to consider the offence under Section 138 of the N.I. Act as a less severe offence, ideally resolved by the parties by entering into compromise. (xxi) The learned Senior Counsel appearing for the petitioner/complainant also submitted that the intention of the parties to compound the offence under Section 147 of the N.I. Act constitutes a substantial change in circumstances. In this regard, the learned Senior Counsel appearing for the petitioner/complainant invited the attention of this Court to the definition of "circumstances" referred to in Black's Law Dictionary, whic....
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.... however required to be reserved, as far as possible, for extraordinary cases." (xxiv) In this regard, the learned Senior Counsel appearing for the petitioner/complainant also relied on a decision of the Apex Court reported in AIR 2009 SC 1863 = 2009 (13) SCC 443 (State of Andhra Pradesh Vs. Aravapally Venkanna and others), wherein, it has been held as follows: "4. (As observed in State of A.P. Vs. Goloconda Linga Swamy (2004 (6) SCC 522, pp.526-29 : 2004 SCC (Cri) 1805, paras 5-8): "5. Exercise of power under Section 482 of the Code in a case of this nature is the exception and not the rule. The Section does not confer any new powers on the High Court. It only saves the inherent power which the Court possessed before the enactment of the Code. It envisages three circumstances under which the inherent jurisdiction may be exercised, namely (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of Court, and (iii) to otherwise secure the ends of justice. .. .. .. Authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the Court has power to preven....
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....r.P.C. is always subject to the limitations prescribed under Section 362 Cr.P.C.. No Courts have the power to alter the judgment, after it was pronounced. The application for compounding an offence would amount to setting aside the judgment passed "on merits". While so, it is not permissible to entertain a petition for compounding the offence in exercise of the powers conferred under Section 482 Cr.P.C. after pronouncement of the judgment "on merits". (ii) With regard to the submission made by the learned Senior counsel for the petitioner that the "Negotiable Instruments Act" is a special enactment and it will over-ride the provisions conferred under the Cr.P.C., the learned Advocate General invited the attention of this Court to Section 4 Cr.P.C. and submitted that it deals with the offences under the Indian Penal Code (IPC) and other laws. Section 5 Cr.P.C. deals with "saving clause", which specifically states that, "Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law....
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....arned Advocate General also contended that an appeal being a creature of statute and the appellate Court would only be considering the correctness of the judgment of the lower court and the appellate Court cannot issue further directions beyond the scope of the appeal. Though the cases may be compounded at any time before a sentence of imprisonment is pronounced, even when a judgment is being written, the Court may hold that, after pronouncement of the judgment, there can be no compounding. However, compounding of cases/offence(s) concerning Negotiable Instruments Act, are governed by Section 147 of the Negotiable Instruments Act and the scheme contemplated under Section 320 Cr.P.C. will not be applicable in the strict sense, but the principles have to be applied for compounding. Thus, it is the submission of the learned Advocate General that in exercise of power under Section 482 Cr.P.C., the petition for compounding of the offence(s) need not be entertained after the verdict has been delivered in the criminal case. 12. Having heard the learned Senior Counsel appearing for the petitioner/complainant and the learned Advocate General, who assisted this Court in settling this r....
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....ces under the IPC, is applicable to the offences triable under the N.I. Act and other special Legislations. Though several provisions of the N.I. Act start with a non-obstante clause, nevertheless, substantive law on the subject under Section 320 of the Cr.P.C. is applicable. Section 320 (5), (6). (7) and (9) reads as under: "Section 320 Cr.P.C : Compounding of offences:-- .. .. . (5) When the accused has been committed for trial or when he has been convicted and an appeal is pending, no composition for the offence shall be allowed without the leave of the Court to which he is committed, or, as the case may be, before which the appeal is to be heard. (6) A High Court or Court of Sessions acting in the exercise of its powers of revision under section 401 may allow any person to compound any offence which such person is competent to compound under this section. (7) No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence. .. .. .. (9) No offence shall be compounded except as provided by this section." ....
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.... a cheque an offence, start with nonobstante clause, the substantive law for compounding an offence under the general law, cannot be different. Even though Section 147 of the Negotiable Instruments Act starts with a "Non-Obstante Clause" and it provides for compounding of all the offence(s) covered under the Negotiable Instruments Act, the compounding of offence(s) thereunder should be consistent with the principles laid down under Section 320 Cr.P.C. Section 320 (5), (6), (7) and (9) of Cr.P.C. specifically bars the compounding of offence in certain circumstances. The provisions under Section 320 Cr.P.C. are pre-requisites for filing an application for compounding in a proceeding pending before the High Court. 20. It may be useful to refer to paragraph 12 in the decision of the Supreme Court in Damodar S. Prabhu Vs. Sayed Babalal H, reported in 2010 (5) SCC 663, wherein, the Court held as follows:- 12. Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 ....
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....mmitted a crime. You commit this offence if you promise a thief not to prosecute him if only he will return the goods he stole from you; but you may lawfully take them back if you make no such promise. You may show mercy, but must not sell mercy. This offence of compounding is committed by the bare act of agreement; even though the compounder afterwards breaks his agreement and prosecutes the criminal. And inasmuch as the law permits not merely the person injured by a crime, but also all other members of the community, to prosecute, it is criminal for anyone to make such a composition; even though he suffered no injury and indeed has no concern with the crime." 82. A perusal of Section 320 makes it clear that the provisions contained in Section 320 and the various sub-sections is a code by itself relating to compounding of offence. It provides for the various parameters and procedures and guidelines in the matter of compounding. If this Court upholds the contention of the appellant that as a result of incorporation of Section 147 in the NI Act, the entire gamut of procedure of Section 320 of the Code are made inapplicable to compounding of an offence under the NI Act, in t....
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....offence after the pronouncement of the judgment, the application under Section 147 of the Negotiable Instruments Act cannot be maintained. Therefore, the present petition filed under Section 482 Cr.P.C. is not maintainable before this Court for reviewing or recalling a judgment, which was already passed by this Court by confirming the conviction and sentence imposed on the respondent/accused, by the trial Court. Such power under Section 482 Cr.P.C. are boundless. At the same time, exercise of power under Section 482 Cr.P.C. is subject to restrictions imposed under Section 362 Cr.P.C. 24. Applying the above principles to the case on hand, the respondent in this case pleaded not guilty before the trial court, appellate Court at the first instance, as well as this Court in the appeal against acquittal, but such a plea was over-turned and he was convicted for having committed the offence under Section 138 of the Negotiable Instruments Act. While so, the present petition seeking to accept the compromise entered into between the parties, is nothing short of an abuse of process of law. 25. Compounding is permissible to bring peace among the parties. It can be permitted at any sta....