TaxTMI 
TaxTMI 
2022 (5) TMI 465
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....e ground that the respondent/complainant and petitioners/accused were having business deals and it was alleged in the complaint by respondent that in order to discharge his pre-existing legal liability, petitioner No.2 issued cheques bearing 525363 dated 16.10.2011 for a sum of Rs.77345/-, cheques bearing No.545364 dated 18.10.2011 for a sum of Rs.56251/- and cheque bearing No.541443 dated 10.10.2011 for a sum of Rs.91,400/- all drawn of Bank of Maharashtra, Ludhiana, totalling amount of Rs.2,24,996/-. It was the allegation in the complaint that the cheques were dishonoured with the remark 'payment stopped by drawer'. 3. Pursuant thereto, the accused -petitioners were summoned and finally convicted by the Court of the Judicial Magistrate Ist Class, Ludhiana vide judgment dated 12.01.2016 (Annexure P-1). 4. The petitioners thereafter filed an appeal against the above judgment in the Court of Sessions Judge, Ludhiana. During the pendency of the appeal, the petitioner filed an application for permission to compound the offence in view of the judgement rendered in "Damodar S. Prabhu versus Syad Babalal H. 2010(2) Vol.V SCC 663", as the petitioners were ready to deposit the cheque....
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....ent of the complainant is essential to effect a settlement and the judgment in Damodar S. Prabhu's case (supra) does not adjudicate upon the issue of requirement of consent for compounding an offence under the Act. 9. I have heard the learned counsel for both the parties at length. 10. Before proceeding further in the matter, it would be relevant to examine the judgments of the Hon'ble Supreme Court and this Court on the issue. In Damodar S. Prabhu's case (supra), it was held as under :- "8. At this point, it would be apt to clarify that in view of the non obstante clause, the compounding of offences under the Negotiable Instruments Act, 1881 is controlled by Section 147 and the scheme contemplated by Section 320 of the Code of Criminal Procedure (hereinafter "CrPC") will not be applicable in the strict sense since the latter is meant for the specified offences under the Penal Code, 1860. So far as CrPC is concerned, Section 320 deals with offences which are compoundable, either by the parties without the leave of the court or by the parties but only with the leave of the court. Subsection (1) of Section 320 enumerates the offences which are compoundable without the ....
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....dition for compounding with the Legal Services Authority, or such authority as the court deems fit. (c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. (d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount. 17. We are also conscious of the view that the judicial endorsement of the above quoted Guidelines could be seen as an act of judicial law-making and therefore an intrusion into the legislative domain. It must be kept in mind that Section 147 of the Act does not carry any guidance on how to proceed with the compounding of offences under the Act. We have already explained that the scheme contemplated under Section 320 CrPC cannot be followed in the strict sense. In view of the legislative vacuum, we see no hurdle to the endorsement of some suggestions which have been designed to discourage litigants from unduly delaying the composition of the offence in cases involving Section 138 of the Act.....
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....also when the Criminal Procedure Code, 1861 was enacted it was silent about the compounding of offence. Subsequently, when the next Code of 1872 was introduced it mentioned about compounding in Section 188 by providing the mode of compounding. However, it did not contain any provision declaring what offences were compoundable. The decision as to what offences were compoundable was governed by reference to the exception to Section 214 of the Indian Penal Code. The subsequent Code of 1898 provided Section 345 indicating the offences which were compoundable but the said Section was only made applicable to compounding of offences defined and permissible under Indian Penal code. The present Code, which repealed the 1898 Code, contains Section 320 containing comprehensive provisions for compounding. 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 Negotiable Instr....
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....ied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused. iv) Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 Cr.P.C. With this approach, prison sentence of more than one year may not be required in all cases. v) Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner o....
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....ties can; appropriately; be permitted to compound the offence under Section 138 of Negotiable Instruments Act. Although the Hon'ble Supreme Court held that even under Section 147 of NI Act, the offence under Section 138 of Negotiable Instruments Act can be compounded at any stage, however, the Hon'ble Supreme Court laid down a graded scale of costs, to be paid by the party applying for compounding; with reference to the stage of proceedings; at which the compounding has been sought by the party. Beyond that, this judgment has no significance; so far as the question of consent of the complainant for compounding is concerned. 11. The above said judgment of the Supreme Court rendered in Damodar S. Prabhu's case (supra), has specifically been considered by the subsequent Bench of Hon'ble Supreme Court in case of JIK Industries Limited's (supra). While explaining the scope of consideration in Damodar S. Prabhu's case (supra), the Hon'ble Supreme Court in the case of JIK Industries Limited's (supra), has held that; this judgment cannot be interpreted to mean that applicability of Section 320 Cr.P.C stands altogether obliterated due to use of non-o....
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....gth; then the appropriate course for the subsequent Bench is only to refer the matter to the larger Bench. It has further been clarified that in case this recourse is not adopted by the subsequent Bench, then it is the judgment first in point of time; which shall be a binding precedent on that point of law and not the subsequent judgment. 13. In view of this pronunciation of the law by the Constitutional Bench judgment of the Supreme Court in Pranay Sethi's case (supra), this Court finds that; it has to follow the judgment rendered by the Hon'ble Supreme Court in case of JIK Industries Limited's case (supra), which mandated the content of the complainant for compounding of the offence under Section 138 of NI Act. 14. In the present case, admittedly, there is no consent for compounding on the part of the complainant, therefore, it was impermissible for the trial Court to permit compounding merely on unilateral application moved by the petitioner/ accused. Hence the trial Court has not committed any illegality by declining the application for compounding. So far as other relief prayed for in this petition, qua quashing of complaint and summoning orders, ....
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....nd proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 I.P.C. and with further powers of recovery under Section 431 Cr.P.C. With this approach, prison sentence of more than one year may not be required in all cases. v) Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonour of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded a....
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....of the Negotiable Instruments Act, primarily civil wrong, therefore, the Court can order compounding unilaterally as the object of the provision is primarily compensatory and punitive element is mainly with the object of enforcing the compensatory element. In "Vikas Jishtu versus Puran Chand Sharma and another, 2019 ACD 711", the law laid down in "M/s Meters and instruments private Limited and another's case (supra) was followed but the judgment in JIK Industries Limited and others (supra) was not considered. 11. The contention of the learned counsel for the petitioners-accused that the judgment in Damodar S. Prabhu (supra) was also to this effect that a compromise can be effected without the consent of all the parties, and that Section 320 Cr.P.C. has no application, is fallacious. This judgment proceeds primarily on the assumption that there was a consent between the parties. The dispute, in this case, was only the stage at which the parties can appropriately be allowed to compound the offence. In JIK Industries' case (supra), 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....