2023 (7) TMI 1106

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....of two years along with fine of Rs.2,000/- for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act') and further directed to pay a sum of Rs.18,00,000/- to the complainant-respondent as compensation. 2. The facts relevant to the present case are that the accused-petitioner issued three cheques of different dates, for a sum of Rs.5.5 lac each, in favour of the complainant-respondent to discharge his liability. However, when the said cheques were presented, the same were dishonoured and returned vide memo dated 01.08.2012 with remarks "funds insufficient/ refer to drawer". On the basis of that, a complaint under Section 138 of the Act was filed against the accusedpetitioner. Notice of accusati....

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....tates that as per the settlement, the complainant has received the agreed amount. Therefore, he has no objection, if the prayer made by the petitioner is accepted. 8. Heard the learned counsel for the parties. 9. It would be apposite to make a reference to the affidavit sworn by the complainant-respondent, the relevant of which reads thus: "1. That I am resident of above-mentioned address. 2. That I state on oath that I have filed two complaints u/s 138 of NI Act against the petitioner vide case bearing no.NIA-83-2014 and NIA-84-2014 in the court of Ld. SDJM Pataudi and with the intervention of respectables of society matter has amicable been settled in both the cases between both of us for total amount of Rs.5,50,000/- in both the a....

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....75, wherein it was held thus: "10. In the case of M/S Meters and Instruments Private Limited & Anr. Vs Kanchan Mehta1,this court held that the nature of offence under section 138 of the N.I Act is primarily related to a civil wrong and has been specifically made a compoundable offence. The relevant paragraph of the judgment has been extracted herein: "This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions' cheques were issued merely as a device to defraud the creditors. Dishonor of cheque causes incalculable loss, injury and inconvenience to the Vide the Banking, Public Financial Institutions and Negotiable Instruments Laws (A....

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....offence and acquit him by setting aside the conviction recorded in Criminal case No. 726/2003 under Section 138 of the Negotiable Instruments Act by Learned Judicial Magistrate, Karur is allowed. The petitioner is permitted to compound the offence. The Order of conviction and sentence recorded by all the Courts are hereby set aside and petitioner is acquitted of the charge leveled against him." 12. The compounding of the offence at later stages of litigation in cases under Section 138 of the Act has also been held to be permissible by Hon'ble The Supreme Court in the case of K.M. Ibrahim vs. K.P. Mohammed, (2010) 1 SCC 798, wherein it was held thus: "11. As far as the non-obstante clause included in Section 147 of the 1881 Act is concer....