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2024 (6) TMI 700
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....tion thereon]; which stands affirmed on 07.10.2023, [Annexure P-2] by the Learned Additional Sessions Judge-I, Mandi, District Mandi [H.P.], [hereinafter referred to as 'Appellate Court], in Criminal Appeal No.37 of 2021. 2. Now, during of the instant petition, petitioner - accused [Budhi Singh] has filed a Cr.MP No.1477 of 2024, stating that since the matter has been resolved, therefore, the matter may be compounded and the impugned Judgments may be quashed. This prayer is not disputed by Mr. Ajit Sharma, Learned State Counsel as well as Mr. Atul Kumar, learned counsel for Respondent No.2-Complainant, on instructions, who confirm that the matter has been settled and the impugned Judgments may be compounded/quashed. In this background, it is prayed that the offence may be compounded and the impugned Judgments may be quashed and set-aside. 3. Heard Mr. Nand Lal, Learned Counsel for the petitioner, Mr. Ajit Sharma, Learned State Counsel and Mr. Atul Kumar, Learned Counsel for Respondent No.2-Complainant. 4. In order to appreciate the controversy in the instant case, it is relevant to have a recap of the statutory provisions of Sections 138 and 147 of the Negotiable Instrumen....
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....ll be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice." 5(i). In the background of the aforesaid statutory provisions, it is relevant to take note of the mandate of the Hon'ble Supreme Court, in Meters and Instruments Private Limited and another Versus Kanchan Mehta, (2018) 1 SCC 560 as under:- "6. The object of introducing Section 138 and other provisions of Chapter XVII in the Act in the year 1988 [Vide the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988] was to enhance the acceptability of cheques in the settlement of liabilities. The drawer of cheque is made liable to prosecution on dishonour of cheque with safeguards to prevent harassment of honest drawers. The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 to amend the Act was brought in, inter alia, to simplify the procedure to deal with such matters. The amendment includes provision for service of summons by speed post/courier, summary trial and making ....
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....proof is "preponderance of probabilities". The same has to be normally tried summarily as per provisions of summary trial under Cr.PC but with such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 CrPC will apply and the court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect. 18.2. 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. 18.3. Though compounding requires consent of both parties, even in absence of such consent, the court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused. 18.4. Procedure for trial of cases under Chapter XVII of the Act has normally to be su....
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....Bank, on being required, should furnish such e-mail ID to the payee of the cheque. In every summons, issued to the accused, it may be indicated that if the accused deposits the specified amount, which should be assessed by the Court having regard to the cheque amount and interest/cost, by a specified date, the accused need not appear unless required and proceedings may be closed subject to any valid objection of the complainant . If the accused complies with such summons and informs the Court and the complainant by e-mail, the Court can ascertain the objection, if any, of the complainant and close the proceedings unless it becomes necessary to proceed with the case. In such a situation, the accused's presence can be required, unless the presence is otherwise exempted subject to such conditions as may be considered appropriate. The accused, who wants to contest the case, must be required to disclose specific defence for such contest. It is open to the Court to ask specific questions to the accused at that stage. In case the trial is to proceed, it will be open to the Court to explore the possibility of settlement. It will also be open to the Court to consider the provisions of plea ....
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....g of Section 14(1)(a), the moratorium therefore attaching to such proceeding. 5(ii). Likewise in Madan Tiwari versus Yashwant Kumar Sahu and Another, 2020 SCC Online 1310, the Hon'ble Apex Court, has quashed the judgments of conviction and sentence in a case where the parties had arrived at a settlement under the provisions of the Negotiable Instruments Act. The relevant Paras of the aforesaid judgment read as under:- "7. Now, the applicant-appellant has filed an application being Criminal Misc. Petition No. 176956 of 2019 seeking modification of the Order dated 27.09.2019 stating therein that the matter has been compromised between the parties. The appellant as per Settlement Agreement dated 05.09.2019 made payment of entire sum of Rs.3,16,000/- to respondent No. 1-complainant. It has further been stated in the said application that respondent No. 1- complainant on his own after having been received a sum of Rs. 3,16,000/- along with Rs. 50,000/-, as interest, from the appellant, filed an application under Section 147 of the Negotiable Instruments Act, 1881, for compounding of offence before the Chief Judicial Magistrate, 1st Class, Durg, Chhattisgarh. 8. It h....
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....d culminates in execution of a decree. It would include a revenue proceeding as well as a writ petition filed under Article 226 of the Constitution, if the reliefs therein are to enforce rights of a civil nature. Interestingly, criminal proceedings are stated to be proceedings in which the larger interest of the State is concerned. Given these tests, it is clear that a Section 138 proceeding can be said to be a "civil sheep" in a "criminal wolf's" clothing, as it is the interest of the victim that is sought to be protected, the larger interest of the State being subsumed in the victim alone moving a court in cheque bouncing cases, as has been seen by us in the analysis made hereinabove of Chapter XVII of the Negotiable Instruments Act. 54. In Goaplast (P) Ltd. v. Chico Ursula D'Souza, the object sought to be achieved by Section 138 is succinctly set out in paragraph 3 thereof: "3. The learned counsel for the appellant has submitted that mere writing of letter to the bank stopping payment of the post-dated cheques does not take the case out of the purview of the Act. He has invited our attention to the object behind the provision contained in Chapter XVII of the Ac....
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....lose its credibility and acceptability if its payment can be stopped routinely. A cheque is a well-recognized mode of payment and post-dated cheques are often used in various transactions in daily life. The purpose of a post-dated cheque is to provide some accommodation to the drawer of the cheque. Therefore, it is all the more necessary that the drawer of the cheque should not be allowed to abuse the accommodation given to him by a creditor by way of acceptance of a post-dated cheque. If stoppage of payment of a post-dated cheque is permitted to take the case out of the purview of Section 138 of the Act, it will amount to allowing the party to take advantage of his own wrong." 55. In Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., a Division Bench of this Court referred to the object of Section 138 thus: "16. Section 138 of the Act was inserted by the Banking, Public Financial Institutions and Negotiable Instruments 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 ....
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....ontemplated by Section 320 of the Code of Criminal Procedure (hereinafter "Cr.PC") will not be applicable in the strict sense since the latter is meant for the specified offences under the Penal Code, 1860. 11. So far as Cr.PC 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. Sub-section (1) of Section 320 enumerates the offences which are compoundable without the leave of the court, while sub-section (2) of the said Section specifies the offences which are compoundable with the leave of the court. 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 Cr.PC which states that "No offence shall be compounded except as provided by this Section". A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Penal Code also cannot be compounded. However, since Section 147 w....
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....ing an avalanche of cases (New Delhi: Universal Law Publishing Co. Pvt. Ltd., 2009: "... Unlike that for other forms of crime, the punishment here (insofar as the complainant is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque. If we were to examine the number of complaints filed which were 'compromised' or 'settled' before the final judgment on one side and the cases which proceeded to judgment and conviction on the other, we will find that the bulk was settled and only a miniscule number continued." 18. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect. 21. With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to fr....
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....g to the mode and manner of compounding of an offence. Section 147 will only override Section 320(9) of the Code insofar as offence under Section 147 of the NI Act is concerned. This is also the ratio in Damodar [(2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] (see para 12). Therefore, the submission of the learned counsel for the appellant to the contrary cannot be accepted." 59. In Kaushalya Devi Massand v. Roopkishore Khore, (2011) 4 SCC 593, a Division Bench of this Court succinctly stated: "11. Having considered the submissions made on behalf of the parties, we are of the view that the gravity of a complaint under the Negotiable Instruments Act cannot be equated with an offence under the provisions of the Penal Code, 1860 or other criminal offences. An offence under Section 138 of the Negotiable Instruments Act, 1881, is almost in the nature of a civil wrong which has been given criminal overtones." 60. In R. Vijayan v. Baby, (2012) 1 SCC 260, this Court referred to the provisions of Chapter XVII of the Negotiable Instruments Act, observing that Chapter XVII is a unique exercise which blurs the dividing line between civil and cri....
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....rced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1)(b) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offenc....
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....payment instructions had been issued. If the same is not acceptable to the appellant, it is their choice but that would not allow them to prosecute the respondents herein in pursuance to the complaint which they have lodged implicating these two respondents." 6. In the background, of the facts of the instant case and the statutory provisions and the mandate of the Hon'ble Supreme Court, in cases of Kanchan Mehta, Madan Tiwari and P. Mohanraj [supra], once the proceedings under Section 138 have been held to be proceedings in the form of a civil sheep in a criminal wolf's clothing, therefore, once the petitioner - accused has amicably decided to settle/liquidate/ discharge his liability, though, the transactionproceedings have a tinge of criminal liability, then, on settling the entire liability in view of Section 147 of the Negotiable Instruments Act, the compounding of offences, on discharge of liability, appears to be genuine, is certainly is a step towards securing the ends of justice. It is relevant to observe that once the Respondent- Complainant who had initiated the proceedings under Section 138 of the Negotiable Instruments Act, 1881, has received his cake then, no useful....
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.... accused has discharged/liquidated his liability towards Respondent-Complainant, therefore, the continuance of criminal proceedings will not serve any purpose; secondly, compounding of an offence would enable both the parties to lead life of respect and dignity in the society; thirdly, once no dispute remains between the parties to the lis, then, obviously the law cannot be so harsh so as to stand as a wall between the parties notwithstanding the amicable settlement inter se the parties; fourthly, continuation of criminal proceedings in such circumstances, would only cause an irreparable harassment and hardship and may even tarnish and spoil the reputation of the petitioner-accused; fifthly, the Court proceedings cannot be permitted to de-generate into a weapon of harassment and persecution; sixthly, the power to do complete justice is the very essence of every judicial justice dispensation system and it cannot be diluted by distorted perceptions and is not a slave to anything, except to the caution and circumspection, the standards of which the Court sets before it, in exercise of such plenary and unfettered power inherently vested in it while donning the cloak of compassion to ac....