2022 (5) TMI 1358 - PUNJAB & HARYANA HIGH COURT

A study of the compounding of offences under section 147 of the Negotiable Instruments Act, 1881 at the stage of appeal as well as revision.

Powers under Section 147 of the Negotiable Instruments Act, 1881 can be invoked at any stage of the proceedings i.e. at the stage of trial, appeal or at the revisional jurisdiction.

As a precedent, the courts may be liberal in exercising such powers. 

The offence is almost a civil wrong which has been clothed in criminal overtones, therefore, priority should be given to compensatory mechanism. The latter ought to be given preference in comparison to construction of the rigid letters of the enactment.

The parties having settled the matter and the amount having been deposited by the petitioner with the respondent-complainant implying consent, it is deemed appropriate to invoke the power vested by virtue of Section 147 of the Negotiable Instruments Act, 1881 and allow the compounding of the offence under Section 138 of the Negotiable Instruments Act, 1881.

There are two criminal revision petitions 1465 and 1467 of 2019 both titled as "Parmeshwar Kumar Dixit vs. State of Punjab & Anr." both the petitions are between the same parties arising out of dishonour of cheque although for different cheque numbers.

The petitioner being convicted for commission of offence, under Section 138 of the Negotiable Instruments Act, 1881, sentenced to undergo rigorous imprisonment for one and half years (18 months) along with fine of Rs. 4,000/-, if the fine not being paid a further simple imprisonment of one month. 

Criminal Revision No. 1465 of 2019 arose due to the dishonour of cheque No. 074718 dated 22.03.2010 for an amount of Rs.5,00,000/- drawn on IDBI Bank Limited, Miller Ganj, Ludhiana, secondly Criminal Revision No. 1467 of 2019 for dishonour of cheque No. 074721 dated 23.03.2010 for an amount of Rs.5,00,000/-.

Counsel on both sides agreed that common questions and issues arose for determination in both the aforesaid revision petitions, both can be heard and decided together. After the first hearing the counsel of the petitioner sought an opportunity to explore amicable settlement between the parties and offered to pay the principal amount of both the aforesaid cheques. 
This being accepted by the counsel of the respondent, a statement was made in the court that in the event of receipt of principal amount of both cheques the opposite side would not press for interest on the due amount and would have no objection to the matter being compounded. 

A sum of Rs. 10,00,000/- was paid to the respondent accordingly there being no objection to the matter being compounded between the parties. The amount of fine so imposed by the trial Court was also deposited.

Thus time and again held by the courts, offence under Section 138 of the Negotiable Instruments Act, 1881 being a civil wrong has been clothed in criminal overtones, priority/precedence should be given to compensatory mechanism.

Such decision goes a long way to strengthen the mutual relationship between the parties and serves an everlasting tool in their favour. Such an exercise is in consonance with the spirit of Section 147 of the Negotiable Instruments Act, 1881. 

Petitioner if confined to jail be released immediately in accordance with law. 

From the above narrative, we may easily understand that section 138,Negotiable Instruments Act, 1881 though a civil wrong has been empowered with criminal penalties, though there can be a timely rescue under section 147,Negotiable Instruments Act, 1881 by way of compounding of the offence at any stage of the trial.

 

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Full Text:

2022 (5) TMI 1358 - PUNJAB & HARYANA HIGH COURT

Compounding of negotiable instrument offences permits settlement and release when parties compensate and consent at appellate stages. Compounding under Section 147 of the Negotiable Instruments Act may be invoked at trial, appeal or revision where parties settle by payment and consent; courts treat the dishonour under Section 138 as a civil wrong with criminal penalties and may allow compounding, direct deposit of amounts and release from imprisonment to give effect to the compensatory mechanism.