2025 (6) TMI 1003 - HC - Indian Laws

Dishonour of Cheque - compounding of offence after upholding the judgment of conviction and order of sentence passed by learned court below - HELD THAT - This Court in Gulab Singh v. Vidya Sagar Sharma 2017 (12) TMI 1837 - HIMACHAL PRADESH HIGH COURT while relying upon judgment of Hon ble Apex Court as well as other Constitutional Courts has already held that court while exercising power under Section 147 of Act can proceed to compound offence even in those cases where accused stands convicted. Hon ble Apex Court in Damodar S. Prabhu V. Sayed Babalal H. 2010 (5) TMI 380 - SUPREME COURT has categorically held that offence punishable under Section 138 of the Negotiable Instruments Act can be compounded after recording of conviction hence this court while exercising power under Section 147 of the Act read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita 2023 can proceed to compound the offence alleged to have been committed by the petitioner and set-aside judgment of conviction recorded by the courts below. Conclusion - The power to compound u/s 147 of the Act is plenary and can be exercised at any stage including after conviction and sentence. The judgment of conviction and sentence passed by the courts below as well as the criminal revision order were recalled and set aside. This court finds no impediment in accepting the prayer made on behalf of the applicant through instant application for compounding of the offence and same is allowed - Application disposed off.

Summary

The core legal questions considered in this judgment revolve around the scope and exercise of the court's power to compound an offence under Section 147 of the Negotiable Instruments Act (the 'Act'), particularly after a conviction has been recorded under Section 138 of the Act. Specifically, the issues are:

1. Whether the court has jurisdiction to compound an offence under Section 138 of the Act after a conviction and sentence have been upheld by the trial court, appellate court, and the High Court.

2. The applicability and interplay of Section 147 of the Act with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, and the procedural provisions under the Code of Criminal Procedure (Cr.P.C), particularly Section 320, regarding compounding of offences.

3. The effect of an amicable compromise between the accused and the complainant on the continuation of criminal proceedings after conviction.

Issue-wise Detailed Analysis

Issue 1: Power of the Court to Compound Offence Post-Conviction

The legal framework governing this issue primarily includes Section 138 and Section 147 of the Negotiable Instruments Act, 1881, read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, and Section 320 of the Cr.P.C. Section 138 penalizes the dishonour of cheques, while Section 147 authorizes the compounding of offences under Section 138 at any stage of the proceedings.

The court referred to precedents including the judgment of the Hon'ble Apex Court in K. Subramanian v. R. Rajathi (2010) 15 SCC 352, which held that even after conviction, the offence under Section 138 can be compounded if a compromise is reached between the parties. The court also cited Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663, which reaffirmed that compounding is permissible post-conviction.

The court's reasoning emphasized the legislative intent behind Section 147 of the Act, which explicitly allows compounding "at any stage of the proceeding," thereby including post-conviction stages. The court noted that the power to compound is a salutary provision aimed at promoting settlement and reducing litigation.

Key evidence included the fact that the accused had paid the entire cheque amount to the complainant after the final judgment, and the complainant had no objection to quashing the conviction and sentence. The court found the compromise genuine and complete.

Competing arguments, if any, were implicitly addressed by relying on authoritative precedents that support compounding post-conviction and by the complainant's consent to the compounding. The court rejected any notion that conviction precludes compounding.

Conclusion: The court held that it has jurisdiction and power to compound the offence under Section 138 of the Act even after conviction and sentence have been recorded and upheld by lower courts.

Issue 2: Interplay of Section 147 of the Act and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023

Section 147 of the Act permits compounding of offences under Section 138, while Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, provides the procedural mechanism for compounding in the current statutory framework. The court interpreted these provisions harmoniously, allowing the exercise of compounding power under Section 147 read with Section 528.

The court relied on prior judgments from various High Courts, including the Rajasthan and Gujarat High Courts, which have held that the power to compound under Section 147 is not ousted by the fact that conviction has been recorded. The procedural provisions under Section 528 of the new statute were treated as enabling provisions facilitating compounding applications.

The court applied these provisions to the facts, noting the compromise and full payment by the accused, which justified compounding. The court found no legal impediment in the statutory scheme to entertain compounding post-conviction.

Conclusion: The court confirmed that Section 147 of the Act read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, empowers it to compound the offence even after conviction.

Issue 3: Effect of Amicable Settlement After Conviction

The court recognized that the accused had paid the entire cheque amount to the complainant after the dismissal of the criminal revision petition, thereby settling the dispute amicably. The complainant's counsel acknowledged receipt of the compensation and consented to quash the conviction and sentence.

The court examined precedents where courts have allowed compounding and acquittal post-conviction upon amicable settlement, emphasizing the public policy favoring compromise to reduce the burden on courts and promote reconciliation.

The court applied these principles and facts to hold that the amicable settlement post-conviction is a valid ground for compounding the offence and setting aside the conviction and sentence.

Conclusion: The court accepted the compromise and allowed compounding, resulting in acquittal of the accused.

Significant Holdings

"...court, while exercising power under Section 147 of Act can proceed to compound offence even in those cases, where accused stands convicted."

"...Section 147 of the Negotiable Instruments Act read with Section 320 of the Code of Criminal Procedure... in view of the compromise arrived at between the parties, the petitioner should be permitted to compound the offence committed by him under Section 138 of the Code."

"...offence punishable under Section 138 of the Negotiable Instruments Act can be compounded after recording of conviction."

The court conclusively held that the power to compound under Section 147 of the Act is plenary and can be exercised at any stage, including after conviction and sentence. The judgment of conviction and sentence passed by the courts below as well as the criminal revision order were recalled and set aside. The accused was acquitted of the offence under Section 138 of the Act on the basis of the compromise and full payment made to the complainant.