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TMI Blog2021 (6) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... ned 4th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Mehsana passed in Criminal Case No.1813 of 2019, under Section 138 of the Negotiable Instruments Act, 1881." 2. The brief facts of the case as stated in the application are reproduced hereinbelow:- 2.1. The applicant issued a cheque dated 29.11.2018 bearing no.088494 amounting to Rs. 9,00,000/- drawn on Axis Bank, Naranpura Branch in favour of the original complainant and on deposition of the same, the cheque came to be dishonored on 05.12.2019 with notings that 'Account Closed' and the concerned bank informed the original complainant on 15.01.2019 as stated by the complainant. After issuance of notice, the original complainant instituted Criminal Complaint No.1813 of 2019 for the alleged offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short "the NI Act"). 2.2. The learned trial court vide order dated 31.12.2019, convicted the applicant imposing one year Simple Imprisonment and also directed the applicant to pay compensation to the original complainant to the tune of Rs. 13,50,000/-, in default to which, further imprisonment of six months was directed. 2.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the learned advocate Dr.Venugopal Patel for the applicant, learned advocate Mr.DigantPopat for respondent no.2 and learned APP Ms.NishaThakore for the respondent-State. 8. On 09.03.2021, this Court passed the following order:- "1. Heard Dr.Venugopal Patel, learned advocate for the applicant, Mr.Digant M. Popat, learned advocate for the respondent no.2 and Ms. NishaThakore, learned APP for respondent-State. 2. Learned advocate for the applicant has taken this Court through the factual matrix arising out of the present application. He submitted that the amount has been repaid in cash. He submitted that respondent No. 2 has filed an affidavit in these proceedings and has declared that the dispute between the applicant and respondent No. 2 is resolved and the respondent No. 2 objection if the judgment and order dated 13.12.2019 passed in Criminal Case No. 1813 of 2019 under Section 138 of the Negotiable Instruments Act is quashed and set aside. 3. Since the applicant is also convicted under Section 138 of the Negotiable Instruments Act, learned advocates for appearing for both the sides, have relied upon the decisions reported in (2012) 1GDC 387, 2004(2) GLH 544 and (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of law of interpretation while dealing with the language of non obstante clause on the question of construction, it has been observed that:- "As has been stated, clause (b) of Section 138 of the Act provides that the annual value of any building shall "notwithstanding anything contained in any other law for the time being in force" be deemed to be the gross annual rent for which the building might "reasonably at the time of the assessment be expected to be let from year to year" While therefore, the requirement of the law is that the reasonable letting value should determine the annual value of the building, it has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force". It appears to us that it would be a proper interpretation of the provisions of clause (b) of Section 138 of the Act to hold that in a case where the standard rent of a building has been fixed under Section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, but, where this is not so, and the building has never been l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... economic offence within the meaning of the economic offence so far as the applicability of Limitation Act 1974 , but sull it is an offence falling within the compass of offences against property within the meaning of Chapter XVII of Indian Penal Code. Without entering into the point whether existence of mens rea is required to be brought on record legally to bring home the charge against the accused of the offence under Section 138 of NI Act, at least can be inferred that the intention of legislature while inserting Section 147 of the NI Act was clear that the aggrieved party can compound the offence. On a plain reading of Section 147 of NI Act, it 1s clear that the same does not confer any obligation to obtain permission for entering into a compromise or to compound the offence. 27. The country is under the process of and progress towards globalization. So the intention of the legislature and object of enacting "Banking", Public Financial Institutions and the Negotiable Instrument Laws (Amended Act) 1988 and subsequent enactment, 1.e., Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002 leads this Court to a conclusion that the offence made punishable under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach to a conclusion that it can be considered and looked into as one of such special circumstances especially when grant of previous permission to enter into compromise for the purpose of compounding offence is not made a condition precedent in Section 147 of NI Act. Of course, the parties compounding the offence under Section 138 of NI Act obviously are bound to satisfy the conscious of the court on facts, when the jurisdiction under Article 226 of the Constitution of India read with Section 482 Cr.P.C. is invoked with readiness and willingness to pay the reasonable amount of costs, if awarded while dealing with such petitions." 11. It would be apposite to refer to the observations made and guidelines issued by the Apex Court in the case of Damodar S. Prabhu V/s Sayed Babalal H., [(2010) 5 SCC 663], which are produced as under:- "10. At present, we are of course concerned with Section 147 of the Act, which reads as follows: "147, Offences to be compoundable.--Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable." At this point, it would be apt to clarify that in view of the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng can be done at the instance of the complainant or with the leave of the court. The Guidelines:- (i) In the circumstances, it is proposed as follows: (a) That directions can be given that the Writ of Summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused. (b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 of the 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. 25. The graded scheme for imposing costs is a means to encourage compounding at an early stage of litigation. In the status quo, valuable time of the Court is spent on the trial of these cases and the parties are not liable to pay any Court fee since the proceedings are governed by the Code of Criminal Procedure, even though the impact of the offence is largely confined to the private parties. Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent Court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance. Bona fide liti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 12-5-2009 passed by the learned Addl. Sessions Judge, Fast Track Court No.5, Vadodara, in Criminal Appeal No.32 of 2008 is hereby confirmed and the applicant-accused is ordered to be acquitted. He is in jail and hence, he is ordered to be released forthwith, if not required in any other case. Fine, if any, paid by the accused is ordered to be refunded to him. The parties are permitted to compound the offence. Rule is made absolute....." 13. This Court by the order dated 24.11.2011 in Criminal Revision Application No.479 of 2011 made the following observations:- "6. The Apex Court in the case of Vinay DevannaNayak v. RyotSevaSahakari Bank Ltd. reported in AIR 2008 SC 716 has observed as under in paras 17 18 of the judgment: "17. As observed by this Court in Electronic Trade & Technology Development Corporation Ltd.v. Indian Technologists and Engineers, 1996) 2 SCC -739, the object of bringing Section 138 in the statute book is to inculcate faith in the efficacy of banking operation and credibility in transacting business on negotiable instruments. The provision is intended to prevent dishonesty on the party of the drawer of negotiable instruments in issuing cheques without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompound the offence and considering the decision of the learned Single Judge of this Court in the case of KIRPALSINGH PRATAPSINGH (Supra) and as neither the learned APP nor the learned advocate appearing on behalf of the respondent No. 2, under instructions from his client, have no objection in permitting the applicant to compound the offence for which the applicant is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, applicant is permitted to compound the offence for which he is convicted and consequently the order of conviction passed by the learned trial Court dated 12/07/2005 in Criminal Case No. 581/2002 and the order passed by the learned Sessions Court dated 30/06/2009 in Criminal Appeal No. 26/2005 confirmed by this Court in Criminal Revision Application No. 619/2009 are hereby quashed and set aside." 15. This Court by the order dated 04.06.2015 in Criminal Revision Application No.262 of 2015 made following observation:- "4. Taking into consideration the fact that the dispute between the parties has been amicably settled, the offence stands compounded. Accordingly, this application is allowed. The order dated 04.01.2014 passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the issue between the parties and hence, the present application is entertained. 16.3. In view of the above observations and in view of the guidelines as laid down in the case of Damodar S. Prabhu (Supra) and taking into account the fact that the parties have settled the dispute amicably,in view of this court the compounding of the offence is required to be permitted. 17. The present application is allowed. The judgment and order dated 31.12.2019 passed in Criminal Case No.1813 of 2019 by the learned 4th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Mehsana under Section 138 of the NI Act and subsequent proceedings, if any, are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. 18. The total amount of cheque is Rs. 9,00,000/-. In view of this Court Rs. 90,000/- is required to be deposited with the Gujarat State Legal Services Authority. Learned advocate for the applicant has stated that it is difficult for the applicant in the present times to deposit of Rs. 90,000/- with the Gujarat State Legal Services Authority and that Court may take liberal approach. Acceding to the request of the learned advocate for the applicant and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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