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CHEQUE BOUNS

whether the cheque bouns case can be compounded ?-The object of Section 320 Cr.P.C., which would not in the strict sense of the term apply to a proceeding under the Negotiable Instruments Act, 1881, gives the parties to the proceedings an opportunity to compound offences mentioned in the table contained in the said section, with or without the leave of the court, and also vests the court with jurisdiction to allow such compromise. By virtue of Sub-Section (8), the Legislature has taken one step further in vesting jurisdiction in the Court to also acquit the accused/convict of the offence on the same being allowed to be compounded. Inasmuch as, it is with a similar object in mind that Section 147 has been inserted into the Negotiable Instruments Act, 1881, by amendment, an analogy may be drawn as to the intention of the Legislature as expressed in Section 320(8) Cr.P.C., although, the same has not been expressly mentioned in the amended section to a proceeding under Section 147 of the aforesaid Act.

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 IN THE SUPREME COURT OF INDIA

 CRIMINAL APPELLATE JURISDICTION

 CRIMINAL APPEAL NO.2281 OF 2009

(Arising out of S.L.P.(Crl.)No...9263/09
CRL.M.P.15423/2009)

K.M. IBRAHIM ... APPELLANT

 Vs.

K.P. MOHAMMED & ANR. ... RESPONDENTS

 J U D G M E N T

ALTAMAS KABIR, J.

1. Delay condoned.

2. Leave granted.

3. The appellant issued a cheque to the first

respondent for an amount of Rs.95,000/- in

discharge of a legally enforceable debt. However,

when the cheque was presented by the first
 2

respondent to his bank, the same was dishonoured on

account of insufficiency of funds in the account of

the appellant. The respondent thereupon issued

statutory notice to the appellant within the

prescribed time limit informing the appellant about

the dishonor of the cheque and calling upon him to

pay the amount due. Since the appellant failed to

pay the amount in time, the respondent filed a

complaint before the Chief Judicial Magistrate,

Kasargode. Considering the evidence on record, the

Trial Court found the accused guilty of the offence

with which he had been charged and sentenced him to

undergo rigorous imprisonment for a period of one

year and to pay a fine of Rs.1,05,000/-. In

default of payment of fine, it was ordered that the

appellant would undergo rigorous imprisonment for a

further period of three months. If, however, the

fine was realized, directions were given that a sum

of Rs.1,00,000/- should be given to the respondent

by way of compensation.
 3

4. Aggrieved by the said judgment, the appellant

filed Criminal Appeal No.74 of 2003. While

affirming the conviction, the Appellate Court

reduced the sentence to a period of one month and a

fine of Rs.95,000/-. In default of said payment,

the appellant was directed to undergo imprisonment

for a further period of two months.

5. The said order was challenged before the High

Court, which decided the matter in the light of

Section 357(3) Cr.P.C. The High Court dismissed

the revision against which the present appeal has

been filed.

6. At the very initial stage of hearing, a

question was raised on behalf of the appellant as

to whether an offence under Section 138 of the

Negotiable Instruments Act, 1881, could be

compounded under Section 147 of the said Act read

with Section 320 Cr.P.C.
 4

7. Appearing for the appellant, Mr. Mukul Rohtagi,

learned Senior Advocate, contended that since a

specific power had been given to the parties to a

proceeding under the Negotiable Instruments Act

under Section 147 to compound the offence, there

could be no reason as to why the same cannot be

permitted even after conviction, which had been

affirmed upto the High Court. It was urged that

in order to facilitate settlement of disputes, the

legislature thought it fit to insert Section 147 by

Amending Act 55 of 2002. Such amendment came into

effect from 6th February, 2003, and provided that

notwithstanding anything contained in the Code of

Criminal Procedure, 1973, every offence punishable

under the Act would be compoundable. Mr. Rohtagi

urged that in view of the non-obstante clause, the

provisions of Section 147 were given an overriding

effect over the Code and in view of the clear

mandate given to the parties to compound an offence
 5

under the Act, reference to Section 320 Cr.P.C. can

be made for purposes of comparison only in order to

understand the scope of Section 147 of the

Negotiable Instruments Act. Mr. Rohtagi submitted

that the said position had been accepted by this

Court in various decisions, such as in the case of

O.P. Dholakia vs. State of Haryana & Anr. [(2000) 1

SCC 762], wherein it was held that since the

petitioner had already entered into a compromise

with the complainant and the complainant had

appeared through counsel and stated that the entire

money had been received by him and he had no

objection if the conviction already recorded under

Section 138 of the Negotiable Instruments Act is

set aside, the Hon'ble Judges thought it

appropriate to grant permission, in the peculiar

facts and circumstances of the case, to compound

the offence. While doing so, this Court also

indicated that necessarily the conviction and

sentence under Section 138 of the Act stood
 6

annulled.

7A. The said view has been consistently followed in

the case of (1) Anil Kumar Haritwal & Anr. vs. Alka

Gupta & Anr. [(2004) 4 SCC 366]; (2) B.C. Seshadri

vs. B.N. Suryanarayana Rao [2004 (11) SCC 510]

decided by a three Judge Bench; (3) G. Sivarajan

vs. Little Flower Kuries & Enterprises Ltd. & Anr.

[(2004 11 SCC 400]; (4) Kishore Kumar vs. J.K.

Corporation Ltd. [(2004 13 SCC 494]; (5) Sailesh

Shyam Parsekar vs. Baban [(2005 (4) SCC 162]; (6)

K. Gyansagar vs. Ganesh Gupta & Anr. [(2005) 7 SCC

54]; (7) K.J.B.L. Rama Reddy vs. Annapurna Seeds &

Anr. [(2005) 10 SCC 632]; (8) Sayeed Ishaque Menon

vs. Ansari Naseer Ahmed [(2005) 12 SCC 140]; (9)

Vinay Devanna Nayak vs. Ryot Sewa Sahakari Bank

Ltd. [(2008) 2 SCC 305], wherein some of the

earlier decisions have been noticed; and (10)

Sudheer Kumar vs. Manakkandi M.K. Kunhiraman & Anr.

[2008 (1) KLJ 203], which was a decision of a
 7

Division Bench of the Kerala High Court, wherein

also the issue has been gone into in great detail.

8. The golden thread in all these decisions is

that once a person is allowed to compound a case as

provided for under Section 147 of the Negotiable

Instruments Act, the conviction under Section 138

of the said Act should also be set aside. In the

case of Vinay Devanna Nayak (supra), the issue was

raised and after taking note of the provisions of

Section 320 Cr.P.C., this Court held that since the

matter had been compromised between the parties and

payments had been made in full and final settlement

of the dues of the Bank, the appeal deserved to be

allowed and the appellant was entitled to

acquittal. Consequently, the order of conviction

and sentence recorded by all the courts were set

aside and the appellant was acquitted of the charge

leveled against him.
 8

9. The object of Section 320 Cr.P.C., which would

not in the strict sense of the term apply to a

proceeding under the Negotiable Instruments Act,

1881, gives the parties to the proceedings an

opportunity to compound offences mentioned in the

table contained in the said section, with or

without the leave of the court, and also vests the

court with jurisdiction to allow such compromise.

By virtue of Sub-Section (8), the Legislature has

taken one step further in vesting jurisdiction in

the Court to also acquit the accused/convict of the

offence on the same being allowed to be compounded.

Inasmuch as, it is with a similar object in mind

that Section 147 has been inserted into the

Negotiable Instruments Act, 1881, by amendment, an

analogy may be drawn as to the intention of the

Legislature as expressed in Section 320(8) Cr.P.C.,

although, the same has not been expressly mentioned

in the amended section to a proceeding under

Section 147 of the aforesaid Act.
 9

10. Apart from the above, this Court is further

empowered under Article 142 of the Constitution to

pass appropriate orders in line with Sub-Section

(8) of Section 320 Cr.P.C. in an application under

Section 147 of the aforesaid Act, in order to do

justice to the parties.

11. As far as the non-obstante clause included in

Section 147 of the 1881 Act is concerned, the 1881

Act being a special statute, the provisions of

Section 147 will have an overriding effect over the

provisions of the Code relating to compounding of

offences. The various decisions cited by Mr.

Rohtagi on this issue does not add to the above

position.

12. It is true that the application under Section

147 of the Negotiable Instruments Act was made by

the parties after the proceedings had been

concluded before the Appellate Forum. However,
 10

Section 147 of the aforesaid Act does not bar the

parties from compounding an offence under Section

138 even at the appellate stage of the proceedings.

Accordingly, we find no reason to reject the

application under Section 147 of the aforesaid Act

even in a proceeding under Article 136 of the

Constitution.

13. Since the parties have settled their disputes,

in keeping with the spirit of Section 147 of the

Act, we allow the parties to compound the offence,

set aside the judgment of the courts below and

acquit the appellant of the charges against him.

14. The appeal is, accordingly, allowed in the

aforesaid terms.

 .............................................J.
 (ALTAMAS KABIR)

 ................................................J.
 (CYRIAC JOSEPH)
 11New Delhi
Dated: December 2, 2009
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