Negotiable Instruments Act | Court Can Compound Offences U/S 147 Even After Conviction: Himachal Pradesh High Court

Justice Sandeep Sharma delivered this judgment while hearing a petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, read with Section 147 of the Negotiable Instruments Act. The petitioner sought the compounding of an offence under Section 138 of the Act and requested that the judgment of conviction and order of sentence imposed by the Judicial Magistrate First Class, Shimla, be set aside.

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

The court further elaborated on the flexibility granted under the law, emphasizing that the purpose of Section 147 is to facilitate the settlement of disputes in financial matters, even after a formal conviction has been recorded.

The case originated from proceedings instituted by the complainant under Section 138 of the Negotiable Instruments Act, alleging that the petitioner had issued a cheque that was dishonoured due to insufficient funds.

After the petitioner was convicted and sentenced to imprisonment and ordered to pay compensation, he entered into a compromise with the complainant, settling the matter for a reduced amount. The petitioner subsequently approached the High Court to have the offence compounded in light of this settlement.

In support of its decision, the court referenced several key precedents. The decision in Damodar S. Prabhu v. Sayed Babalal H., (2010), was pivotal, as it upheld the principle that offences under Section 138 can be compounded at any stage, including after conviction.

The court also referred to K. Subramanian v. R. Rajathi, (2010), where the Supreme Court had affirmed that Section 147 of the Negotiable Instruments Act, when read in conjunction with Section 320 of the Criminal Procedure Code, permits the compounding of offences post-conviction.

Further, Justice Sharma cited the judgment of the Rajasthan High Court in Naresh Kumar Sharma v. State of Rajasthan, which allowed for the recall of a conviction following a post-conviction settlement. This case reinforced the view that the courts have the latitude to compound offences even after a conviction, thereby promoting the settlement of financial disputes through mutual agreement.

Upon reviewing the facts involved, the court quashed the conviction and sentence previously recorded against the petitioner. In doing so, the court acknowledged the settlement reached between the parties and accepted the request for compounding the offence.

Case Title: Satvir Singh Vs Rajesh Pathania

Citation: 2024 LiveLaw (HP) 51

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