S.147 NI Act | Every Offence Under Negotiable Instruments Act Is Compoundable: Karnataka High Court

A single judge bench of Justice H.B. Prabhakara Sastry allowed the joint applications filed by accused Arun Vincent Rajkumar and complainant S Mala, seeking to compound the offence and agreeing to set aside the conviction handed down to the accused under Section 138 of the Act by the trial court and upheld by the appellate court, as a condition of amicable settlement arrived between them.

The bench said, "Section 147 of the N.I. Act has made every offence punishable under the N.I. Act as compoundable. As such, there is no bar for the parties in the proceeding to compound the offence. However, at the same time, the guidelines laid down by the Hon'ble Apex Court in Damodar S. Prabhu's Case regarding imposing graded cost on litigant also is to be borne in mind."

Case Details:

The accused had approached the High Court challenging the confirmation of his conviction for the offence punishable under Section 138 of the NI Act. The judgment of conviction and order on sentence passed by the Additional Chief Metropolitan Magistrate, Bangalore in all the four matters were confirmed by the Fast Track Court in the Criminal Appeals preferred by the present petitioner, who was the accused in the Trial Court.

Both the parties approached the High Court with a memorandum of settlement, whereby it was agreed that the complainant in all these four matters, by accepting a total sum of ₹9,00,000/- has agreed for the acquittal of the present petitioner (accused) from the alleged offence punishable under Section 138 of the N.I. Act and also has agreed for refunding of the deposits said to have been made by the petitioner herein in the Trial Court as well as in the High Court.

Findings:

After inquiring both the parties, the Court said, "Both parties have, with their free consent and out of their own volition, without being influenced by undue influence, duress or misrepresentation or by mistake, have entered into the terms of settlement in their best interest. Hence, there is no embargo to deny them the permission to settle the matter."

It referred to the judgment of the apex court in the case Damodar S. Prabhu v. Sayed Babalal H, wherein it was held if the application for compounding is made before the Sessions Court or High Court in revision or appeal, such compounding is permitted to be allowed on the common condition that the accused pays 15% of the cheque amount by way of cost.

Accordingly, it allowed the joint application and said, "The parties to the present petitions are permitted to compound the offence, however, subject to the petitioner herein (accused) paying a total sum of ₹81,000/- towards graded cost, in this Court, within fifteen days from today."

Further, it said subject to the payment of the graded cost by the petitioner, the judgments of conviction are set aside and the petitioner is acquitted of the alleged offence punishable under Section 138 of the Negotiable Instruments Act in all the four revisions petitions.

Case Title: Arun Vincent Rajkumar v S Mala

Case No: CRIMINAL REVISION PETITION No.579 OF 2015

Citation: 2022 LiveLaw (Kar) 206

Date of Order: June 1, 2022

Appearance: Advocate Satyanarayana S. Chalke for petitioner; Advocate S.V. Lakshminarayana for respondent

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