Pravesh Vs Loyal kingdom Co-opreative Natc Society Ltd.

…Respondent Coram The Hon’ble Mr. Justice Sushil Kukreja, Judge. Whether approved for reporting?¹ For the petitioner: Mr. Mukesh Sharma, Advocate. For the respondent: Mr. Mayank Sharma, Advocate. ________________________________________________ Sushil Kukreja, Judge (oral)

¶10

The instant petition has been filed by the petitioner-accused under Section 438 read with Section 442 of the Bharatiya Nagarik Suraksha Sanhita (for short ‘BNSS’) against judgment, dated 16.01.2025, passed by learned Additional Sessions Judge, Rohru, Camp at Theog, District Shimla, H.P., in Case RBT No. 42-T/10 of 2024/2023, whereby the judgment of conviction, dated 04.10.2023, and order of sentence, dated 12.10.2023, passed by learned

¶11

1 Whether reporters of Local Papers may be allowed to see the judgment?

¶12

Neutral Citation No. ( 2025:HHC:34409 )

¶13

2

¶14

Additional Chief Judicial Magistrate, Theog, District Shimla, H.P., in CIS No. 145/2021, was affirmed.

¶15

The brief facts, giving rise to the present petition, can succinctly be summarized as under: 2(a). The Loyal Kingdom Co-operative NATC Society Ltd. (hereinafter referred to as the complainant society) used to deal in advancing personal loans and the accused (petitioner herein) availed loan facility of Rs.2,00,000/- from the complainant society, after executing various documents. The petitioner could not repay the loan installments, as agreed and the outstanding loan liability became Rs.2,85,428/-. Thereafter, the petitioner, in order to liquidate the outstanding loan liability, issued cheque bearing No. 560661, dated 21.01.2021, amounting to Rs.2,85,428/drawn on SBI, Branch Deha, District Shimla, H.P., in favour of the complainant society. However, the aforesaid cheque, on being presented for encashment by the complainant society in H.P. State Co-operative Bank Theog, was returned by the Bank with remarks ‘insufficient funds’. Thereafter, on 26.02.2021, the complainant society issued demand notice, through registered post, which was received by the petitioner on 04.03.2021, but the petitioner failed to liquidate his

¶16

Neutral Citation No. ( 2025:HHC:34409 )

¶17

3

¶18

financial liability towards the complainant society within the stipulated time. Resultantly, the complainant society filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”) before the learned Trial Court.

¶19

The learned Trial Court after conclusion of the

¶20

trial convicted the accused under Section 138 of the Act and sentenced him to undergo simple imprisonment for a period of one year and to pay compensation of Rs.5,00,000/- to the complainant society.

¶21

Being dissatisfied, the accused/petitioner/convict preferred an appeal before the learned Lower Appellate Court, which was dismissed, and judgment of conviction, dated 04.10.2023, and order of sentence, dated 12.10.2023, passed by the learned Trial Court, were affirmed. Hence, accused/ petitioner/convict-Pravesh preferred the instant petition under Section 438 read with Section 442 of BNSS, with a prayer that his petition be allowed and the impugned judgments and order of sentence passed by the learned Courts below be set-aside and he be acquitted.

¶22

During the pendency of the instant petition, an application (Cr.MP No. 3644 of 2025) under Section 147 of the Act has been filed by the petitioner-accused, seeking

¶23

Neutral Citation No. ( 2025:HHC:34409 )

¶24

4

¶25

permission of this Court to compound the offence by settingaside the judgment of conviction, dated 04.10.2023, and order of sentence, dated 12.10.2023, passed by learned Additional Chief Judicial Magistrate, Theog, District Shimla, H.P., in CIS No. 145/2021, and affirmed vide judgment dated 16.01.2023, passed by learned Additional Sessions Judge, Rohru, Camp at Theog, District Shimla, H.P., in Case RBT No. 42-T/10 of 2024/2023.

¶26

Today, the petitioner-accused is present before this Court and his statement has been recorded. Statement of learned counsel for the respondent-complainant society has also been recorded. Both the statements have separately been placed on the file.

¶27

In his statement, the petitioner/accused Pravesh stated that on the complaint filed by the respondent/complainant under Section 138 of the Act, he has been convicted by the Court of learned Chief Judicial Magistrate, Theog, District Shimla, H.P., vide judgment of conviction, dated 04.10.2023 and order of sentence, dated 12.10.2023, whereby he had been sentenced to undergo simple imprisonment for one year and to pay compensation of Rs.5,00,000/- to the complainant for the commission of the

¶28

Neutral Citation No. ( 2025:HHC:34409 )

¶29

5

¶30

offence punishable under Section 138 of the Act, which was further affirmed by learned Additional Sessions Judge, Rohru, camp at Theog, District Shimla, H.P., vide judgment, dated 16.01.2025. He further stated that now, during the pendency of the present proceedings, he had compromised the matter with the complainant/respondent after depositing the amount in terms of ‘One Time Settlement Scheme’. Therefore, in view of the compromise effected between the parties, the aforesaid judgment of conviction, dated 04.10.2023, and order of sentence, dated 12.10.2023, which was affirmed by learned Appellate court, vide judgment dated 16.01.2025, may be quashed and set aside and he may be acquitted of the offence punishable under Section 138 of the Act.

¶31

Shri Mayank Sharma, learned Advocate, for the complainant society stated that he has been authorized by the society to make a statement on its behalf. He further stated that the matter has been compromised with the petitioner/accused, as he had deposited the entire amount of compensation in terms of the ‘One Time Settlement Scheme’

¶32

arrived at between the parties. Now, loan account stands closed with respect to cheque bearing No. 560661, dated

¶33

Neutral Citation No. ( 2025:HHC:34409 )

¶34

6

¶35

21.01.20-21, and the respondent/Society has no objection, in

¶36

case, the matter is permitted to be compounded and the judgment of conviction, dated 04.10.2023, and order of sentence, dated 12.10.2023, passed by learned Chief Judicial Magistrate, Theog, District Shimla, H.P., and further affirmed by learned Appellate Court, vide judgment, dated 16.01.2025, is quashed and set aside and the petitioner/accused is acquitted of the offence punishable under Section 138 of the Act.

¶37

I have heard the learned counsel for the petitioner, learned counsel for the respondent and gone through the material available on record.

¶38

Having taken note of the fact that the petitioneraccused and the complainant society (respondent) have settled the matter and the complainant society has no objection in compounding the offence, therefore, this Court sees no impediment in accepting the prayer made on behalf of the accused-petitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon’ble Apex Court in

¶39

Damodar S. Prabhu V. Sayed Babalal H., (2010) 5 SCC

¶40

663 , wherein the Hon’ble Apex Court has held as under:-

¶41

Neutral Citation No. ( 2025:HHC:34409 )

¶42

7

¶43

“10. At present, we are of course concerned with Section 147 of the Act, which reads as follows:-

¶44

“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.”

¶45

At this point, it would be apt to clarify that in view of the non-obstante clause, the compounding of offences under the Negotiable Instruments Act, 1881 is controlled by Section 147 and the scheme contemplated by Section 320 of the Code of Criminal Procedure (hereinafter “CrPC”) will not be applicable in the strict sense since the latter is meant for the specified offences under the Indian Penal Code, 1860.

¶46

11. So far as the CrPC is concerned, Section 320 deals with offences which are compoundable, either by the parties without the leave of the court or by the parties but only with the leave of the Court. Sub-section (1) of Section 320 enumerates the offences which 9 are compoundable without the leave of the Court, while subsection (2) of the said section specifies the offences which are compoundable with the leave of the Court.

¶47

12. Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 of the CrPC which states that ‘No offence shall be compounded except as provided by this Section’. A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Indian Penal Code also cannot be compounded. However, since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the CrPC, especially keeping in mind that Section 147 carries a non obstante clause.”

¶48

¶49

In K. Subramanian Vs. R. Rajathi ; (2010) 15

¶50

Supreme Court Cases 352 , it has been held by the Hon’ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction. The relevant portion

¶51

of the judgment is reproduced as under:-

¶52

Neutral Citation No. ( 2025:HHC:34409 )

¶53

8

¶54

“6. Thereafter a compromise was entered into and the petitioner claims that he has paid Rs. 4,52,289 to the respondent. In support of this claim, the petitioner has produced an affidavit sworn by him on 1.12.2008. The petitioner has also produced an affidavit sworn by P. Kaliappan, Power of attorney holder of R. Rajathi on 1.12.2008 mentioning that he has received a sum of Rs. 4,52,289 due under the dishonoured cheques in full discharge of the value of cheques and he is not willing to prosecute the petitioner.

¶55

7. The learned counsel for the petitioner states at the Bar that the petitioner was arrested on 30.7.2008 and has undergone the sentence imposed on him by the trial Court and confirmed by the Sessions Court, the High Court as well as by this Court. The two affidavits sought to be produced by the petitioner as additional documents would indicate that indeed a compromise has taken place between the petitioner and the respondent and the respondent has accepted the compromise offered by the petitioner pursuant to which he has received a sum of Rs.4,52,289. In the affidavit filed by the respondent a prayer is made to permit the petitioner to compound the offence and close the proceedings.

¶56

8. Having regard to the salutary provisions of Section 147 of the Negotiable Instruments Act read with Section 320 of the Code of Criminal Procedure, this Court is of the opinion that 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.”

¶57

Since, in the instant case, the petitioner-accused

¶58

after being convicted under Section 138 of the Act, has compromised the matter with the complainant, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon’ble Apex Court. 13. Therefore, in view of the detailed discussion made hereinabove as well as law laid down by the Hon’ble Apex Court, the application is allowed and matter is ordered to be compounded.

¶59

Neutral Citation No. ( 2025:HHC:34409 )

¶60

9

¶61

Accordingly, the present matter is ordered to be

¶62

compounded and the impugned judgment of conviction, dated 04.10.2023, and order of sentence, dated 12.10.2023,

¶63

passed by learned Chief Judicial Magistrate, Theog, District Shimla, H.P., in CIS No. 145/2021, which was affirmed in appeal by learned Additional Sessions Judge, Rohru, Camp at Theog, District Shimla, H.P., in Case RBT No. 42-T/10 of 2024/2023, are quashed and set-aside and the petitioneraccused is acquitted of the charge framed against him under Section 138 of the Act. Bail bonds, if any, stand discharged.

¶64

Undisputedly, the total amount of the cheque is Rs.2,85,428/-, however, the learned counsel for the petitioner submitted that the petitioner is a poor person and the imposition of compounding fee may be reduced.

¶65

In case K. Subramanian vs. R. Rajathi (supra),

¶66

the Hon’ble Apex Court had issued the guidelines with respect to the imposition of compounding fee, which read as

¶67

under:-

¶68

“THE GUIDELINES

¶69

(i) In the circumstances, it is proposed as follows:

¶70

(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

¶71

Neutral Citation No. ( 2025:HHC:34409 )

¶72

10

¶73

made, compounding may be allowed by the Court without imposing any costs on the accused.

¶74

(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 Curt deems fit.

¶75

(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.

¶76

(d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount.

¶77

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 litigants should of course contest the proceedings to their logical end.”

¶78

17. Therefore, taking into consideration the law laid

¶79

down by the Hon’ble Apex Court (supra) and the financial condition of the petitioner, since the competent Courts can reduce the compounding fee with regard to the specific facts

¶80

Neutral Citation No. ( 2025:HHC:34409 )

¶81

11

¶82

and circumstances of the case, the petitioner is directed to deposit token compounding fee of Rs.10,000/- (rupees ten thousand), only with the H.P. State Legal Services Authority, Shimla, H.P., within four weeks from today.

¶83

The petition stands disposed of accordingly, so

¶84

also the pending miscellaneous application(s), if any.

¶85

( Sushil Kukreja ) 10^th October, 2025 Judge (virender)

Pravesh v. Loyal kingdom Co-opreative Natc Society Ltd.

Case brief

What is this about?

What did the court decide?

Pravesh v. Loyal kingdom Co-opreative Natc Society Ltd.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

New India Assurance Company Limited Vs Deepak Kumar and Others

The Land Acquisition Collector (Central Zone) Hppwd Mandi and Anr. Vs Naziran Begum and Ors.

The Land Acquisition Collector (Central Zone) Hppwd Mandi and Anr. Vs Rafique Mohammed and Ors.

Purab Ram Vs Shyam Lal and another

Sher Singh Vs State of Hp and Ors.

The Executive Officer, Hp Bsm and Development Authority New Isbt, Tuti Kandi, Shimla and Another Vs Bintu Ram and Others