Disposed

V. Ramasaravanan v. M/S Kimberley Petro Pump

Madras HC22 Jan 2025CRL RC/947/2021

Case brief

AI extract

What is this about?

Conviction under section 138 NI Act confirmed by trial and appellate courts was challenged in revision. During pendency, the parties settled through mediation, agreeing to pay Rs.5,60,089/- including a deposited amount. The High Court held that section 147 NI Act allows compounding at any stage, permitted compounding, annulled the conviction and sentence, treated the petitioner as acquitted, and a

What did the court decide?

Offence compounded; conviction and sentence annulled; petitioner treated as acquitted; respondent permitted to withdraw Rs.2,80,044.50 deposit with accrued interest within four weeks.

V. Ramasaravanan Vs M/S Kimberley Petro Pump — Cheque Dishonour | Madras HC (2025)

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Crl.R.C.No.947/2021

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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RESERVED ON : 09.01.2025

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PRONOUNCED ON : 22.01.2025

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CORAM

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THE HONOURABLE MR.JUSTICE SHAMIM AHMED

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Crl.R.C.No.947 of 2021

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V. Ramasaravanan S/o.Ramamurthy, Sole Proprietor Om Shakthi Travels S-1, 2^nd Floor, Kurian Complex, No.19, Railway Colony 1^st Street, Off. Nelson Manickam High Road, Chennai 600 0029.

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... Petitioner /vs/

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M/s. Kimberley Petro Pump by its Sole Proprietor Firm Shenoy Nagar, Chennai 600 030 represented by its Power Agent Mr.U.Lokesh Kumar ... Respondent

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Prayer : Criminal Revision Petition filed under section 397 and 401 of Cr.P.C. to set aside the conviction and sentence imposed on the petitioner in C.C.No.883 of 2009 dated 02.1.2019 on the file of the learned XX Metropolitan Magistrate, Allikulam Complex, Chennai which was confirmed in Crl.A.No.77 of 2020 dated 04.10.2021 on the file of the learned XXI Addl. Sessions Judge, Chennai.

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For Petitioner ... Mr.S. Kishore Kumar

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for Mr.V.Krishnamurthy

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For Respondent .... Mr.G. Peranban

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ORDER

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Heard Mr.S. Kishore Kumar, learned counsel appearing for the Revision Petitioner and Mr.G. Peranban, learned counsel appearing for the respondent and also this Court has taken the assistance of Mr.A.Gopinath, learned Govt. Advocate (crl.side).

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The instant Criminal Revision Case has been filed challenging the conviction and sentence passed in C.A.No.77 of 2020 dated 04.10.2021 by

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the learned XXI Additional Sessions Judge, Chennai confirming the conviction and sentence made in C.C.No.883 of 2009, dated 02.11.2019 passed by the learned XX Metropolitan Magistrate, Allikulam Complex, Chennai 600 003.

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The learned trial Judge has convicted the Revision

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Petitioner/accused under section 138 of Negotiable Instruments Act and sentenced him to undergo SI for a period of nine months and also directed him to pay a compensation of Rs.5,60,089/- to the complainant, failing which,

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to undergo SI for three months. The conviction and sentence imposed by the

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trial court was also confirmed by the First Appellate Court.

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The facts leading to filing of this Criminal Revision Case is as follows;

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(i)The revision petitioner, who was engaged in the business of private tourist transport operation, availed the facility of supply of fuel on credit basis to the vehicles of the accused from the respondent company and during the course of such transaction, a sum of Rs.5,60,089/- was remained unpaid towards the credit facility availed by the revision petitioner from the respondent.

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(ii) Towards final settlement of its dues, the revision petitioner issued three cheques dated 07.03.2009, 14.03.2009 and 23.03.2009 for a sum of Rs.1,85,000/-, Rs.1,85,000/- and Rs.1,90,089/- respectively drawn on UCO Bank, Seetha Nagar, Chennai-34 in favour of the respondent.

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(iii) The said cheques issued by the Revision Petitioner were returned unpaid with an endorsement ''Exceeds Arrangements' through return memo dated 05.09.2016.

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(iv) Hence the respondent issued a legal notices dated 13.03.2009, 20.03.2009 and 26.03.2009 calling upon the revision petitioner to pay the

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dishonoured cheque amounts within 15 days and the same were recieved by the revision petitioner respectively on 19.03.2009, 20.03.2009 and 28.03.2009

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(v) On receipt of notices, the respondent issued reply notice on 31.03.2009 with false averments and failed to repay the cheque amounts. Hence a complaint for the offence of section 138 of the Negotiable Instruments Act has been filed by the respondent in C.C.No.883 of 2009.

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After recording the sworn statement of the respondent and after

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being satisfied that prima facie case has been made out to proceed further against the Revision Petitioner for the offence under section 138 of NI Act, the trial Court has issued summon to the Revision Petitioner. On the appearance of the Revision Petitioner, copies have been furnished and the substance of allegation has been put to him. The Revision Petitioner has denied the allegation and has claimed to be tried.

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After considering the arguments, the learned trial court has found the Revision Petitioner guilty of the offence under section 138 of the Negotiable Instruments Act and the Revision Petitioner has been convicted and sentenced

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to undergo SI for a period of nine months and also directed him to pay a compensation of Rs.5,60,089/-, failing which, to undergo SI for three

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months. The conviction and sentence imposed by the trial court was also confirmed by the First Appellate Court.

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Aggrieved by the judgment, the Revision Petitioner has preferred the appeal in C.A.No.77 of 2020 before the XXI Additional Sessions Judge, City Civil Court, Chennai and the first appellate court dismissed the appeal vide judgment and order dated 04.10.2021, by confirming the judgment of conviction and sentence imposed by the trial court in C.C.No.883 of 2009. and it directed to secure the Revision Petitioner to undergo the sentence and to pay the compensation amount. Challenging the conviction and sentence

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passed by the both courts below, the Revision Petitioner has preferred the present Criminal Revision Case before this Court.

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During the pendency of the present Criminal Revision, this Court, by order dated 12.08.2022, referred the matter to the Tamil Nadu Mediation and Conciliation Centre, High Court, Madras and during the process of mediation, both the petitioner and respondent entered into an amicable settlement between themselves via settlement agreement dated 16.02.2023 and the settlement agreement signed by both parties and their respective counsel is taken on record and as per the terms of the Compromise, the following

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conditions were laid down between the parties which are quoted as under;

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SETTLEMENT AGREEMENT

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This Settlement Agreement entered into on 16.02.2023 between V.Ramasaravanan S/o.Ramamurthy, Sole Proprietor, Om Shakthi Travels, S-1, 2^nd Floor Kurian Complex, No.19, Railway Colony 1^st Street, off Nelson Manickam High Road, Chennai 600 029. The petitioner in Crl.R.C.No.947 of 2021, herien the party of the 1^st part.

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AND

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M/s. Kimberely Petrol Pump by its Sole Proprietor Firm, Shenoy Nagar, Chennai 600 030, Rep. By its Power Agent Mr.U.Lokesh Kumar. The respondent in Crl.R.C.No.947 / 2021, Herein the party of the 2^nd part.

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Whereas

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The dispute and differences had arisen between the parties hereto in business transaction and the party of the 2^nd part filed complaint under section 138 of Negotiable Instrument Act, against the Party of 1^st Part, the trial Court Judge in C.C.No.883/2009 convicted the Party of the 1^st Part and aggrieved by the said order he preferred Crl.A.No.77/2020 before the XXI Addl. Session Judge, Chennai and the 1^st Appellate Judge upheld the orders of the trial Judge, hence he filed Revision Petition in Crl.R.C.No.947/2021 before the Hon'ble Madras High Court.

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The matter was referred to mediation by the Hon'ble Madras

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High Court dated 12.8.2022 passed by Hon'ble Mr.Justice D.Bharatha Chakravarthy.

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The parties agreed that Mr.K.sridhar would act as their Mediator.

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Several meetings were held during the process of mediation from 6.9.2022 to 16.2.2023 and finally the parties have with the assistance of the mediation voluntarily arrived at an amicable solution resolving the above mentioned disputes and differences.

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The parties hereto confirm and declare that they have voluntarily and of their own free Will arrived at this settlement Agreement in the presence of the Mediator.

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The following terms of Settlement arrived at between the Parties hereto, that is the Petitioner and the respondent in Crl.RC.No.947/2021 is as follows:-

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A. In view of the said settlement both parties have agreed for an amicable settlement. The final settlement amount agreed between the parties is rs.5,60,089/- (Five Lakhs Sixty thousand and eighty nine rupees only) which includes the deposit amount of Rs.2,80,044.50/- (Two Lakhs eighty thousand forty four rupees and fifty paisa only) before the XX M.M.Court, Egmore, Chennai which was deposited for suspension of sentence and Bai, the balance amount of Rs.2,80,044.50/- (Two Lakhs eighty thousand forty four rupees and fifty paisa only) shall be given to the party of the 2^nd Part/or/their authorised representative by the Party of the 1^st Part/or/their authorised representative on 16.02.2023 via Demand Draft in favour of M/s.KIMBERLY

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PETRO PUMP, dt. 16.02.2023 D.D.No.350329 – Rs.2,80,044.50/- City Union Bank, Chennai Service Branch.

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B. The Party of the 1^st part have No Objection towards the discharge of the above said Deposit amount to the party of the 2^nd part in way of settlement herein.

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By signing this agreement the parties hereto state that they have no further claims or demands against each other with respect to Crl.R.C.No.947/2021 on the file of the Hon'ble Madras High Court and all disputes and differences in this regard have been amicably settled by the parties herein through the process of Mediation.'

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Learned counsel for the Revision Petitioner submits that pending Criminal Revision, both the parties have entered into a Settlement Agreement dated 16.02.2023 to the effect that the Criminal Revision case shall be settled in accordance with the terms and conditions as contained therein.

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Learned counsel for the Revision Petitioner further submits that in terms of Settlement Agreement dated 16.02.2023, the parties have agreed for final settlement amount of Rs.5,60,089/- (Rupees five lakhs, sxty thousand

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and eighty nine) which includes the deposit amount of Rs.2,80,044.50/before the XX Metropolitan Magistrate Court, Egmore, Chennai, which was

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deposited by the revision petitioner as per the direction of this Court while granting him suspension of sentence and the said amount shall be given to the respondent on 16.02.2023 vide Demand Draft taken in favour of the responent herein bearing D.D.No.350329 for Rs.2,80,044.50 /- drawn on City Union Bank, Chennai Service Branch and the revision petitioner has no objection towards the discharge of the abovesaid deposit amount to the respondent by way of settlement. He also submits that to that effect, a Memorandum was filed for intimation of settlement between the petitioner and the respondent in mediation by the petitioner herein before this court .

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Mr.G. Peranban, the learned counsel for the respondent submits

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that the parties have agreed for an amicable settlement and final settlement amount agreed between them is Rs.5,60,089/- which includes the deposit amount of Rs.2,80,044.50/- lying before the XX Metropolitan Magistrate Court, Egmore, Chennai and the remaining amount of Rs.2,80,044.50 was received by the respondent by way of Demand Draft dated 16.02.2023 drawn on City Union Bank, Chennai Service Branch. Thus, he seeks permission of this court to withdraw the amount lying before the trial court.

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Learned counsel for the Revision Petitioner further submits that

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the present Revision has been filed on 25.11.2021 before this Court and on the basis of change in circumstances, as the parties have entered into Memorandum of Compromise, it was prayed to this Court to compound the offence. It was further argued by the learned counsel for the Revision Petitioner that this Court has inherent powers to compound the offence, so that, ends of justice could be secured as the object of Negotiable Instruments Act is primarily compensatory and not punitive and moreover Section 147 of NI Act would have an overriding effect on section 320 Cr.P.C., irrespective of which stage, the parties are compromising with the kind leave of this Hon'ble Court.

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In support of his arguments, learned counsel for the Revision Petitioner has submitted that in the case of Damodar S. Prabhu vs. Sayed

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Babalal H reported at 2010 (2) SCC (Cri) 1328 , the Hon'ble Apex Court had formulatedthe guidelines for compounding the offence under section 138 N.I. Act wherein in para 21, it was pleased to observe as under :

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"With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence. It was submitted that the requirement of deposit of the costs will act as a deterrent for delayed composition, since at present, free and easy compounding of offences at any stage, however belated, gives an incentive to the drawer

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of the cheque to delay settling the cases for years. An application for compounding made after several years not only results in the system being burdened but the complainant is also deprived of effective justice. In view of this submission, we direct that the following guidelines be followed:THE GUIDELINES (i) In the circumstances, it is proposed as follows:

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(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.

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(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.

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(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.

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

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Learned counsel for the Revision petitioner also submitted that in

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the case of M/s Meters and Instruments Private Limited and another vs.

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Kanchan Mehta reported at 2017 (7) Supreme 558, the Hon'ble the Apex Court in para 18, was pleased to observe as under :

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i) Offence under Section 138 of the Act is primarily a civil wrong. Burden of proof is on accused in view presumption under Section 139 but the standard of such proof is "preponderance of probabilities". The same has to be normally tried summarily as per provisions of summary trial under the Cr.P.C. but with such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will apply and the Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect.

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(ii)The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court.

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(iii)Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused.

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(iv)Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 Cr.P.C. With this approach, prison sentence of more than one year may not be required in all cases.

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(v) Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation under Section 357(3) is considered inadequate, having regard to the amount of the cheque, the financial capacity and the conduct of the accused or any other circumstances'.

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Learned counsel for the Revision Petitioner further has relied upon

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the judgment of Gujarat High Court in the case of Kripal Singh Pratap Singh

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Ori vs. Salvinder Kaur Hardip Singh reported at 2004 Crl. L. J. 3786 wherein, the Gujarat High Court was pleased to observe as under:-

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31. In the circumstances, it is hereby declared that the compromise arrived between the parties to this litigation out of court is accepted as genuine and the order of conviction and sentence passed by the learned JMFC, Vadodara and confirmed in appeal by the learned Sessions Judge, Fast Track Court, Vadodara, therefore, on the given set of facts are hereby quashed and set aside as this court intends, otherwise to secure the ends of justice as provided under section 482 Cr.P.C. Obviously the order disposing Revision Application would not have any enforceable effect."

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Learned counsel for the Revision Petitioner has also relied upon

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the judgment of Hon'ble the Apex Court in the case of Vinay Devanna

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Nayak vs. Ryot Seva Sahkari Bank Limited reported at AIR 2008 SC 716

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wherein the Hon'ble Apex Court was pleased to observe as under :

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"18. Taking into consideration even the said provision (Section 147) and the primary object underlying Section 138, in our judgment, there is no reason to refuse compromise between the parties. We, therefore, dispose of the appeal on the basis of the settlement arrived at between the appellant and the respondent.

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19. For the foregoing reasons the appeal deserves to be allowed and is accordingly allowed by holding that since the matter has been compromised between the parties and the amount of Rs.45,000/- has been paid by the appellant towards full and final settlement to the respondent-bank towards its dues, the appellant is entitled to acquittal. The order of conviction and sentence recorded by all courts is set aside and he is acquitted of the charge levelled against him."

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Learned counsel for the Revision Petitioner has argued that the law

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regarding compounding of offences under the N.I. Act is very clear and is no more resintegra and the offences under the N.I. Act can be compounded even at any stage of the proceedings. He submits that in terms of the aforesaid law laid down by the Hon'ble Supreme Court, the parties may be permitted to compound the offence and the conviction of the petitioner be set aside.

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Per contra, Mr.A.Gopinath, the learned Govt. Advocate (crl.side) who appeared for the State and assisted this Court in the matter, has vehemently opposed the submissions made by the learned counsel for the Revision Petitioner and submits that the Revision Petitioner has already been convicted by the learned trial court and the conviction order had already been upheld by the Appellate Court in the appeal.

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The learned Govt. Advocate (crl.side) also further submitted that

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the appeal has been rejected on merit and the Revision Petitioner was convicted, then where the parties or any one of them can be permitted to place compromise and to get the order of acquittal from the Court is the question. He further submitted that the present case is nothing, but a gross misuse of the process of law and thus sentence cannot be compounded on the basis of compromise as filed by the parties.

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I have heard the learned counsel for the Revision Petitioner, learned counsel for the respondent and learned Govt. Advocate (crl.side) appearing for the State and perused the materials placed on record.

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Considering the facts as narrated above, the following question

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arose for consideration.

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'Whether the order passed by the Appellate Court confirming the conviction of the trial court under section 138 of Negotiable Instruments Act can be nullified by the High Court on the basis of compromise entered between the parties'

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Before answering the aforesaid question as framed, I shall examine

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the relevant provision of the Cr.P.C., as well as the Negotiable Instrument Act. I may extract Section 320 of Cr.P.C., and section 147 of Negotiable Instruments Act.

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Section 320 Cr.P.C. - Compounding of Offences -

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1) The offences punishable under the sections of the Indian Penal Code (45 of 1860), specified in the first two columns of the Table next following may be compounded by the persons mentioned in the third column of that Table -

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2) The offences punishable under the Sections of the Indian Penal Code (45 of 1860), specified in the first two columns of the Table next following may, with the permission of the Court before which any prosecution for such offence is pending be compounded by the persons mentioned in the third column of that Table -

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3) When any offence is compoundable under this section, the abetment of such offence or an attempt to commit such offence (when such attempt is itself an offence) may be compounded in like manner.

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4) (a) When the person who would otherwise be competent to compound an offence under this section is under the age of eighteen years or is an idiot or a lunatic, any person

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competent to contract on his behalf may, with the permission of the Court, compound such offence.

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(b) When the person who would otherwise be competent to compound an offence under this section is dead, the legal representative, as defined in the Code of Civil Procedure, 1908 (5 of 1908) of such person may, with the consent of the Court, compound such offence.

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5) When the accused has been committed for trial or when he has been convicted and an appeal is pending, no composition for the offence shall be allowed without the leave of the Court to which he is committed, or as the case may be, before which the appeal is to be heard.

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6) A High Court or Court of Session acting in the exercise of its powers of revision under Section 401 may allow any person to compound any offence which such person is competent to compound under this section.

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7) No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence.

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8) The composition of an offence under this section shall have the effect of an acquittal of the accused with whom the offence has been compounded.

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9) No offence shall be compounded except as provided by this section.

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Section 147 of the Negotiable Instrument Act :’

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"Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable."

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I have to refer the compromise deed which is on the record for

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proper adjudication :-

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SETTLEMENT AGREEMENT

AND

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The matter was referred to mediation by the Hon'ble Madras High Court dated 12.8.2022 passed by Hon'ble Mr.Justice D.Bharatha Chakravarthy.

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The parties agreed that Mr.K.sridhar would act as their Mediator.

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The parties hereto confirm and declare that they have voluntarily and of their own free Will arrived at this settlement Agreement in the presence of the Mediator.

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The following terms of Settlement arrived at between the Parties hereto, that is the Petitioner and the respondent in Crl.RC.No.947/2021 is as follows:-

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representative by the Party of the 1^st Part/or/their authorised representative on 16.02.2023 via Demand Draft in favour of M/s.KIMBERLY PETRO PUMP, dt. 16.02.2023 D.D.No.350329 – Rs.2,80,044.50/- City Union Bank, Chennai Service Branch.

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B. The Party of the 1^st part have No Objection towards the discharge of the above said Deposit amount to the party of the 2^nd part in way of settlement herein.

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It is well settled that inherent power of the Court can be exercised only when no other remedy is available to the litigants and nor a specific remedy as provided by the statute. It is also well settled that if an effective, alternative remedy is available, the High Court will not exercise its inherent power, especially when the Revision Petitioner may not have availed of that remedy. The power can be exercised by the High Court to secure the ends of justice, prevent abuse of the process of any court and to make such orders as

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may be necessary to give effect to any order under this Code or Act, depending upon the facts of the given case. This Court can always take note

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of any miscarriage of justice and prevent the same by exercising its power. These powers are neither limited, nor curtailed by any other provision of the Code or Act. However, such inherent powers are to be exercised sparingly and with caution

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In the instant case, it is true that the appeal was dismissed and the conviction and sentence was upheld by the appellate court, but it cannot be lost sight of the fact that this Court has power to intervene in exercise of its power only with a view to do the substantial justice or to avoid a miscarriage and the spirit of compromise arrived at between the parties. This is perfectly justified and legal too.

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I have considered the judgments cited by the learned counsel for the Revision Petitioner as well as by the learned Counsel for the State and other decisions of the Hon'ble Apex Court and I do not think it necessary to enlist those decisions which are taken into consideration for the purpose of the present proceedings.

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In the instant case, the Revision Petitioner is invoking the inherent power of this court after dismissal of the appeal confirming his conviction

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and sentence. In these circumstances, I have to examine as to whether for entertaining the aforesaid case, any special circumstances are made out or not, so it can be legitimately argued and inferred and held that in all cases where the Revision Petitioner is able to satisfy this Court that there are special circumstances which can be clearly spelt out subsequent proceeding invoking inherent power of this court can be modified and cannot be thrown away on that technical argument as to its sustainability once the contesting parties entered into subsequent compromise.

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In the case of Krishan Vs. Krishnaveni , reported in (1997) 4 SCC

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241 , Hon'ble the Apex Court has held that though the inherent power of the High Court is very wide, yet the same must be exercised sparingly and cautiously particularly in a case where the applicant is shown to have already invoked the revisional jurisdiction under section 397 of the Code. Only in cases where the High Court finds that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order was not correct,

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the High Court may in its discretion prevent the abuse of process or miscarriage of justice by exercising its power.

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In the case of S.W. Palankattkar & others Vs. State of Bihar, 2002 (44) ACC 168 , it has been held by the Hon'ble Apex Court that

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quashing of the criminal proceedings is an exception than a rule. The inherent powers of the High Court itself envisages three circumstances under which the inherent jurisdiction may be exercised:-(i) to give effect an order under the Code, (ii) to prevent abuse of the process of the court ; (iii) to otherwise secure the ends of justice. The power of High Court is very wide but should be exercised very cautiously to do real and substantial justice for which the court alone exists.

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For adjudicating the instant case, the facts as stated hereinabove are very relevant. Here, the Revision Petitioner has attempted to invoke the jurisdiction of this court.

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I am not in agreement that when the adjudication of a criminal offence has reached to the state of revisional level, there cannot be any compromise without permission of the court in all case including the offence punishable under 'N.I. Act' or the offence mentioned in Table-1 (one) can be compounded only if High Court or Court of Sessions grants permission for such purpose. The Court presently, concerned with an offence punishable under 'N.I. Act'.

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It is evident that the permissibility of the compounding of an offence is linked to the perceived seriousness of the offence and the nature of

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the remedy provided. On this point I can refer to the following extracts from an academic commentary [Cited from : K.N.C. Pillai, R.V. Kelkar's Criminal Procedure, 5th Edition :

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"17.2 - compounding of offences – A crime is essentially a wrong against the society and the State. Therefore, any compromise between the accused person and the individual victim of the crime should not absolve the accused from criminal responsibility. However, where the offences are essentially of a private nature and relatively not quite serious, the Code considers it expedient to recognize some of them as compoundable offences and some others as compoundable only with the permission of the court…"

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33. Section 147 of NI Act begins with a non obstante clause and such clause is being used in a provision to communicate that the provision shall prevail despite anything to the contrary in any other or different legal provisions. So, in light of the compass provided, a dispute in the nature of complaint under section 138 of N.I. Act, can be settled by way of compromise irrespective of any other legislation including Cr.P.C. In general and section 320 (1)(2) or (6) of the Cr.P.C. in particular. The scheme of section 320 Cr.P.C. deals mainly with procedural aspects; but it simultaneously crystallizes certain enforceable rights and obligation.

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Hence, this provision has an element of substantive legislation and therefore, it can be said that the scheme of section 320 does not lay down

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only procedure; but still, the status of the scheme remains under a general law of procedure and as per the accepted proposition of law, the special law would prevail over general law. For the sake of convenience, I would like to quote the observations of Hon'ble the Apex Court in the

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case of Municipal Corporation, Indore vs. Ratnaprabha reported in (AIR 1977 SC 308) which reads as under :

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"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 let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permissible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act, 1961. This view will, in our opinion, give proper effect to the non-

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obstante clause in clause (b) with due regard to its other provision that the letting value should be "reasonable"

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The expression 'special law' means a provision of law, which is not applicable generally but which applies to a particular or specific subject or

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class of subjects. Section 41 of Indian Penal Code stands on the same footing and defines the phrase special law. In this connection I would like to quote the well accepted proposition of law emerging from various observations made by the Hon'ble Apex Court in different decisions as a gist of the principle and it can be summarised as under:

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"When a special law or a statute is applicable to a particular subject, then the same would prevail over a general law with regard to the very subject, is the accepted principle in the field of interpretation of statute."

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35 . In reference to offence under section 138 of N.I. Act read with section 147 of the said Act, the parties are at liberty to compound the matter at any stage even after the dismissal of the revision/appeal. Even a convict undergoing imprisonment with the liability to pay the amount of fine imposed by the court and/or under an obligation to pay the amount of compensation if awarded, as per the scheme of N.I. Act, can compound the matter. The complainant i.e. person or persons affected can pray to the court that the accused, on compounding of the offence may be

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released by invoking jurisdiction of this court. If the parties are asked to approach the Apex Court then, what will be situation, is a question which is required to be considered in the background of another accepted progressive and pragmatic principle accepted by our courts that if possible, the parties should be provided justice at the door step. The phrase "justice at the door step" has taken the court to think and reach to a conclusion that it can be considered and looked into as one of such special circumstances for the purpose of compounding the offence under section 147 of the N. I. Act.

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It is also well settled that the operation or effect of a general Act may be curtailed by special Act even if a general Act contains a non obstante clause. But here is not a case where the language of section 320 Cr.P.C. would come in the way in recording the compromise or in compounding the offence punishable under section 138 of the N.I. Act. On the contrary provisions of section 147 of N.I. Act though starts with a non obstante clause, is an affirmative enactment and this is possible to infer from the scheme that has overriding effect on the intention of legislature reflected in section 320 Cr.P.C.

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Merely because the litigation has reached to a revisional stage or

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that even beyond that stage, the nature and character of the offence would not

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change automatically and it would be wrong to hold that at revisional stage,

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the nature of offence punishable under Section 138 of the N.I. Act should be treated as if the same is falling under table-II of Section 320 IPC. I would like

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to reproduce some part of the statement of objects and reasons of the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002

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"The Negotiable Instrument Act 1881 was amended by the Banking,Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instrument Act, 1981, namely Section 138 to 142 in ChapterXVII have been found deficient in dealing with dishonour of cheques. Notonly the punishment provided in the Act has proved to be inadequate, theprocedure prescribed for the courts to deal with such matters has beenfound to be cumbersome. The Courts are unable to dispose of such casesexpeditiously in a time bound manner in view of the procedure contained in the Act.

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2. A large number of cases are reported to be pending under Sections 138 and 142 of the Negotiable Instruments Act in various courts in the country. Keeping in view the large number of complaints under the saidAct, pending in various courts, a Working Group was constituted to review Section 138 of the Negotiable Instruments Act, 181 and make recommendations as to what changes were needed to effectively achieve the purpose of that Section.

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3. ..........…

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4. Keeping in view the recommendations of the Standing

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Committee on

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finance and other R/SCR.A/2491/2018 ORDER representations, it has

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been decided to bring out, inter alia the following amendments in the

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Negotiable Instrument Act 1881, namely.

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(i) xxxxxx

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(ii) xxxxxx

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(iii) xxxxxx

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(iv) to prescribe procedure for dispensing with preliminary evidence of the complainant.

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(v) xxxxxx

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(vi) xxxxx

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(vii) to make the offences under the Act compoundable. .....…

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5. xxxxxx

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6. The Bill seeks to achieve the above objects."

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In a commentary the following observations have been made with regard to offence punishable under section 138 of the N.I. Act. [ Cited from :

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Arun Mohan, Some thoughts towards law reforms on the topic of Section 138

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Negotiable Instrument Act -Tackling an avalanche of cases] :

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"... ... Unlike that for other forms of crime, the punishment here (in so far as the complainant is concerned) is not a means of seeking retribution,but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque. If we were to examine the number of complaints filed which were 'compromised' or 'settled' before the final judgment on one side and the cases which proceeded to

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judgment and conviction on the other, we will find that the bulk was settled and only a miniscule number continued."

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It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect.

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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, i.e., Negotiable Instruments (Amendment & Miscellaneous Provisions Act 2002 leads this Court to a conclusion that the offence made punishable under Section 138 of N.I. Act is not only an offence qua property but it is also of the nature of an economic offence, though not covered in the list of statutes enacted in reference to Section 468 of Cr.P.C. Thus, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage even after the dismissal of the proceedings.

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In the instant case, the problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute, furthermore, the arguments on behalf of the Govt. Advocate (crl.side) on the fact that unlike Section 320 Cr.P.C., Section 147 of the Negotiable

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Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court.

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I am also conscious of the view that judicial endorsement of the above quoted guidelines as given in the case of Damodar S. Prabhu (supra) could be seen as an act of judicial law making and therefore an intrusion into the legislative domain. It must be kept in mind that Section 147 of the Act does not carry any guidance on how to proceed with the compounding of offences under the Act. I have already explained that the scheme contemplated under Section 320 of the Cr.P.C. cannot be followed in the strict sense.

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In view of the aforesaid discussion, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage. The complainant i.e. the person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking inherent jurisdiction of this Court.

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Generally, the powers available would not have been exercised when a statutory remedy under the law is available, however, considering the

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peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to the court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties.

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As discussed above, the court is inclined to hold accordingly only because there is no formal embargo in section 147 of the N.I. Act. This principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under section 138 of the N.I. Act is distinctly different from the normal offences made punishable under Chapter XVII of IPC (i.e. the offences qua property).

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In view of the observations and in view of the guidelines as laid down in the case of Damodar S. Prabhu (Supra) and also in view of the observations made in the judgment referred above and taking into account the fact that the parties have settled the dispute amicably by way of compromise, this Court is of the view that the compounding of the offence as required to be permitted.

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Accordingly, the present Criminal Revision Case is disposed of in terms of Memorandum of Compromise arrived at between the parties to this

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litigation out of Court. The impugned conviction and sentence passed in Crl.A.No.77 of 2020 dated 04.10.2021 by the learned XXI Additional Sessions Judge, Chennai, confirming the conviction and sentence made in C.C.No.883 of 2009, dated 02.11.2019 by the learned XX Metropolitan Magistrate, Allikulam, Chennai are hereby modified . The conviction and sentence under section 138 of the Negotiable Instruments Act in C.C.No.883 of 2009 stands anulled as this Court intends, otherwise to secure the ends of justice. The Revision Petitioner shall be treated as acquitted on account of compounding of the offence with the complainant/person affected.

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48 . While disposing of this Criminal Revision Case by recording the Joint Memorandum of Compromise entered into between the parties, the learned counsel for the Revision Petitioner submitted that while suspending the sentence imposed on the petitioner by this court in Crl.M.P.No.12832 and 12833 of 2021 in Crl.RC.No.947 of 2021, as per the direction issued by this Court, the revision petitioner had deposited 50% of the cheque amount namely Rs.2,80,044.50/- before the trial court and the rial court was directed to redeposit the said amount in a fixed deposit account in any nationalised bank in order to get accrued interest.

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Therefore he requests this Court to grant permission to the respondent to withdraw the entire sum of Rs.2,80,044.50/- lying in the credit

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of C.C.No.883 of 2009 before the trial court and a direction may be issued to that effect.

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In view of the above, the respondent is permitted to withdraw Rs.2,80,044.50p (Rupees two lakhs and eighty thousand and fourty four and 50 paise only) which was already deposited by the Revision Petitioner along with accrued interest thereon, from the trial court within a period of four weeks from the date of receipt of a certified copy of this order along with appropriate application

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Office is directed to communicate this order to the learned trial

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court concerned immediately.

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In the result,

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The Criminal Revision Case is disposed of in terms of Settlement Agreement dated 16.02.2023.

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The impugned conviction and sentence passed in C.A.No.77 of 2020 dated 04.10.2021 by the learned XXI Additional Sessions Judge,

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Chennai, confirming the conviction and sentence made in C.C.No.883 of 2009, dated 02.11.2019 by the learned XX Metropolitan Magistrate, Allikulam Complex, Chennai are hereby modified.

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The conviction and sentence imposed on the Revision Petitioner by both the courts below stands anulled .

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The Revision Petitioner shall be treated as acquitted on account of compounding of the offence with the complainant/respondent.

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The respondent – M/s.Kimberley Petro Pump, by its Sole Proprietor Firm is permitted to withdraw Rs.2,80,044.50 paise already deposited by the Revision Petitioner before the trial court in C.C.No.883 of 2009 along with accrued interest, if any, within a period of four weeks from the date of receipt of a certified copy of this order on making appropriate application before the trial court.

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22.01.2025

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msr Index:yes/no Internet: Reportable

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