Allowed

Khirod Kumar Sahu v. State of Odisha

Orissa HC2 Nov 2021CRLREV/304/2021

Case brief

AI extract

What is this about?

In a criminal revision, the High Court allowed the set-aside of a conviction and sentence under Section 138 of the N.I. Act following a post-acquittal compromise. The Court set aside the imprisonment, granted liberty to the petitioner in custody, allowed compounding subject to a nominal court fee, and remanded the matter for withdrawal of proceedings. The case applies Supreme Court guidelines on c

What did the court decide?

Conviction and sentence set aside; petitioner set at liberty forthwith; offence compounded on payment of Rs.1,000 to the High Court Bar Association Fund.

Khirod Kumar Sahu Vs State of Odisha — Cheque Dishonour | Orissa HC (2021)

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IN THE HIGH COURT OF ORISSA AT CUTTACK CRLREV No.304 of 2021

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From the judgment dated 18.3.2021 passed by the learned Sessions Judge, Angul in Criminal Appeal No.06 of 2014, confirming the judgment of conviction dated 28.2.2014 passed by the learned J.M.F.C., Angul in C.T. No.1229 of 2010/TR No.419 of 2012.

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Khirod Kumar Sahu …. Petitioner -versus1.State of Odisha 2.Sukanta Kumar Pradhan …. Opp. Parties

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Advocates appeared in this case through Hybrid Mode :

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For Petitioner : Mr. A.K.Nath, Advocate For Opp. Parties : Mr. Sibani Shankar Pradhan, Addl. Govt. Advocate (for O.P. No.1) Mr.A.K.Jena, Advocate (for O.P.No.2)

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CORAM: JUSTICE SAVITRI RATHO

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………………………………………………………………………. Date of hearing : 02.11.2021 : Date of Judgment :02.11.2021

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………………………………………………………………………..

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Savitri Ratho, J. The petitioner has been convicted for commission of offence punishable under Section 138 of the Negotiable Instruments Act ( in short “N.I. Act “) by judgment dated 28.2.2014 passed in C.T. No.1229/2010/Trial No.419 of 2012 (I.C.C. Case No.176 of

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by the learned J.M.F.C., Angul and sentenced to undergo

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simple imprisonment for one year and to pay a compensation of Rs.2,50,000/- (Rupees two lakhs fifty thousand only) to the complainant. This been confirmed by judgment and order dated 18.03.2021 by the learned Sessions Judge, Angul in Criminal Appeal No.6/2014.

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2. Perusal of the order dated 24.8.2021 passed in C.T. No.1229/2010 by the learned J.M.F.C.(I/C), Angul which has been annexed to this Criminal Revision as Annexure-3 reveals that the written acknowledgement had been filed by the complainant who was present in Court stating that he has received the full and final compensation amount from the petitioner. The prayer of the petitioner to set aside the order of conviction however was rejected as the sentence of simple imprisonment of one year had been confirmed by the learned Sessions Judge, Angul.

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3. Mr. A.K.Nath, learned counsel for the petitioner submits that

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the petitioner is in custody since more than two months. He further submits that the petitioner is a poor man but with great difficulty has

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paid the entire compensation amount to the complainant (Opp. Party No.2) and the dispute has been settled between the parties and the parties had filed a compromise petition before the learned J.M.F.C.

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Angul, but the same was rejected. He further submits that as the offence under Section – 138 of the N.I. Act is compoundable and the compounding can be done at any stage, the criminal revision may be allowed and disposed of in terms of the settlement and the conviction and sentence of the petitioner set aside. In support of his submission, he relies on the decisions of the Hon’ble Apex Court in the case of K.M.Ibrahim v. K.P.Mohammed and others reported in

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AIR 2010 SC 276:2010 (1) SCC 798 , V.I.Uthuppan v. Thankachan & another reported in 2012 (II) OLR (SC) 496 and this Court in the case of Debabrata Dash v. Malaya Bhowmick reported in 2011 (Supp.II) OLR 366 .

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4. Mr.A.K.Jena, learned counsel for opp. party No.2 confirms

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that the dispute has been settled between the parties and the accused petitioner has paid the entire compensation amount to the opp. party and he has no objection if the case is disposed of in terms of the said settlement.

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5. The copy of the compromise petition dated 23.08.2021 filed under Section 147 of the N.I. Act before the learned Magistrate has been filed by the learned counsel. It is stated in the petition that

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as the matter has been compromised and the complainant has received the claimed amount, the complainant does

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not want to proceed any more in the case. Prayer has been made in the said petition to set aside the conviction and punishment. The copy of the petition be kept in the record.

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6. Mr S.S. Pradhan learned Additional Govt. Advocate who had been requested to assist the Court, referring to the decision of the Hon’ble Apex court in the case of Meters and instruments Pvt. Ltd vs Kanchan Mehta reported in (2018) 1 SCC 560 and Damodar S.Prabhu v. Sayed Babalal H , reported in (2010) 5 SCC 663 submits that it is true that the offence under Section 138 of the N.I. Act is compoundable and the conviction imposed by the Courts can be set aside at any stage on basis of such compounding, but in view of the submission of learned Attorney General of India in the case of Damodar S Prabhu ( supra) that the “ requirement of deposit of

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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 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 ”, the Hon’ble Supreme Court has framed certain guidelines regarding

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the cost to be imposed for compounding at different stages, if the settlement is entered into after conviction.

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7. Section 147 of the N.I. Act provides that every offence punishable under the Act, notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), shall be compoundable.”

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8. The Hon’ble Supreme Court in the case of

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K.M.Ibrahim (supra) after referring to its earlier decisions has held as follows:

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…“ 9 . 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.

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10. xxx xxx xxx

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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.

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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

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Forum. However, 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.”…

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In the case of V.I.Uthuppan (supra) the parties arrived at a settlement when the appeal was pending before the Hon’ble Supreme Court. The Court allowed the parties to compound the offence under Section 138 of N.I. Act in view of the settlement arrived between them.

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In the case of Debabrata Dash (supra), this Court after referring to the judgment of the Hon’ble Supreme Court in K.M.Ibrahim (supra) relied on the memorandum filed by the complainant stating that he has received the defaulted amount in full and final settlement of the dispute and supported the prayer of the petitioner to allow the revision and set aside the order of conviction and sentence and compounded the offences arising out of the N.I. Act by virtue of Section 147 of the N.I. Act and set aside the order of conviction and sentence passed by the learned S.D.J.M., Bhubaneswar against the petitioner by the which has been confirmed in appeal by the learned Adhoc Addl. Sessions Judge (F.T.C.-3), Bhubaneswar.

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In the case of Damodar S Prabhu (supra) the Hon’ble Supreme Court the portions of the judgment relevant for the

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purpose of deciding this Criminal Revision are extracted below :

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“….21. 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 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:-

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THE GUIDELINES

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(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

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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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xxx xxx xxx 23. xxx xxx xxx 24. xxx xxx xxx

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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…”

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9. In the present case the parties have settled the matter after

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the judgment passed by the Appellate Court. Hence as per the

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guidelines framed by the Hon’ble Apex Court, the composition should be allowed by imposing cost of 15% of the dishonoured cheque value. But considering that fact that the petitioner has been taken into custody and has spent more than two months in judicial custody in the meanwhile, I feel imposition of cost of Rs.1,000/would be in the interest of justice. I am also of the view that the said cost should be deposited in High Court Bar Association Advocate’s Welfare Fund.

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In course of hearing when this amount was suggested to the counsel for the petitioner he has submitted that he will deposit the said amount and file the receipt in course of the day and has in fact filed the receipt.

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10. That as the matter has been settled between the parties and the compensation amount has been paid to the complainant–Opp party No.2, in full and final settlement of the dispute, I allow the compounding of the offence under Section -138 of the N.I.Act and set aside the conviction of the petitioner under Section 138 of N.I. Act and the sentence to undergo simple imprisonment for one year and to pay compensation of Rs.2,50,000/- imposed by the learned J.M.F.C., Angul which has been confirmed by the learned Sessions

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Judge, Angul in Criminal Appeal No.6/2014.

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The petitioner who is in custody shall be set at liberty

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forthwith.

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11. The CRLREV is accordingly allowed.