Allowed

Padma Lochan Mohanty v. State of Odisha

Orissa HC5 Nov 2021CRLREV/912/2018

Case brief

AI extract

What is this about?

The High Court allowed the criminal revision and set aside the conviction and sentence of the petitioner for cheque dishonour. The court recognized that despite the Supreme Court's guidelines on costs for delayed compounding, the specific facts allowed for an administrative fine in interest of justice, dismissing the dispute after payment.

What did the court decide?

The conviction and sentence were set aside; the offence was compounded by imposing a cost of Rs. 5,000/- payable to the High Court Bar Association.

Padma Lochan Mohanty Vs State of Odisha — Cheque Dishonour | Orissa HC (2021)

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AFR

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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CRLREV No.912 of 2018

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From the judgment dated 24.9.2018 passed by the learned 2^nd Addl. Sessions Judge, Khurda in Criminal Appeal No.16 of 2014 in confirming the judgment of conviction dated 06.3.2014 passed by the learned S.D.J.M., Khurda in I.C.C. No.37 of 2013 (Trial No.331/2013).

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Padma Lochan Mohantyh …. Petitioner
-versus-
1.State of Orissa …. Opp. Parties
2.Chitta Ranjan Panigrahi
Advocates appeared in this case through Hybrid Mode :
For Petitioner : Mr.P.C.Jena, Advocate
For Opp. Parties : Mr. Karunakar Nayak,
Addl. Standing Counsel
(for O.P. No.1)
Mr. Abhijit Mohanty, Advocate
(for O.P. No.2)
CORAM:
JUSTICE SAVITRI RATHO

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.……………………………………………………………………… Date of hearing : 05.11.2021 : Date of Judgment : 05.11.2021

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………………………………………………………………………..

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Savitri Ratho, J. The petitioner has been convicted for commission of

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offence punishable under Section 138 of the Negotiable Instruments

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Act (in short “N.I. Act”) by judgment dated 06.03.2014 passed in I.C.C. No.37 of 2013 (Trial No.331/2013) by the learned S.D.J.M.,

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CRLREV No.912 of 2018

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Khurda and sentenced to undergo simple imprisonment for one year and to pay a compensation of Rs.3,00,000/- (Rupees three lakhs only) to the complainant. This has been confirmed by judgment and order dated 24.9.2018 passed by the learned 2^nd Addl. Sessions Judge, Khurda in Criminal Appeal No. 16 of 2014.

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2. A joint compromise affidavit has been filed by the petitioner and opp. party No.2 which is at “Flag-A” At paragraph-2 of the affidavit , it has been stated that the parties have decided that the complainant (opp. party No.2) upon receiving an amount of Rs.1,50,000/- will not proceed with the case and he has no objection if the entire judgment of conviction and sentence will be compounded or set aside by this Court, at all. At paragraph-3 of the said affidavit, it has been stated that pursuant to such settlement, the complainant (opp. party No.2) has already received Rs.50,000/from the petitioner and rest amount of Rs.1,00,000/- has been received by way of a draft bearing No.385241 drawn on SBI, BJB College Branch, Bhubaneswar. Both parties have prayed to compound or set aside the judgment of conviction and sentence imposed under Section 138 of N.I. Act.

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3. Mr.P.C.Jena, learned counsel for the petitioner submits that

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as the offence under Section – 138 of the N.I. Act is compoundable

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CRLREV No.912 of 2018

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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 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. Abhijit Mohanty, learned counsel for opp. party No.2 confirms that the dispute has been settled between the parties and the petitioner has paid the entire compensation amount to the opp. party No 2-complainant , for which he has no objection if the case is

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disposed of in terms of the said settlement.

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5. Section 147 of the N.I. Act provides that every offence

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punishable under the Act, notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), shall be compoundable.”

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6. The Hon’ble Supreme Court in the case of K.M.Ibrahim (supra) after referring to its earlier decisions has held as follows:

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CRLREV No.912 of 2018

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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

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settlement when the appeal was pending before the Hon’ble

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Supreme Court. The Court allowed the parties to compound the

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offence under Section 138 of N.I. Act in view of the settlement

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arrived between them.

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CRLREV No.912 of 2018

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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

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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

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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 which has been confirmed in appeal by the learned Adhoc Addl. Sessions Judge (F.T.C.-3), Bhubaneswar.

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7. However the Hon’ble Supreme Court in the case of Damodar

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S.Prabhu v. Sayed Babalal H , reported in (2010) 5 SCC 663 has accepted the submissions of the learned Attorney General of India 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

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only results in the system being burdened but the complainant is

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also deprived of effective justice ”, and framed certain guidelines

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CRLREV No.912 of 2018

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regarding the cost to be imposed for compounding at different stages, if the settlement is entered into after conviction. The Hon’ble Court has held as follows :

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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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CRLREV No.912 of 2018

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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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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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8. Relying on these decisions , this court in Criminal Revision No 304 of 2021 (Khirod Kumar Sahu vs State and another )

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CRLREV No.912 of 2018

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disposed of on 02.11.2021, has allowed the case to be compounded after imposing a cost on the petitioner and set aside the conviction and sentence of the accused petitioner.

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9. In the present case, the parties have settled the matter during

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pendency of this Criminal Revision in this Court. Hence as per the 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 parties have settled the matter amongst themselves before the case was taken up for hearing, I feel imposition of Rs.5,000/- (Rupees Five Thousand only) on the petitioner as cost for compounding the offence, 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 by the petitioner.

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10. That as the matter has been settled between the parties and

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the compensation amount has been paid to the complainant–Opp

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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.3,00,000/- imposed by the learned

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CRLREV No.912 of 2018

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S.D.J.M., Khurda which has been confirmed by the learned 2^nd

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Addl. Sessions Judge, Khurda in Criminal Appeal No.16 of 2014.

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11. The CRLREV is accordingly allowed.

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L.C.R. be sent back forthwith.