Himachal Pradesh High Court: Anoop Chitkara, J., setting aside the conviction against the petitioner, discussed the effect of compromise between the parties in cases attracting Section 138 of Negotiable Instruments Act, 1881 and the cases of compounding of offence under the same.


The petitioner stands convicted under Section 138 of the Negotiable Instruments Act, 1881, vide order dated 26-07-2018 by the Additional Chief Judicial Magistrate, Shimla. Application under Section 389 Code of Criminal Procedure, 1973, was made by the petitioner before the Sessions Judge, which stands dismissed in default by order dated 07-01-2019. The petition hereby was moved invoking Inherent powers of the High Court under Section 482 Code of Criminal Procedure, 1973, against the said conviction. 


The Court reiterating the objective of the Negotiable Instruments Act, 1881, said, “The jurisprudence behind the N.I. Act is that the business transactions are honoured. The legislative intention is not to send the people to suffer incarceration because their cheque was bounced. These proceedings are simply to execute the recovery of cheque amount by showing teeth of penalty loss.”  Considering the peculiar facts of the present case and the power of Court to interfere in matters like such, the Court observed, “This Court has inherent powers under Section 482 of the Code of Criminal Procedure which are further supported by Section 147 of the N.I. Act to interfere in this kind of matter where parties have paid the entire money and where the complainant does not object to clear all the proceedings.” Reliance was placed on Shakuntala Sawhney v. Kaushalya Sawhney, (1980) 1 SCC 63, wherein the Supreme Court held, “The finest hour of Justice arise propitiously when parties, despite falling apart, bury the hatchet and weave a sense of fellowship or reunion.”  With respect to the compromise made and its effect over the FIR, the Court said, “(…) It is a fit case where the inherent jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure read with 147 of Negotiable Instruments Act, is invoked to compound the offence and consequently to quash the above-mentioned FIR and consequent proceedings” The Court further reproduced the guidelines as laid down by Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663, with respect to the compounding of offences under the Negotiable Instruments Act, 1881.


While setting aside the impugned order of conviction by the Additional Chief Judicial Magistrate, the Court directed the petitioner to be released from the prison with immediate effect.[Gaurav Sharma v. Ishwari Nand, 2020 SCC OnLine HP 2464, decided on 13-11-2020]

Sakshi Shukla, Editorial Assistant has up this story together

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