All HC | For offence of dishonour of cheques, what needs to be given priority – Compensatory aspect or Punitive aspect?

Allahabad High Court: Chandra Dhari Singh, J., expressed that,

Merely because the litigation has reached a revisional stage or that even beyond that stage, the nature and character of the offence would not change automatically and it would be wrong to hold that a revisional stage, the nature of offence punishable under Section 138 NI Act should be treated as if the same is falling under table-II of Section 320 IPC.

Petitioner and OP 2 had a business relationship during the course of business and had issued two cheques in favour of OP 2 and when he had deposited, the cheques were bounced due to insufficient funds.

OP 2 had filed a complaint case under Section 138 Negotiable Instruments Act, 1881. Trial Court had convicted the petitioner and further on being aggrieved the petitioner had preferred a criminal appeal.

Question for consideration

Whether an order passed by the High Court in the criminal revision petition confirming the conviction can be nullified by the High Court in a petition filed under Section 482 CrPC noticing subsequent compromise of the case by the contesting parties?

Analysis, Law and Decision

High Court stated that it is well stated that inherent powers under Section 482 CrPC can be exercised only when no other remedy is available to the litigant and not where a specific remedy is provided by the statute.

Inherent powers under Section 482 of CrPC include powers to quash FIR, investigation or any criminal proceedings pending before the High Court or any Courts subordinate to it and are of wide magnitude and ramification. Such powers can be exercised to secure ends of justice, prevent abuse of the process of any court and make such orders as may be necessary to give effect to any order under this Code, depending upon the facts of a given case.

 In the Supreme Court decision of Krishan v. Krishnaveni, (1997) 4 SCC 241, the Court 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 petitioner 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, the High Court may in its discretion prevent the abuse of process or miscarriage of justice by exercising jurisdiction under Section 482 of the Code.

Bench opined that it is not in agreement that when the adjudication of a criminal offence has reached the state of revisional level, there cannot be any compromise without permission of the Court in all cases including the offence punishable under Negotiable Instruments Act, 1881.

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 CrPC in general and Section 320 (1)(2) or (6) of the CrPC in particular. The scheme of Section 320 CrPC deals mainly with procedural aspects; but it simultaneously crystallizes certain enforceable rights and obligation.

Further, it is well settled that the operation or effect of a general Act may be curtailed by a special Act even if a general Act contains a non-obstante clause. But here is not a case where the language of Section 320 CrPC would come in the way of recording the compromise or in compounding the offence punishable under Section 138 of the N.I. Act.

In the present matter, the problem was with the tendency of litigants to belatedly choose compounding to resolve their dispute.

Section 147 NI Act does not carry any guidance on how to proceed with compounding of offences under the Act.

 Hence the Court held that offence under Section 138 NI Act read with Section 147 are at liberty to compound the matter at any stage.

“…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.”

Concluding the matter, High Court allowed the present petition under Section 482 CrPC is allowed in terms of the compromise arrived at between the parties to this litigation out of court. [Rishi Mohan Srivastava v. State of U.P., 2021 SCC OnLine All 532, decided on 13-08-2021]


Counsel for Applicant:- Naved Ali, Sandeep Yadav

Counsel for Opposite Party:- G.A., Pawan Bhaskar

One comment

  • Special Magistrate Courts dealing with NI, ACT cases u/s
    138 in Telengana State drag on for years. Generally Metropolitan Magistrate courts transfer cases to Spl Mag Courts.
    Cases are dragged on for some time ,which will be transferred to to different courts for some procedural delay. As the Spl Magt retires cases will be transferred to another court without filling vacancies ,and show goes on till they are transferred to the originating courts.In the originating courts for dealing the NI cases again Judges vacancies have to be filled up.
    The cases will be lying unattended till a Judge is appointed.
    Though NI, ACT is amended to pay 20% Cheque amt as compensation it is not taken care of and no case is decided within 6 months as per ACT.
    Not much importantance is
    given by courts as also State Govt.
    This is the Position in Telengana State.

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