Nohar Sonwani v. Radheshayam Markandey

Mr. Avinash Chand Sahu, Advocate Mr. Sunder Lal Sahu, Advocate Hon'ble Shri Justice Parth Prateem Sahu Order On Board 04/09/2025

1. Applicant has filed this revision petition challenging the legality, propriety and correctness of the impugned judgment dated

04.08.2021, passed in Criminal Appeal No.77/2019, by which learned First Additional Sessions Judge, Balod, District – Balod has maintained the judgment of conviction and order of sentence dated

15.11.2019, passed in Complaint Case No. 25/2019, whereby the Court of Judicial Magistrate First Class, Gunderdehi, District – Balod convicted applicant for the offence punishable U/s. 138 of the BALRAM PRASAD DEWANGAN Digitally signed by BALRAM PRASAD DEWANGAN 11:02:12 +0530 2 Negotiable Instrument Act, 1881 (In short ‘the Act of 1881’) and sentenced him with imprisonment till rising of the Court and awarded compensation of Rs.3,01,000/- as per Section 357 (1)(b) of Cr.P.C. with default stipulation.

2. During pendency of this revision petition, both petitioner and respondent have appeared before the Court through their learned counsel and submits that parties have settled their dispute and respondent has accepted a sum of Rs.1,69,000/- as full and final settlement against the cheque of Rs.2,50,000/- as also against compensation of Rs.3,01,000/- awarded by learned trial Court U/s. 357 (1) (b) of Cr.P.C. They also submits that they have filed an application under Section 147 of the Act of 1881 seeking permission of this Court to compound the offence.

3. Complainant/respondent is present before this Court and submitted that he has received the amount as agreed between the parties.

4. Provisions U/s. 147 of the Act of 1881 deals with offences to be compoundable and reads as under :- “147. Offences to be compoundable. — Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.”

5. Hon’ble Supreme Court in case of Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560 while dealing with the issue has observed as under :- “7. This Court has noted that the object of the statute was to facilitate smooth functioning of business 3 transactions. The provision is necessary as in many transactions cheques were issued merely as a device to defraud the creditors. Dishonour of cheque causes incalculable loss, injury and inconvenience to the payee and credibility of business transactions suffers a setback. At the same time, it was also noted that nature of offence under Section 138 primarily related to a civil wrong and the 2002 Amendment specifically made it compoundable. …...”

18.2. 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.

18.3. 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.”

6. Hon’ble Supreme Court further in case of P. Mohanraj & Ors. Vs. Shah Brothers Ispat Private Limited, reported in (2021) 6 SCC 258, has observed as under :- “50. By an Amendment Act of 2002, various other sections were added to this Chapter. Thus, under Section 143, it is lawful for a Magistrate to pass a sentence of imprisonment for a term not exceeding one year and a fine exceeding INR 5,000/- summarily. This provision is again an important pointer to the fact that the payment of compensation is at the heart of the provision in that a fine exceeding INR 5000/-, the sky 4 being the limit, can be imposed by way of a summary trial which, after application of Section 357 of the CrPC, results in compensating the victim up to twice the amount of the bounced cheque. Under Section 144, the mode of service of summons is done as in civil cases, eschewing the mode contained in Sections 62 to 64 of the CrPC. Likewise, under Section 145, evidence is to be given by the complainant on affidavit, as it is given in civil proceedings, notwithstanding anything contained in the CrPC. Most importantly, by Section 147, offences under this Act are compoundable without any intervention of the court, as is required by Section 320(2) of the CrPC.”

7. Hon’ble Supreme Court in case of B.V. Seshaiah Vs. State of Telangana & Anr., reported in (2023) 18 SCC 512, reiterating the decision in case of M/s Meters and Instruments Private Limited (supra) has held as under :- “8. In such a circumstance, the Appellants cannot be convicted on the basis of the orders passed by the courts below, as the settlement is nothing but a compounding of the offence.

9. In the case of M/S Meters and Instruments Private Limited & Anr. Vs Kanchan Mehta, reported in (2018) 1 SCC 560, this court held that the nature of offence under section 138 of the N.I Act is primarily related to a civil wrong and has been specifically made a compoundable offence. The relevant paragraph of the judgment has been extracted herein: “This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions’ cheques were issued merely as a 5 device to defraud the creditors. Dishonor of cheque causes incalculable loss, injury and inconvenience to the payee and credibility of business transactions suffers a set back. At the same time, it was also noted that nature of offence under Section 138 primarily related to a civil wrong and the 2002 amendment specifically made it compoundable.”

11. This is a very clear case of the parties entering into an agreement and compounding the offence to save themselves from the process of litigation. When such a step has been taken by the parties, and the law very clearly allows them to do the same, the High Court then cannot override such compounding and impose its will.”

8. Considering the submission of learned counsel for respective parties, the provisions of the Act of 1881 and principles laid down by the Hon’ble Supreme Court in the above referred decisions, the application filed U/s. 147 of the Act of 1881 is allowed. The parties are permitted to compound the offence for which applicant has been convicted in the present case. Consequently, the judgment and order of conviction and sentence passed by the Appellate Court as well as by Trial Court are set-aside and applicant is acquitted of the offence punishable under Section 138 of the Act of 1881. Sd/- (Parth Prateem Sahu) Judge Balram