Ibrahim Vs. K.P. Mohammed & ANR.  INSC 1770 (2 December 2009)
APPELLATE JURISDICTION CRIMINAL APPEAL NO.2281 OF 2009 (Arising out of
S.L.P.(Crl.)No...9263/09 CRL.M.P.15423/2009) K.M. IBRAHIM ... APPELLANT
The appellant issued a cheque to the first respondent for an
amount of Rs.95,000/- in discharge of a legally enforceable debt. However, when
the cheque was presented by the first 2 respondent to his bank, the same was
dishonoured on account of insufficiency of funds in the account of the
appellant. The respondent thereupon issued statutory notice to the appellant
within the prescribed time limit informing the appellant about the dishonor of
the cheque and calling upon him to pay the amount due. Since the appellant
failed to pay the amount in time, the respondent filed a complaint before the
Chief Judicial Magistrate, Kasargode. Considering the evidence on record, the
Trial Court found the accused guilty of the offence with which he had been
charged and sentenced him to undergo rigorous imprisonment for a period of one
year and to pay a fine of Rs.1,05,000/-. In default of payment of fine, it was
ordered that the appellant would undergo rigorous imprisonment for a further
period of three months. If, however, the fine was realized, directions were
given that a sum of Rs.1,00,000/- should be given to the respondent by way of
Aggrieved by the said judgment, the appellant filed Criminal
Appeal No.74 of 2003. While affirming the conviction, the Appellate Court
reduced the sentence to a period of one month and a fine of Rs.95,000/-. In
default of said payment, the appellant was directed to undergo imprisonment for
a further period of two months.
The said order was challenged before the High Court, which decided
the matter in the light of Section 357(3) Cr.P.C. The High Court dismissed the
revision against which the present appeal has been filed.
At the very initial stage of hearing, a question was raised on
behalf of the appellant as to whether an offence under Section 138 of the Negotiable
Instruments Act, 1881, could be compounded under
Section 147 of the said Act read with Section 320 Cr.P.C.
Appearing for the appellant, Mr. Mukul Rohtagi, learned Senior
Advocate, contended that since a specific power had been given to the parties
to a proceeding under the Negotiable Instruments Act
under Section 147 to compound the offence, there could be no reason as to why
the same cannot be permitted even after conviction, which had been affirmed
upto the High Court. It was urged that in order to facilitate settlement of disputes,
the legislature thought it fit to insert Section 147 by Amending Act 55 of
2002. Such amendment came into effect from 6th February, 2003, and provided
that notwithstanding anything contained in the Code of Criminal Procedure,
1973, every offence punishable under the Act would be compoundable. Mr. Rohtagi
urged that in view of the non-obstante clause, the provisions of Section 147
were given an overriding effect over the Code and in view of the clear mandate
given to the parties to compound an offence 5 under the Act, reference to
Section 320 Cr.P.C. can be made for purposes of comparison only in order to
understand the scope of Section 147 of the Negotiable Instruments Act. Mr. Rohtagi submitted that the said position had been
accepted by this Court in various decisions, such as in the case of O.P.
Dholakia vs. State of Haryana & Anr. [(2000) 1 SCC 762], wherein it was
held that since the petitioner had already entered into a compromise with the
complainant and the complainant had appeared through counsel and stated that
the entire money had been received by him and he had no objection if the
conviction already recorded under Section 138 of the Negotiable
Instruments Act is set aside, the Hon'ble Judges
thought it appropriate to grant permission, in the peculiar facts and
circumstances of the case, to compound the offence. While doing so, this Court
also indicated that necessarily the conviction and sentence under Section 138
of the Act stood 6 annulled.
said view has been consistently followed in the case of (1) Anil Kumar Haritwal
& Anr. vs. Alka Gupta & Anr. [(2004) 4 SCC 366]; (2) B.C. Seshadri vs.
B.N. Suryanarayana Rao [2004 (11) SCC 510] decided by a three Judge Bench; (3)
G. Sivarajan vs. Little Flower Kuries & Enterprises Ltd. & Anr. [(2004
11 SCC 400]; (4) Kishore Kumar vs. J.K. Corporation Ltd. [(2004 13 SCC 494];
(5) Sailesh Shyam Parsekar vs. Baban [(2005 (4) SCC 162]; (6) K. Gyansagar vs.
Ganesh Gupta & Anr. [(2005) 7 SCC 54]; (7) K.J.B.L. Rama Reddy vs.
Annapurna Seeds & Anr. [(2005) 10 SCC 632]; (8) Sayeed Ishaque Menon vs.
Ansari Naseer Ahmed [(2005) 12 SCC 140]; (9) Vinay Devanna Nayak vs. Ryot Sewa
Sahakari Bank Ltd. [(2008) 2 SCC 305], wherein some of the earlier decisions
have been noticed; and (10) Sudheer Kumar vs. Manakkandi M.K. Kunhiraman &
Anr. [2008 (1) KLJ 203], which was a decision of a 7 Division Bench of the
Kerala High Court, wherein also the issue has been gone into in great detail.
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
The object of Section 320 Cr.P.C., which would not in the strict
sense of the term apply to a proceeding under the Negotiable
Instruments Act, 1881, gives the parties to the
proceedings an opportunity to compound offences mentioned in the table
contained in the said section, with or without the leave of the court, and also
vests the court with jurisdiction to allow such compromise.
of Sub-Section (8), the Legislature has taken one step further in vesting
jurisdiction in the Court to also acquit the accused/convict of the offence on
the same being allowed to be compounded.
as, it is with a similar object in mind that Section 147 has been inserted into
Instruments Act, 1881, by amendment, an analogy may
be drawn as to the intention of the Legislature as expressed in Section 320(8)
Cr.P.C., although, the same has not been expressly mentioned in the amended
section to a proceeding under Section 147 of the aforesaid Act.
Apart from the above, this Court is further empowered under
Article 142 of the Constitution to pass appropriate orders in line with
Sub-Section (8) of Section 320 Cr.P.C. in an application under Section 147 of
the aforesaid Act, in order to do justice to the parties.
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.
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 Forum. However, 10 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.
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.
Since the parties have settled their disputes, in keeping with the
spirit of Section 147 of the Act, we allow the parties to compound the offence,
set aside the judgment of the courts below and acquit the appellant of the
charges against him.
The appeal is, accordingly, allowed in the aforesaid terms.
.............................................J. (ALTAMAS KABIR)