Compounding of offence u/s 138 of Negotiable Instruments Act, 1881 not permissible except with the complainant’s consent: Punjab and Haryana High Court
It appeared that the petitioners are not legally sustainable. Under Section 147 of the NI Act, the offence under Section 138 of the Negotiable Instruments Act can be compounded at any stage. However, the Hon’ble Supreme Court laid down a graded scale of costs to be paid by the party applying for compounding concerning the stage of proceedings at which the compounding has sought the compounding. Beyond that, this judgment has no significance; so far as the question of consent of the complainant for compounding is concerned held by Hon’ble Justice Rajbir Sehrawat in M/s Anant Tools (Unit No. II) Pvt. Ltd. and others versus M/s Anant Tools Pvt. Ltd., Jalandhar [CRM-M-17300 of 2017 (O&amp;M)]. The facts leading to this case relate to the respondent – M/s Anant Tools Pvt. Limited filed complaint against the present petitioners, M/s Anant Tools Pvt. Limited, and its Directors. The allegations in the complaint are that earlier, the complainant and the accused had common business and were initially running a joint business. After that, the business was separated by the two. As a result, the assets, rights and liabilities were divided between the parties. An amount of Rs.18,52,253/- was required to be paid by the accused No.1 to the complainant due to the above-said settlement, as involved in one complaint. There are other amounts also, which are involved in two other complaints. For discharge of the above-said liability, the petitioners had issued a cheque dated 08.01.2009 for the above-said amount of Rs.18, 52,253/-. For the amounts involved in other complaints, two other cheques were also issued. However, on being presented, the cheques were dishonoured by the Bank. Then notices were issued to the accused of dishonour of all the three cheques, as involved in three complaints. Despite the notices, the amounts were not paid by the petitioners. This resulted in complaints being filed against the petitioners under Section 138 of the Negotiable Instruments Act. The summoning orders were issued against the present petitioners in all three complaints. During the pendency of the above-said complaints against the petitioners, they filed applications for the compounding of the offences in all three complaints. However, since the complainant had not agreed. Compounding the offences, the trial Court dismissed the applications moved by the petitioners in all three complaints. The petitioner’s counsel stated that after the summons was issued against the petitioner, they had also lodged an FIR against the complainant. As an attempt for compromising the entire matter, the complainant had agreed to the quashing of the complaints at the stage when the complaints had applied to seeking anticipatory bail; in the FIR case lodged by the petitioner. However, after that, the complainant got dishonest, and the complainant tried to get out of the agreement between the parties. Hence, the petitioners moved the above-said applications for compounding by attaching the drafts for the amounts of cheque involved in the complaint, with the further undertaking to pay any more reasonable amount deemed appropriate by the Court. But these applications have been dismissed by the trial Court.
IN THE HIGH COURT OF PUNJAB AND HARYANA Date of Decision:20.09.2018 CRM M 173017Pvt. Ltd. and others .....Petitioners M s Anant Tools Pvt. Ltd. Jalandhar .....Respondent CRM M 173517Pvt. Ltd. and others ....Petitioners Swatantar Kumar Chopra .....Respondent CRM M 173517Pvt. Ltd. and others .....Petitioners M s Anant Tools Pvt. Ltd. Jalandhar .....Respondent CORAM: HON BLE MR. JUSTICE RAJBIR SEHRAWAT Present: Mr. M.L. Saggar Senior Advocate with Mr. Abhilaksh Grover Advocate for the Mr. Vikram Chaudhri Senior Advocate with Ms. Ishal Goyal Advocate for the Rajbir Sehrawat J.(Oral This order shall dispose of three petitions i.e. CRM M 173017 M s Anant ToolsPvt. Ltd. and others Vs. Anant Tools Pvt. Ltd. Jalandhar CRM M 173517 M s Anant ToolsPvt. Ltd. and others Vs. Anant Tools Pvt. Ltd. Jalandhar involving identical facts but involving different cheques and thus resulting in three different complaints and three different CRM M 173017and 2 Broadly outlined the facts of this case are that the respondent M s Anant Tools Pvt. Limited filed complaint against the present petitioners which is incidentally having a little bit similar name i.e. M s Anant Tools Unit No.II) Pvt. Limited and its Directors. The allegations in the complaint are that earlier the complainant and the accused had common business and were initially running a joint business. However thereafter the business was separated by the two. As a result the assets rights and liabilities were divided between the parties. An amount of Rs.18 52 253 was required to be paid by the accused No.1 to the complainant as a result of the above said settlement as involved in one complaint. There are other amounts also which are involved in two other complaints. For discharge of the above said liability the petitioners had issued cheque dated 08.01.2009 for the above said amount of Rs.18 52 253 . For the amounts involved in other complaints two other cheques were also issued. However on being presented the cheques were dishonored by the Bank. Resultantly notices were issued to the petitioners accused on account of dishonor of all the three cheques as involved in three complaints. Despite the notices the amounts were not paid by the petitioners. This resulted into complaints being filed against the petitioners under Section 138 of Negotiable Instruments Act. The summoning orders were issued against the present petitioners in all the three complaints During the pendency of the above said complaints against the petitioners they filed applications for compounding of the offences in all the three complaints. However since the complainant had not agreed for CRM M 173017and 3 compounding the offences therefore the trial Court dismissed the applications moved by the petitioners in all the three complaints Challenging that order passed by the trial Court as well as seeking quashing of the complaint and the summoning order the present petitions have been filed Counsel for the petitioners has contended that after the summons were issued against the present petitioners in the complaints then they had also got lodged an FIR against the complainant. As an attempt for compromising the entire matter the complainant had agreed for quashing of the complaints at the stage when the complaints had filed application for seeking anticipatory bail in the FIR case lodged by the petitioner However thereafter the complainant got dishonest and the complainant tried to get out of the agreement arrived at between the parties. Hence the petitioners moved the abovesaid applications for compounding by attaching the drafts for the amounts of cheque involved in the complaint with further undertaking to pay anymore reasonable amount deemed appropriate by the Court. But these applications have been dismissed by the trial Court. It is further contended by the counsel that as per the law laid down by the Hon ble Supreme Court in 2010(5) SCC 663 Damodar S. Prabhu v Sayed Babalal H. and another judgment rendered in 2017(4) RCR Criminal) 476 M s Meters and Instruments Private Limited and Another v. Kanchan Mehta the consent of the complainant is not required for compounding the offence under Section 138 of Negotiable Instruments Act. Counsel has referred to the judgment of the Hon ble Supreme Court in Damodar S. Prabhu s caseto contend that provisions of Section CRM M 173017and 4 320 Cr.P.C which requires consent of complainant have been held to be non applicable in case of compounding of the offence under Section 138 of NI Act due to use of non obstante clause in Section 147 of NI Act. While referring to the judgment rendered in M s Meters and Instruments Private Limited s casecounsel has submitted that this judgment has specifically dealt with the issue of consent of the complainant for the purpose of compounding and has held that the Court can permit compounding of the offence irrespective of or in absence of the consent of the complainant as well. Counsel for the petitioner further contends that pursuant to the earlier agreement arrived at between the parties the petitioners had already given their consent for quashing of the FIR No.31 dated 06.02.2010 registered under Sections 420 406 465 467 468 471 120 B IPCat Police Station Division No.4 Jalandhar which was lodged against the complainant. However now the complainant has resiled from his part of the compromise. Through this modality the complainant has tried to take the undue advantage of the Court proceedings On the other hand learned counsel for the complainant respondent has argued that it is not disputed that the complainant had filed the three complaints prior in time. Thereafter as a counter blast the present petitioners had also got lodged the above said FIR against the complainant in the year 2010. At the stage of seeking anticipatory bail the parties had arrived at a compromise on 19.03.2010. Under that compromise the parties were to withdraw get quashed all the criminal proceedings against each other. The present petitioners were to pay Rs.12 lakhs to the complainant In compliance of the compromise the complainant had withdrawn the three CRM M 173017and 5 complaints against the present petitioners. However the present petitioners neither paid Rs.12 lakhs to him nor got the FIR against the complainant quashed in compliance of the compromise arrived at between the parties This led to filing of three petitions by the present complainant before this Court earlier i.e. CRM M 144211 Swatantar Kumar Chopra Vs M s Anant ToolsPvt. Ltd. and others CRM M 205211 M s Anant Tools Pvt. Ltd. Vs. M s Anant Tools Pvt. Ltd. and others CRM M 205211 M s Anant Tools Pvt. Ltd. Vs. M s Anant ToolsPvt. Ltd. and others After hearing both the sides this Court had found that the compromise between the parties had finally broken down. As a result this Court had passed order dated 05.08.2014 separately in those three petitions holding that the agreement between the parties is declared to be rescinded and the parties would be at liberty to prosecute their criminal proceedings against each other. Accordingly it is contended by counsel for the respondent that there was no more any compromise between the parties and this Court had granted liberty to the parties to prosecute their respective cases. Hence the earlier compromise cannot be referred to by the petitioners for any purpose for compounding of the offences or for quashing of the complaints As reply to the judgments cited by counsel for the petitioners the counsel for the respondents has submitted that the Hon ble Supreme Court in Damodar S. Prabhu s casehas not been decided upon the issue involved in the present case i.e. whether the compounding can be permitted by the Court even in absence of the consent of the complainant CRM M 173017and 6 It is contended by the counsel that consent of the complainant injured in a criminal case is a sine qua non for compounding of the offences. While referring to the above said case of Damodar S. Prabhu s casethe counsel has contended that although this judgment has dealt with the Section 147 of Negotiable Instruments Act which uses a non obstante clause and has considered its effect vis a vis Section 320 of Cr.P.C. however this judgment has not specifically explored the applicability of Section 320 of Cr.P.C qua the consent of the complainant in case of compounding of offence under Section 138 of NI Act. It is further contended by the counsel that this aspect was specifically considered and decided by the Hon ble Supreme Court in 2012(1) R.C.R.822 JIK Industries Limited and Others v. Amarlal V. Jumani and Another In this case the Hon ble Supreme Court has categorically explained that although in the earlier judgment rendered in Damodar S. Prabhu s case supra) the question of exclusion of Section 320 Cr.P.C in cases relating to compounding of offences under Section 138 of NI Act due to Section 147 of NI Act has been considered yet the applicability of Section 320 Cr.P.C for the purpose of consent of the compounding party has not been decided by the Court. It is contended by the counsel that the judgment in JIK Industries Limited s casehas considered the scope of the non obstante clause used in Section 147 of NI Act in great details and has ultimately held that despite the earlier judgment rendered in Damodar S Prabhu s casethe proceedings under Section 138 of Negotiable Instruments Act cannot be compounded except with the consent of the CRM M 173017and 7 Having heard learned counsel for the parties this Court finds that the arguments raised by the learned counsel for the petitioners are not legally sustainable. So far as the compromise between the parties under which the petitioner can take recourse is concerned the same has already been held to be finally revoked by this Court with further liberty to the respective parties to prosecute their criminal cases against each other Therefore by any means it would not have been possible for the trial Court to give effect to any kind of agreement compromise or consent on the part of the complainant on its own. Hence the only question which the trial Court could have considered is whether the application filed by the petitioner for compounding of the offence under Section 138 of Negotiable Instruments Act would have been allowed even without consent of the complainant. The trial Court has rightly rejected the application for compounding moved by the petitioners for the lack of necessary consent from the complainant. This Court does not find any illegality or infirmity in the order passed by the trial Court So far as judgments cited by the learned counsel for the petitioner are concerned this Court finds substance in the argument of the learned counsel for the respondents that the judgment of the Hon ble Supreme Court rendered in Damodar S. Prabhu s casedoes not specifically deal with the issue of compounding of an offence under Section 138 of Negotiable Instruments Act in absence of consent of the complainant. This judgment primarily proceeds on the assumption that in the facts of that particular case there was a consent between the parties The dispute in that case was only regarding the stage at which the parties CRM M 173017and 8 can appropriately be permitted to compound the offence under Section 138 of Negotiable Instruments Act. Although the Hon ble Supreme Court held that even under Section 147 of NI Act the offence under Section 138 of Negotiable Instruments Act can be compounded at any stage however the Hon ble Supreme Court laid down a graded scale of costs to be paid by the party applying for compounding with reference to the stage of proceedings at which the compounding has been sought by the party. Beyond that this judgment has no significance so far as the question of consent of the complainant for compounding is concerned The above said judgment of the Supreme Court rendered in Damodar S. Prabhu s casehas specifically been considered by the subsequent Bench of Hon ble Supreme Court in case of JIK Industries Limited s the Hon ble Supreme Court in the case of JIK Industries Limited s has held that this judgment cannot be interpreted to mean that applicability of Section 320 Cr.P.C stands altogether obliterated due to use of non obstante clause in Section 147 of the Negotiable Instruments Act. The Court in JIK Industries Limited s casealso held that the basic ingredients of Section 320 Cr.P.C do not stand excluded merely because of uses of non obstante clause in Section 147. It has been further held that the use of the non obstante clause in a statute has to be considered with reference to the context in which it has been used. Accordingly it has been held that the basic ingredient of compounding i.e. the consent of the other side the complainant in the present case cannot be dispensed with while considering any application CRM M 173017and 9 for compounding. This proposition qua compounding has been contrasted by the Hon ble Supreme Court in this judgment as against the proceedings where the quashing of a complaint is sought by the accused. The Supreme Court has held that quashing of a complaint stands on a different footing and it can be ordered even without the consent of the complainant However compounding is altogether a different concept and the same cannot be resorted to or applied by the Court except with the consent of the Although the counsel for the petitioners has rightly relied upon the subsequent judgment of the co ordinate Bench of the Hon ble Supreme Court rendered in M s Meters and Instruments Private Limited s case supra) however this Court finds that this judgment though has referred to the earlier judgment of the Supreme Court rendered in JIK Industries Limited s casehowever has neither overruled the same nor has taken a detailed discussion regarding the proposition which was specifically decided by the Hon ble Supreme Court in the case of JIK Industries Limited s caseRCR1009 National Insurance Company Limited v. Pranay Sethi and others. In this judgment the Hon ble Supreme Court has amply clarified that in case the subsequent Bench of equal strength does not intend to follow the earlier Bench of the CRM M 173017and 10 same strength then the appropriate course for the subsequent Bench is only to refer the matter to the larger Bench. It has further been clarified that in case this recourse is not adopted by the subsequent Bench then it is the judgment first in point of time which shall be a binding precedent on that point of law and not the subsequent judgment In view of this pronunciation of the law by the Constitutional Bench judgment of the Supreme Court in Pranay Sethi s casethis Court finds that it has to follow the judgment rendered by the Hon ble Supreme Court in case of JIK Industries Limited s casewhich mandated the content of the complainant for compounding of the offence under Section 138 of NI Act In the present case admittedly there is no consent for compounding on the part of the complainant therefore it was impermissible for the trial Court to permit compounding merely on unilateral application moved by the petitioner accused. Hence the trial Court has not committed any illegality by declining the application for compounding. So far as other relief prayed for in this petition qua quashing of complaint and summoning orders on merits of the case are concerned this Court does not find any factual or legal basis for those reliefs. Neither any serious arguments were addressed qua that aspect same are dismissed In view of the above finding no merit in these petitions the September 20 2018 ( RAJBIR SEHRAWAT JUDGE Whether Speaking reasoned Yes No Whether Reportable 