IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.49616 of 2007 JITENDRA KUMAR RAI Versus STATE OF BIHAR & ANR ----------- 3/ 27/2/2009 Heard learned counsel for the petitioner and learned counsel for the State. The petitioner questions the order of cognizance dated 1.10.2005 in Complaint Case No.268C/05 under Section-138 of N.I. Act. The submission on behalf of the petitioner, from annexure-2 is of an out-of-court settlement between the parties in pursuance of which the petitioner has also made certain payments against the dishonoured instrument. Section-138 of N.I. Act was incorporated to lend an element of stability and certainty to economic transactions and activities. In that view of the matter, to lend weightage to genuine settlement of economic disputes, out side the criminal law, by an amendment made to the N.I. Act in the year-2002 the offence under Section-138 of N.I. Act. has been made compoundable. Therefore, in a prosecution under Section- 138 of N.I. Act., if the value of the instrument is paid up, and an application is filed for compounding, the Court is required to consider the same not in the 2 perspective of the criminal law simpliciter under the provisions of the Indian Penal Code, but keeping in mind that the offence under Section-138 of N.I. Act. was basically an economic offence, given a criminal camouflage only to ensure stability and certainty in economic activities which is fulfilled no sooner that the value of the instrument is paid up. In 2004(8) S.C.C. 582 (MADAN MOHAN ABBOT VERSUS STATE OF PUNJAB) compounding in an offence under Section-406 of the Indian Penal Code was denied on the ground that the offence was not compoundable and the amount involved was more than Rs.250/-. The Apex Court at paragraph-6 observed as follows:- “6. We need to emphasize that it is, perhaps, advisable that in disputes where the question involved is of a purely personal nature, the Court should ordinarily accept the terms of the compromise even in criminal proceedings as keeping the matter alive with no possibility of a result in favour of the prosecution is a luxury which the courts, grossly overburdened as they are, cannot afford and that the time so saved can be utilized in deciding more effective and meaningful litigation. This is a common sense approach to the matter based on the ground of realities and bereft of the technicalities of the law.” The duty of the courts is to encourage such compounding applications when the legislature has desired so. This application is, therefore, disposed with 3 the aforesaid discussion that if an application for compounding is filed on behalf of the parties, the court below shall consider the same in accordance with law, in light of the aforesaid discussion and dispose it of without delay. KC ( Navin Sinha, J.)