IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA Cr.MMO No. 68 of 2010 Date of Decision: 12th August, 2010 __________________________________________________________ Kanwardeep Singh Sekhon ….Petitioner. Versus M/s Mukul & Company ….Respondent. ___________________________________________________________ Coram The Hon’ble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 No. __________________________________________________________ For the Petitioner: Mr. Bhupinder Gupta, Sr. Advocate with Mr. Neeraj Gupta, Advocate. For Respondent No.1: Mr. Nimish Gupta, Advocate. For Respondent No.2: Ms. Ruma Kaushik and Mr. R.K. Thakur, Addl. Advocate Generals. __________________________________________________________ Dev Darshan Sud, J (oral). The controversy in this case lies in a narrow compass. The petitioner is prosecuted for offences under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as ‘the Act’) on the allegations that one cheque amounting to Rs. 5,44,347/- issued by the petitioner was dishonored thereby attracting the consequence of criminal prosecution. 1 Whether Reporters of Local Papers may be allowed to see the judgment? Yes 2 2. Before the learned trial Court at the very initial stage, the petitioner moved an application for dismissal of complaint in which the following allegations were made: “2. That the complainant through their counsel Shri A.S. Shah and C.D.S. Shah, Advocate, received whole of the cheque amount as agreed between the parties on behalf of the complainant in knowledge of the S.P.A. of complainant, who has been appearing in the present proceedings on behalf of the complainant. Although, the accused was not liable to pay the cheque amount to the complainant as per the provisions of the Act, but still in order to settle the matter forever a compromise was arrived at between the parties. 3. That the act and conduct of the complainant and his S.P.A. implidly proved that the alleged offence under the Act stands compounded as the cheque amount stands received by the complainant without any reservation, with a plea of withdrawing the complaint, after the payment of cheque amount as a full and final payment/settlement towards the said cheque, as such, the proceedings pending in the Court survives no more.” 3. The only averment in reply to this allegation was that the cheque amount was paid, but a period of three year had elapsed and no interest was paid. In purport, the application seems to have been filed under Section 147 of the Negotiable Instruments Act. 3. The learned trial Court dismissed the application holding that once the complaint is filed and is not closed, no order can be passed at the interim stage. Section 147 of the Act provides: “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.” 3 4. A similar question came up for consideration before the Supreme Court in Damodar S. Prabhu vs. Sayed Babalal H. (2010) 5 SCC 663 in which the Court holds that power under Section 147 of the Act is independent of the provisions of Section 320 of the Code of Criminal Procedure. While disposing the petition, the Supreme Court directed: “21. With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence. It was submitted that the requirement of deposit of the costs will act as a deterrent for delayed composition, since at present, free and easy compounding of offences at any stage, however belated, gives an incentive to the drawer of the cheque to delay settling the cases for years. An application for compounding made after several years not only results in the system being burdened but the complainant is also deprived of effective justice. In view of this submission, we dirct that the following guidelines be followed: THE GUIDELINES (i) In the circumstances it is proposed as follows: (a) That directions can be given that the writ of summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused. (b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the court deems fit. (c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such 4 compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs. (d) Finally, if the application for compounding is made before the Supreme Court, the figure would incease to 20% of the cheque amount.” 5. Without entering any further into the controversy, I hold that the learned trial Court was wrong in not considering the application for compounding the offence. However, since the application has now been considered by this Court in proceedings under Section 482 of the Code of Criminal Procedure, I deem it fit and proper that the respondent will be entitled to the benefit of under Clause (c) of the guidelines as laid down by the Supreme Court in Damodar’s case supra The amount thus works out to Rs. 81,000/-. 6. In the facts and circumstances of the case, it is directed that the offence be compounded in terms of Section 147 of the Act. The petitioner shall pay a sum of Rs. 75,000/- to the respondet in this Court on or before 27th October, 2010. On such deposit being made, the amount shall be released to the bank account of the respondent, particulars whereof will be supplied by him. The Registry is directed to remit the amount to his bank account. It is also directed that taking into consideration that the controversy with respect to the Negotiable Instruments Act which is the subject matter of this petition has been compounded, the parties have agreed that there will be no other civil-criminal litigation with respect to this cheque. 5 7. Petition stands disposed of. No orders as to costs. Let a copy of this order be placed on record of the case of the trial Judge. Record be sent back forthwith. Dasti copy on usual terms. August 12th, 2010 (Dev Darshan Sud) (ms) Judge