Criminal Misc. No. M-22336 of 2008 1 In the High Court of Punjab and Haryana, at Chandigarh. Criminal Misc. No. M-22336 of 2008 Date of Decision: 14.10.2010 M/s Sunil Kumar & Company and Another …Petitioners Versus Baltej Singh Sidhu …Respondent CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA. 1. Whether Reporters of local papers may be allowed to see the judgment? - Yes 2. Whether to be referred to the reporters or not? - Yes 3. Whether the judgment should be reported in the Digest? - Yes Present: Mr. Parminder Singh, Advocate for the petitioners. Mr. Inderjit Sharma, Advocate for the respondent. Kanwaljit Singh Ahluwalia, J. (Oral) Present petition has been filed under Section 482 Cr.P.C. with a prayer that complaint No.556 dated 19.12.2007, titled as Baltej Singh Sidhu v. M/s Sunil Kumar & Company (Annexure P-4), summoning order Annexure P-5 dated 22.12.2007 passed by JMIC, Bhatinda along with the order dated 7.6.2008 (Annexure P-8) passed by the JMIC, Bhatinda, as well as the consequential proceedings be quashed. Complainant – respondent instituted a complaint, Annexure P- 4 against the petitioner in the court of Chief Judicial Magistrate, Bhatinda. In the complaint, it was stated that the petitioner had issued a Criminal Misc. No. M-22336 of 2008 2 cheque of Rs.5.00 lacs in favour of the respondent. It was stated in the complaint that on 3.10.2007, a settlement was effected between the complainant and the accused. As per the settlement, Rs.24.00 lacs was to be paid by the accused to the complainant, however, the accused had agreed to pay Rs.22.00 lacs. Out of the above amount, a sum of Rs.3.00 lacs was paid in cash by accused no.2 Sunil Kumar, being partner of the firm, accused No.1, and thereafter, petitioner issued three cheques of Rs.5.00 lacs each and the remaining amount of Rs.4.00 lacs was agreed to be paid within a short span of time. It is the further case of the parties that Rs.10.00 lacs were paid in cash and the two cheques amounting to Rs.5.00 lacs each were returned, however, one cheque in the sum of Rs.5.00 lacs, bearing No.6500730986 dated 15.11.2007 drawn on State Bank of Patiala, Anaj Mandi, Bhatinda was retained by the complainant. Upon presentation of the aforesaid cheque, the same bounced, hence the complaint under Section 138 of the Negotiable Instruments Act was instituted. Before instituting the complaint, statutory notice as required under the Act was issued by the Counsel for the complainant to the petitioner. The notice dated 27.11.2007 has been annexed as Annexure P-2. The above said notice was replied by the accused stating that in order to earn peace, accused were ready and willing to pay the amount. The following portion of the reply to the notice is required to be noticed here:- “...Nevertheless in order to earn the peace, my client is prepared to pay a sum of Rs.5.00 lacs as per your notice, but your client is under obligation to return other two cheques, i.e., bearing Nos. 617195 and Criminal Misc. No. M-22336 of 2008 3 617196. My client has got reasonable apprehension that the said cheques are also likely to be misused by your client or by his any other associate/s. For your perusal and your record, I am enclosed the copy of 'Panchayati Faisla' dated 3.10.2007, which clearly indicates that other two cheques are also with your client. By responding your notice dated 27.11.2007 served on behalf of Baltej Singh Sidhu, I hereby call upon you to return two other cheques No.617195 and 617196 and take the sum of Rs.5.00 lacs as demanded by you covered vide cheque No.617197.” However, the complainant went ahead and instituted the impugned complaint, Annexure P-4. The summoning order Annexure P- 5 was passed on 22.12.2007 and the accused were asked to cause their appearance on 15.3.2008. It is the case of the accused-petitioner that they first time appeared in the court on 17.3.2008 and were released on bail and complaint was adjourned to 15.4.2008 and an application (Annexure P-6) was filed by them on 15.4.2008 in which they prayed that in order to earn peace and to avoid further litigation, they were ready to pay the amount of cheque. The following averment made in the application Annexure P-6 is required to be noticed here:- “...2. That in order to earn mental peace and in order to avoid further litigation and to avoid loss of business, the applicant is prepared to pay the entire Criminal Misc. No. M-22336 of 2008 4 cheque amount i.e. Rs.5.00 lacs to the complainant. It is worthwhile to state that the applicant received the notice prior to the filing of the present complaint and the applicant send the reply dated 5.12.2007 stating therein that in order to earn peace, the applicant is prepared to pay the cheque amount, although the cheque was taken forcibly. It is, therefore, prayed that the cheque amount Rs.5.00 lacs be paid to the complainant and the complaint be dismissed.” Reply to the above stated application was filed stating therein that the accused had paid three post dated cheques of Rs.5.00 lacs each out of which the accused have made payment of Rs.10.00 lacs in cash and, therefore, two cheques in the sum of Rs.5.00 lacs were returned and, thus, as per the terms of the compromise dated 15.4.2008, besides a sum of Rs.5.00 lacs towards the dishonoured amount of the cheque, another sum of Rs.4.00 lacs is outstanding. The complainant, in reply to the aforesaid application, has alleged that it was a clever device on the part of the accused to wriggle out of their lawful obligation. On 15.4.2008, when the application, Annexure P-6, was filed, the Court of Judicial Magistrate First Class, Bhatinda passed the following order:- “Present: Complainant with Sh. V.P. Khurmi, Adv. Accused on bail with Sh. Vijay Pal Goyal, Adv. Accused filed application for directing the Criminal Misc. No. M-22336 of 2008 5 complainant to accept the cheque amount. Learned Advocate for accused request to mention in the interim order that accused has taken today with him cash cheque amount. But it is matter to be calculation the amount. So, it cannot be specifically mentioned in the interim order 3.5.2008. Announced Sd/- Ranjit Singh, PCS Judicial Magistrate 1st Class, Bathinda 15.4.2008.” Finally, considering the contents of application Annexure P-6 and reply thereto (Annexure P-7), the Court vide its impugned order (Annexure P-8) has held that since the offence has already been committed, therefore, the accused has to face the trial. The court further held that offence under Section 138 of the Act is compoundable, however, as the complainant has not agreed for the same, therefore, the proceedings cannot be dropped. Aggrieved against the complaint Annexure P-4, summoning order Annexure P-5 and the impugned order Annexure P-8, the petitioner has filed the present petition in this Court. A Coordinate Bench, before issuing the notice, gave a direction that the petitioner shall appear before the trial Court on 15.9.2008 and make payment of cheque amount along with interest @ 12% per annum. On 22.9.2008, the Coordinate Bench recorded that a sum of Rs.5,00,000/- along with interest @ 12% per annum have been deposited in the trial court on 15.9.2008. It is not disputed that this amount has been received by the complainant under protest. Learned counsel for the petitioner has relied upon C.C. Alavi Criminal Misc. No. M-22336 of 2008 6 Haji v. Palapetty Muhammed and Another 2007(3) Recent Criminal Reports 183 to seek quashing of the proceedings. It is urged that on receipt of the notice, in reply, the accused showed his willingness to pay the amount of the cheque. This Court is of the view that the case of the petitioner may not be squarely covered by the judgment rendered in C.C. Alavi Haji's case (supra) relied upon by learned counsel for the petitioners. Even though in response to the notice, he stated that the petitioners are ready and willing to pay the amount and on the second date of their appearance in the Court, they have brought the amount in cash and moved an application to the Court that the amount of the cheque be disbursed to the accused. The offer made by the accused was spurned by the complainant. However, this Court is of the view that the observations made by the Hon'ble Apex Court in Damodar S. Prabhu v. Sayed Babalal H. 2010(2) Recent Criminal Reports 851 can be invoked in favour of the petitioner. The Hon'ble Apex Court, to ward off the unnecessary filing of the complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “Act 1881”), which consumes unnecessary time and energy of the Court, has drawn various parameters for compounding of the offence. In Damodar S. Prabhu's case (supra), the Hon'ble Apex Court laid a dicta “it is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect”. It will be apposite here to reproduce the following portion of the said judgment:- Criminal Misc. No. M-22336 of 2008 7 “....Furthermore, the written submissions filed on behalf of the learned Attorney General have stressed on the fact that unlike Section 320 of the Cr.P.C, Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court. As mentioned earlier, the learned Attorney General's submission is that in the absence of statutory guidance, parties are choosing compounding as a method of last resort instead of opting for it as soon as the Magistrates take cognizance of the complaints. One explanation for such behaviour could be that the accused persons are willing to take the chance of progressing through the various stages of litigation and then choose the route of settlement only when no other route remains. While such behaviour may be viewed as rational from the viewpoint of litigants, the hard facts are that the undue delay in opting for compounding contributes to the arrears pending before the courts at various levels. If the accused is willing to settle or compromise by way of compounding of the offence at a later stage of litigation, it is generally indicative of some merit in the complainant's case. In such Criminal Misc. No. M-22336 of 2008 8 cases it would be desirable if parties choose compounding during the earlier stages of litigation. If however, the accused has a valid defence such as a mistake, forgery or coercion among other grounds, then the matter can be litigated through the specified forums...” A perusal of Section 320 Cr.P.C. reveals that it specify the person who can compound the offence, whereas Section 147 of the Act 1881 does not specify the person who can compound the offence. It is not necessary that the person, in whose favour the cheque was issued, can compound the offence in the just circumstances, even the Court can compound the offence. Section 147 of the 1881 Act 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." The above said view is fortified, if the guidance is taken from the following portion of the judgment rendered in Damodar S. Prabhu's case (supra):- “...8. At this point, it would be apt to clarify that in view of the non-obstante clause, the compounding of offences under the Negotiable Instruments Act, 1881 is controlled by Section 147 and the scheme contemplated by Section 320 of the Code of Criminal Procedure [Hereinafter `CrPC'] will not be applicable in the strict sense since the latter Criminal Misc. No. M-22336 of 2008 9 is meant for the specified offences under the Indian Penal Code. So far as the Cr.P.C. is concerned, Section 320 deals with offences which are compoundable, either by the parties without the leave of the court or by the parties but only with the leave of the Court. Sub-section (1) of Section 320 enumerates the offences which are compoundable without the leave of the Court, while sub- section (2) of the said section specifies the offences which are compoundable with the leave of the Court. Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub- section (9) of Section 320 of the Cr.P.C. which states that `No offence shall be compounded except as provided by this Section'. A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Indian Penal Code also cannot be compounded. However, since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the Cr.P.C., especially keeping in mind that Section 147 carries a non- obstante clause...” Criminal Misc. No. M-22336 of 2008 10 Hence, it is held that the Court where finds that payment of cheque has been paid to the complainant or amount is deposited in the Court for disbursal to the complainant in consonance with the guidelines and parameters enumerated in Damodar S. Prabhu's case (supra), the Court, in the facts and circumstances of the case, can quash the complaint and subsequent proceedings without the consent of the complainant under Section 147 of the 1881 Act. To emphasize this, the Code of Criminal Procedure, in the table specified in Section 320 Cr.P.C, in column No.3, mentions the person who can compound the offence, whereas there is no such requirement under Section 147 of the 1881 Act. Considering the fact that in response to the notice, the accused have stated that they are ready to pay the amount of the cheque and brought the same in cash in the Court on the very second date of appearance, for making payment to the complainant, which was refused by learned counsel for the complainant. Furthermore, the fact that in pursuance of the interim order dated 1.9.2008, passed by the Co- ordinate Bench of this Court, the accused have deposited a sum of Rs. 5,00,000/- along with the interest at the rate of 12% per annum and the same has been accepted by the complainant under protest, this Court is of the view that the continuation of the proceedings, arising out of the impugned complaint and the summoning order, may not be just and proper. On the observations made by this Court that as to why the complaint be not quashed, Counsel for the respondent has stated that as per the compromise Rs.4.00 more is due and if the same is paid, the Criminal Misc. No. M-22336 of 2008 11 complaint be quashed. On the observations made that since offence under Section 138 of the Act is made out only qua amount of the dishonoured cheque, respondent may avail his remedy for recovery of Rs.4.00 lacs by approaching the Civil Court, or avail any other remedy which is permissible under law, Counsel for the respondent states that with liberty aforesaid, the present complaint may be quashed. In view of the peculiar facts and circumstances of the case and the ratio of law laid down in Damodar S. Prabhu's case (supra) and the submission made by the Counsel for the respondent, the impugned complaint Annexure P-4, summoning order Annexure P-5 are quashed. However, liberty is granted to the respondent to avail his lawful remedy, in accordance with the provisions of law for recovery of Rs.4.00 lacs, which allegedly is due, on the basis of the so-called compromise arrived at between the parties. (Kanwaljit Singh Ahluwalia) Judge October 14, 2010 “kadyan/DK”