Summary
The complainant’s consent is necessary to compound a cheque dishonour offence, and the High Court cannot dispense with it by combining Sections 482 CrPC and 147 of the NI Act. The Supreme Court set aside the compounding order but, considering the payments already deposited and the circumstances of settlement, itself quashed the complaint under Article 142.
Issues
- Whether a High Court can compound an offence under Section 138 of the NI Act without the complainant’s consent because the complainant has been compensated.
- Whether the Supreme Court should quash the proceedings under Article 142 in the particular circumstances despite setting aside the compounding order.
Provisions considered
- Section 147, Negotiable Instruments Act, 1881Compounding an offence under Section 138 requires the complainant’s consent; the non-obstante clause does not dispense with that requirement. (¶¶ 8, 9, 14, 17)
- Section 482, Code of Criminal Procedure, 1973Inherent powers cannot be combined with the statutory power of compounding to bypass the necessary consent of the complainant. (¶¶ 5, 6, 9, 11, 19)
- Article 142, Constitution of IndiaThe Supreme Court exercised its power to do complete justice to quash this complaint; that power is unavailable to the High Court. (¶¶ 18, 21)
Held
- Although an offence under Section 138 may be compounded at any stage under Section 147, the complainant’s consent is essential. Equitable compensation does not itself authorise compounding against the complainant’s wishes. (¶¶ 13, 14, 15, 17)
- Quashing and compounding are distinct. Section 482 cannot be used with Section 147 to circumvent the consent required for compounding. (¶¶ 9, 11, 16, 19)
- The Constitution Bench in In re Expeditious Trial of Cases under Section 138 disapproved the reading of Section 258 CrPC that permitted trial courts to close cheque dishonour proceedings and discharge an accused merely because compensation had been made. (¶ 16)
- The Supreme Court’s use of Article 142 to quash proceedings in a particular case does not authorise High Courts to grant similar relief by relying on that exceptional power. (¶ 18)
- On these facts, restoration of the complaint would serve no purpose given the deposited cheque sums, interest and additional amount, together with the accused’s readiness to settle upon receiving summons. The proceedings were therefore quashed under Article 142 despite lack of consent to compounding. (¶¶ 20, 21)
Result
High Court compounding order set aside to that extent; complaint and consequential proceedings quashed under Article 142. Complainant entitled to withdraw the deposited cheque sums, 12% simple interest as directed and additional Rs.1 lakh in accordance with law. Appeals and pending applications disposed of.