Summary
Consent remains necessary to compound a cheque-dishonour offence, and repayment alone does not erase criminal liability. Nevertheless, the Court granted exceptional Article 142 relief after court-monitored repayment of the entire advance plus additional interest and over a year’s custody. The separate cheating case lacked evidence of dishonest intention at inception. Both sets of criminal proceedings were quashed as to the appellant, the cheque convictions and sentences set aside, and deposited demand drafts directed to the complainant.
Issues
- Whether full payment permitted compounding despite the complainant’s refusal.
- Whether the particular facts justified quashing and Article 142 relief.
- Whether failure to supply the machine established initial cheating intent.
Provisions considered
- Sections 138 and 147, Negotiable Instruments Act, 1881Compounding may occur after conviction but requires complainant consent; full repayment does not automatically absolve the offence. Quashing was distinguished and granted exceptionally. (¶¶ 11, 12, 14)
- Sections 258 and 320, Code of Criminal Procedure, 1973The Court rejected reliance on the disapproved Section 258-based power to close complaint proceedings without consent, while distinguishing consensual compounding from quashing. (¶ 12)
- Sections 406, 420 and 120B, Indian Penal Code, 1860The FIR prosecution was quashed because the commercial failure was not supported by evidence of dishonest intention from inception on this record. (¶¶ 2, 13, 14)
- Article 142, Constitution of IndiaComplete-justice relief ended the pending cheque appeals and set aside conviction and sentence in the peculiar circumstances of monitored repayment, additional interest and custody already undergone. (¶¶ 12, 14, 15)
Held
- Cheque offences are compoundable even at the appellate stage, but Section 147 does not eliminate the aggrieved person’s consent. Courts cannot compel that consent, and repayment alone does not automatically discharge criminal liability. (¶¶ 11, 12)
- Kanchan Mehta did not authorise compounding without consent; its separate observation permitting closure of complaint proceedings through Section 258 was held not good law by the later five-judge decision in Expeditious Trial. Quashing and compounding are distinct exercises. (¶ 12)
- The appellant had returned the entire Rs.1.55 crore advance, deposited an additional Rs.10 lakh toward delayed-payment interest under Supreme Court directions and spent over one year in custody. Although the original settlement had failed on payment deadlines and the complainant refused fresh compromise, these particular circumstances justified ending the pending proceedings through quashing rather than deemed consent. (¶¶ 7, 8, 9, 10, 12, 14)
- Failure to procure and supply the machine despite taking an advance did not, on the evidence here, establish dishonest intent from the beginning. The Court regarded this transaction as civil and found no basis to continue the separate FIR prosecution for the alleged cheating-related offences. (¶¶ 13, 14)
- The High Court order was set aside and all criminal proceedings against the appellant arising from FIR 35/2014 quashed. Under Article 142, the pending cheque appeals were also quashed and the underlying convictions and sentences set aside. Demand drafts totalling Rs.30 lakh were to be handed to the complainant if not already delivered. (¶¶ 14, 15)
Result
Appeal allowed; FIR proceedings and pending cheque appeals quashed as to the appellant. Cheque convictions and sentences set aside under Article 142; Rs.30 lakh deposited drafts to be delivered to the complainant if not already handed over.