Summary
A cheque-dishonour conviction was set aside after the complainant confirmed a settlement and receipt of the entire agreed amount. Courts should verify the genuineness of settlement documents relied on at the appellate stage and encourage voluntary compounding of NI Act offences, giving priority to their compensatory purpose. The appellants were acquitted.
Issues
- Whether the verified settlement justified compounding after conviction.
- What verification and court permission were required at the appellate stage.
Provisions considered
- Section 147, Negotiable Instruments Act, 1881The cheque-dishonour offence was compoundable and the verified settlement was accepted as compounding. (¶¶ 4, 5, 6)
- Section 320(5), Code of Criminal Procedure, 1973Compounding after conviction while an appeal is pending requires leave of the appellate court. (¶¶ 4, 5)
Held
- The settlement recorded payment of Rs.5,25,000 and the complainant’s acceptance in full settlement, with no objection to setting aside the conviction. His affidavit filed on the Court’s direction confirmed those facts and established genuineness. (¶¶ 3, 5)
- When a document is relied on for compounding at the appellate stage, its veracity should be checked through an appropriate method. Here, obtaining the complainant’s confirming affidavit satisfied that requirement; leave for post-conviction compounding was warranted. (¶¶ 4, 5)
- The compensatory purpose of the cheque-dishonour remedy should receive priority over punishment. Courts should encourage compounding where the parties are willing to settle, thereby also reducing pending litigation. (¶ 6)
- In view of the genuine compromise, the convictions were set aside and the appellants acquitted. The second appellant need not surrender and his sureties were discharged. (¶ 8)
Result
Appeal allowed; High Court and trial court orders set aside and appellants acquitted on settlement. Second appellant need not surrender; sureties discharged.