Abdul Arif vs Rani Amutha K And Another

Madhumati Mitra, J

This is an application under Section 482 read with Section 401 of the Code of Criminal Procedure filed by the revisionist/petitioner challenging the impugned order dated August 21, 2019 in CR Case No. 106 of 2015.

Petitioner has filed affidavit of service showing the service of notice upon the private respondent No. 1. Learned Counsel Miss Zinu appears for private respondent No. 1 and Mr. S.C. Mishra, learned Counsel appears for State respondent.

The petitioner/revisionist and the private respondent No. 1 jointly approached before the learned Magistrate praying for record the amicable settlement of the dispute arising out of issuance of cheque by the present petitioner by filing an application under Section 147 of the Negotiable Instrument Act.

From the submission made by learned Counsel appearing for the parties, it appears that the present opposite party No. 1 started a complaint case under Section 138 of N.I Act against the present petitioner. In the Trial Court the petitioner was acquitted. Thereafter the opposite party No.1 preferred an appeal challenging the said order of acquittal by preferring CRA 026 of 2016. In the appeal, the petitioner was convicted and sentenced to suffer simple imprisonment for a term of two years and to pay a fine of Rs.13,00,000/- in default to suffer further imprisonment for six months. In paragraph 36 of the said judgment, the learned Judge has mentioned as under:

"36. It is further mentioned that in the event of compliance of the sentence order by the respondent/convict by depositing the amount, learned Magistrate shall remit the principal amount of the cheques worth of Rs.6,50,000/- and Rs.3,50,000/- as compensation in favour of the appellant complaint against proper receipt and identification and rest amount shall be deposited to the government exchequer under appropriate head".

The matter went to Hon'ble Apex Court. In paragraph 4 of the judgment of the Hon'ble Apex Court in SPL (Criminal) No.7798 of 2017, the Apex Court has directed the petitioner to pay a some of Rs.7,00,000/- to the complainant in equal five monthly installments which means the accused/petitioner shall pay an amount of Rs. 1,00,000/-every two months to the complainant till he pays the amount of Rs. 7,00,000/- in all as mentioned.

In the said order, the Hon'ble Apex Court made it clear that first the installment should be paid to the petitioner on or before 1st April, 2019 and in case of default of payment of two installments continuously, the impugned judgment dated 27th July, 2017 passed by the High Court, Calcutta in CRA 26 of 2016 should revive. Admittedly, the direction given by the Hon'ble Apex Court was not complied with by the petitioner. Accordingly, the order passed by the High Court in CRA 26 of 2016 revived.

In the mean time, the petitioner approached before the Hon'ble Apex Court for extension of time to make payment but that was turned down by the Apex Court. Thereafter the petitioner (accused) and the complainant came to an amicable settlement and it was settled that the accused would make payment of Rs. 13,00,000/- in total to compound the dispute arising out of issuance of impugned cheque.

Accordingly both the petitioner and the complainant filed a joint petition before the learned Magistrate. The learned Magistrate by the impugned order dated August 21st, 2019 rejected to accept the compromise between the parties under Section 147 of Negotiable Instrument Act on the ground that the learned Magistrate became functus officio.

Learned Counsel for the complainant/respondent No. 1 submits before this Court that admittedly the parties entered into a compromise and amicably settled the dispute and as per the settlement respondent No.1(complainant) accepted Rs.13,00,000/- in total for settlement of the entire claim regarding issuance of cheque in question involved in the complaint case. She has contended that her client has no further grievance and claim so far as the complaint case is concerned.

In this connection learned Counsel appearing for the petitioner has drawn the attention of the Court to the decision of the Apex Court in R. Rajeshawari vs. H.N. Jagadish reported in (2008) 4 SCC 82 and submitted that the settlement can be arrived at between the parties at any stage even at the time of execution also. He has placed his reliance in paragraph 6 of the judgment which is set out herein below:

"......In such a situation, a settlement could be arrived at by and between the complainant and the accused. While a settlement is arrived at, it is not necessary under the provisions of the Act and/or Code of Criminal Procedure to file any affidavit affirmed by the complainant or the accused. By reason of the authority granted by a litigant in favour of his Advocate which, inter alia, empowers the latter to enter into a settlement, any settlement arrived at, on behalf of a party to a lis would be binding on the parties thereto."

The learned Counsel has also cited a decision reported in Vinay Devanna Nayak vs. Ryot Seva Sahakari Bank Limited reported in (2008) 2 SCC 305 and has placed reliance on the following portion of the judgment:-

"Section 138 of the Act was inserted by the Banking, Public Financial Institutions and Negotiable Instrument Law (Amendment) Act, 1988 (ACT 66 of 1988) to regulate financial promises in growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters. The incorporation of the provision is designed to safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developing country like India. The provision has been introduced with a view to curb cases of issuing cheques indiscriminately by making stringent provisions and safeguarding interest of creditors.

As observed by this Court in Electronic Trade & Technology Development Corporation Ltd. V. Indian Technologists & Engineers, (1996) 2 SCC 739, the object of bringing Section 138 in the statute book is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. The provision is intended to prevent dishonesty on the part of the drawer of negotiable instruments in issuing cheques without sufficient funds or with a view to inducing the payee or holder in due course to act upon it. It thus seeks to promote the efficacy of bank operations and ensures credibility in transacting business through cheques. In such matters, therefore, normally compounding of offences should not be denied. Presumably, Parliament also realized this aspect and inserted Section 147 by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act,2002. (ACT 55 of 2002). The said section reads thus:

S.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.

Taking into consideration even the said provision (Section 147) and the primary object underlying Section 138, in our judgment, there is no reason to refuse compromise between the parties. We, therefore, dispose of the appeal on the basis of the settlement arrived at between the appellant and the respondent.

For the foregoing reasons the appeal deserves to be allowed and is accordingly allowed by holding that since the matter has been compromised between the parties and the amount of Rs.45,000/- has been paid by the appellant towards full and final settlement to the respondent-bank towards its dues, the appellant is entitled to acquittal. The order of conviction and sentence recorded by all courts is set aside and he is acquitted of the charge levelled against him. Ordered accordingly."

I have carefully considered the submissions as well as the decisions as stated above. I am of the view that the learned Magistrate ought to have considered the application filed by the parties under Section 147 of the Negotiable Instrument Act in the light of the observation of Hon'ble Apex Court.

The impugned order requires to be interfered with. I am setting aside the impugned order passed by the learned Magistrate with a direction to revisit the matter again in the light of the submission made by the learned counsel appearing for the parties particularly learned Counsel appearing for the respondent No. 1 and to dispose of the application under Section 147 of the Negotiable Instrument Act filed by the parties afresh considering the observation of our Apex Court as mentioned above.

Let a copy of the order be sent immediately to the learned Magistrate for his information and taking necessary action.

The revisional application being No. CRR 026 of 2019 is thus disposed of.

Urgent certified copy of this order, if applied for, be supplied to the learned counsel appearing for the respective parties upon compliance of usual formalities.