M. Rangaswamaiah vs R. Shettappa

On the complaint filed by the respondent, alleging commission of offence u/s 138 of the Negotiable Instruments Act, 1881 (''Act'' for short), the

petitioner came to be convicted by the learned Magistrate of the said offence, and sentenced to pay a fine of Rs. 75,000/-, in default, to undergo

simple imprisonment for four months. Since the amount covered by the cheque concerned was Rs. 50,000/-, the learned Magistrate directed that,

out of the fine amount of Rs. 75,000/-, a sum of Rs. 50,000/- be paid to the respondent-complainant.

The petitioner-accused''s appeal before the learned Sessions Judge came to be dismissed.

The petitioner has now approached this Court u/s 397 of the Cr. P.C.

In course of hearing of this revision petition, the petitioner and the respondent have presented an application u/s 320(6) of the Cr. P.C. Both the

parties, along with their Counsel, are present in Court, and the parties submit that they have compounded the offence. The respondent-complainant

also submits that the petitioner-accused has paid the amount covered by the cheque to him. I find that the parties have done so voluntarily. It is

true, sub-section (6) of Section 320 of the Cr. P.C. permits the revisional Court also to allow compounding of the offence, but the person

concerned should be competent to compound u/s 320 of the Cr. P.C., as further made clear in sub-section (6) of Section 320 of the Cr. P.C. The

entire Section 320 of the Cr. P.C., both in sub-section (1) and in sub-section (2), deals with compounding of offences punishable under the Indian

Penal Code. Sub-section (9) of Section 320 of the Cr. P.C. provides that, no offence shall be compounded except as provided by Section 320 of

the Cr. P.C. That means that, so far as the offences punishable under the one or the other sections under the Indian Penal Code, there could be no

compounding of any such offence except as provided in Section 320 of the Cr. P.C. The question is as to what should be the position in respect of

an offence punishable under any other Act.

Sub-section (1) of Section 4 of the Cr. P.C. provides that all offences under the Indian Penal Code shall be investigated, inquired into, tried, and

otherwise dealt with according to the provisions contained in the Code of Criminal Procedure. Sub-section (2) of Section 4 of the Cr. P.C.

provides that all offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions

of the Cr. P.C., subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or

otherwise dealing with such offences. Compounding of an offence could be brought into the category of ""otherwise dealing with the offence"". So

far as compounding of an offence punishable under the Indian Penal Code, there could be no way of dealing with it, other than to the extent as set

out in Section 320 of the Cr. P.C. So far as offences under the other Acts are concerned, if compounding of a particular offence under any other

law or enactment is to be viewed from an angle different from the one provided in Section 320 of the Cr. P.C., then, I am of the opinion that, as

permitted by Section 4(2) of the Cr. P.C., the aspect of compounding of the said offence under the said other enactment should be dealt with in

the manner as indicated in the said other enactment, notwithstanding the embargo in sub-section (9) of Section 320 of the Cr. P.C. The question

that therefore arises would be as to whether the Act, i.e., the Negotiable Instruments Act, indicates a different approach.

Schedule II of the Code of Criminal Procedure, 1898 (''old Code'' for short) set out a Tabular Statement of Offences containing eight columns,

one of which related to whether a particular offence is compoundable or not. Initially dealing with the offences under the Indian Penal Code, the

said Tabular Statement, at the end, dealt with offences against other laws. The said portion of the statement would show that, irrespective of the

punishment, no offence under any other law was compoundable. It could therefore be said that, in spite of Section 5 of the old Code

corresponding to Section 4 of the present Code, compounding of the offence under any law other than the Indian Penal Code would be totally

prohibited unless the said other law expressly permitted compounding of the offences. Now, under the present Code, Part II of the First Schedule

to the Code dealing with classification of offences under other laws does not contain a column totally prohibiting compounding of offences under

other laws in the manner it had been so in the old Code. That means that, in the present Code, there is no express prohibition against compounding

of an offence under other laws. In the absence of such prohibition in the present Code, and where the Negotiable Instruments Act itself is silent, the

question is whether the said offence could be compounded.

The provisions of sub-sections (1) and (2) of Section 320 of the Cr. P.C. permitting compounding of some of the offences punishable under

some sections of Indian Penal Code and sub-section (9) of Section 320 of the Cr. P.C. prohibiting compounding of any offence otherwise than in

the manner provided in Section 320 of the Cr. P.C., coupled with the absence of prohibition under the Cr. P.C. for compounding of offences

under other laws, would indicate that, so far as the offences punishable under the Indian Penal Code, the aspect of compounding of offences has

been dealt with by way of Section 320 of the Cr. P.C., the present Cr. P.C. should be taken as being silent on the said aspect of compounding, or

at least there is no prohibition, express or implied, in the present Cr. P.C. so far as compounding of offences under any other law is concerned.

Therefore, in view of Section 4(2) of the Cr. P.C., the aspect of compounding would be permissible to be looked at in respect of offences under

any other law in the spirit of what the said other law deals with it, rather than in the spirit of Section 320 of the Cr. P.C. We therefore come to the

Negotiable Instruments Act. There is no prohibition in the said Act against compounding of an offence punishable u/s 138 of the said Act. In the

absence of any such prohibition therefore, where the Court finds that the parties have settled the matter, where the complainant being present

before the Court submits before the Court that the accused has paid him the money covered by the cheque, it would be appropriate to allow the

parties to compound, rather than negativing such a joint request made by the parties, and proceeding to inflict the sentence on the accused.

Particularly when there is no prohibition against compounding, any rejection of a request in that regard would not further the cause of the justice,

and particularly where the commission of offence is not related to the society at large, but only against a particular person, viz., the complainant to

whom certain sum is due under the cheque. I am therefore of the opinion that it would be legally permissible for the parties to compound the

offence punishable u/s 138 of the Negotiable Instruments Act, 1881.

In Mohan Reddy v Jairaj D. Bhale Rao and Another and Naimesh P. Pandya Vs. State of Gujarat and Another, , compounding of an offence

u/s 138 of the Negotiable Instruments Act was permitted respectively by the Andhra Pradesh High Court and Gujarat High Court. Even in a case

where the conviction u/s 138 of the Negotiable Instruments Act had been upheld by all the three forums, the Supreme Court, at the stage of SLP,

where the complainant, having received the entire money, stated before the Supreme Court that he has no objection if the conviction was set aside,

the Supreme Court permitted the complainant and the accused entering into a compromise, and proceeded to set aside the conviction and

sentence, though the Supreme Court did so, as specifically observed by it in course of the order, in the peculiar facts and circumstances of the case

that was being dealt with by it. That was in 2000 (1) OLR 400 (SC) .

In view of the above, the application is allowed. The complainant-respondent is permitted to compound the offence punishable u/s 138 of the

Negotiable Instruments Act, 1881. The petitioner-accused is acquitted of the said offence punishable under the said Act of 1881.

Revision petition disposed of accordingly.