In a Revision application wherein compounding of the offense under Section 138 of the NI Act was prayed for, the Calcutta High Court held that since the settlement agreed upon by the parties failed on the part of the petitioner, the offense cannot be compounded and accordingly the revision petition was dismissed, while the order of the Learned Magistrate was upheld.
Brief Facts:
The present revision petition was filed against the judgment and order passed by the Learned Sessions Judge in a criminal appeal wherein the judgment of the judicial magistrate was affirmed. The case was in connection to a complaint made under Section 138 of the Negotiable Instruments Act and the magistrate was pleased to direct payment of compensation of Rs.5,80,000/- to the opposite party.
The fact of the case was that the opposite party’s company was carrying the business of financing and used to lend money to its customer for various transporting businesses. Petitioner was one of the customers. The petitioner applied for a loan before the opposite party and the loan of an amount of Rs. 6,50,000/- was sanctioned vide a loan agreement for a purchase of a vehicle. Thereafter the petitioner became irregular in the payments of the monthly installments. Once the petitioner had given a cheque towards the payment of the monthly installments and the same was dishonored on the account of insufficiency of funds. Then the opposite party issued a demand notice but the petitioner did not pay the dishonored cheque amount, so a complaint was filed against the petitioner under section 138 of the negotiable instruments act.
The Learned Judicial Magistrate had convicted the petitioner and the petitioner was directed to pay the compensation to the opposite party to the opposite party within six months from the date of the order and to suffer simple imprisonment for six months. Aggrieved by the order the petitioner preferred a criminal appeal.
It was submitted that a settlement was entered between the parties and Rs.3,90,000/- had been fixed as the amount towards the loan Agreement which was to be paid by the petitioner, out of this amount a certain amount was paid by the petitioner but then because of the pandemic and the implementation of the pandemic, the petitioner was unable to pay the rest of the amount.
Contentions of the Petitioner:
The Learned Counsel for the Petitioner submitted that section 147 of the NI Act, does not provide for explicit guidance as to when compounding can or cannot be done or whether compounding can be done at the instance of the complainant or with the leave of the court. But the Supreme Court has in various judgments observed that at any stage the offence under Section 138 of the NI Act can be compounded under Section 147. Accordingly, it was submitted that the impugned judgment and order of conviction and sentence is perverse suffers from inherent infirmities is not tenable in law, and is liable to be set aside.
Contentions of the Respondent:
(There was no representation on behalf of the opposite party)
Observations of the Court:
The Hon’ble Court noted that the settlement of a certain amount as contended by the petitioner was arrived at after the judgment under revision and the petitioner contends that since the matter has been settled now, necessary orders must be passed. The court noted that the amount reduced by the settlement is a lot less than the amount of the compensation and the petitioner had not made the full payment in that regard as well.
The court then referred to the case of B.V. Seshaiah vs. The State of Telangana & Anr. and B. Vamsi Krishna vs. The State of Telangana & Anr. and differentiated it from the current case wherein it has been admitted by the petitioner that the total amount as settled with the opposite party has not been paid by the petitioner. The court then concluded that the said settlement has failed on the part of the petitioner and the present case cannot be compounded as has been prayed for.
The decision of the Court:
The Calcutta High Court dismissed the revisional application and held that since the settlement failed on the part of the petitioner, the present case cannot be compounded.
Case Title: Abdul Somi Mondal v. Shriram Transport Finance Company Ltd.
Coram: Hon’ble Justice Shampa Dutt (Paul)
Case no.: CRR 1399 of 2020
Advocate for the Petitioner: Mr. Saryati Datta, Mr. Sanjib Kr. Dan, Mr. Chitrak Biswas.
Advocate for the Respondent: None
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