Supreme Court has refused to impose costs on compounding where the accused was acquitted by the trial court but convicted by the high court and compounding was arrived in appeal in the Supreme Court.
A bench of Justice Banumathi and Justice Bopanan has passed the order in the case titled as Rajendra vs Nand Lal on 06.08.2019.
The respondent has filed the compliant under Section 138 of the N.I. Act based on two cheques:- for Rs. 7,80,000/- dated 28.05.2014 and Rs. 5,80,000/- dated 28.06.2014, alleging that when presented for collection, the cheques were returned with endorsement "insufficient funds".
The Trial Court vide its judgment dated 28.10.2015 acquitted the appellant by holding that the respondent-complainant had not proved that the cheques were issued for discharging legally enforced debt. Appeal filed by the respondentcomplainant was allowed by the High Court vide the impugned judgment.
By the impugned judgment, the High Court has convicted the appellant under Section 138, N.I. Act and sentenced the appellant to undergo imprisonment for two years.
When the matter reached the Supreme Court, parties settled their dispute amicably. Then the issue was regarding the costs on compounding as prescribed by the Supreme Court in its judgment in Damodar S. Prabhu vs. Sayed Babalal H., (2010) 5 SCC 663.
Supreme Court noted "The learned counsel for the appellant has submitted that in the special facts and circumstances of the case, the Court can waive the costs to be levied. As discussed earlier, in the present case, the appellant, accused was acquitted by the Trial Court inter alia on the ground that the respondent had not established that there was a legally enforceable debt. Since the appellant was convicted only in the High Court, the appellant had substantial ground to raise in the criminal appeal filed before this Court. Because of the reversal of the acquittal by the High Court and the conviction recorded only by the High Court, the appellant had opportunity of negotiating for settlement in this Court after filing the appeal. In such facts and circumstances of the case, this is not a case where cost is to be imposed, as per the guidelines laid down by this Court as per the judgment reported in (2010) 5 SCC 663 (supra)".
Read the Order here:
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