Every offence under section 147 of Negotiable Instruments Act was compoundable

Arun Vincent Rajkumar Vs S. Mala (Karnataka High Court)

Conclusion:  Section 147 of the Negotiable Instruments Act makes every offence punishable under the Act as compoundable and there is no bar on parties to compound the offence. However, at the same time, the guidelines laid down by the Hon’ble Apex Court in Damodar S. Prabhu’s Case regarding imposing graded cost on litigant that the accused should pay 15% of the cheque amount by way of cost also was to be borne in mind.

Held: In the instant case, both the parties had come up with memorandum of settlement in all the four matters, in which regard, they had filed separate interlocutory applications in each petition, under Section 147 of the N.I. Act read with Section 320 (6) of the Code of Criminal Procedure, 1973.  In the memorandum of settlement filed along with the interlocutory applications in all the four matters, both parties had carved out the terms of settlement entered into between them, the summary of which was that, the present respondent in all these four matters, by accepting a total sum of `9,00,000/- (Rupees Nine Lakhs only) payable to her by the accused, had agreed for the acquittal of the accused from the alleged offence punishable under Section 138 of the N.I. Act and also had agreed for refunding of the deposits said to have been made by the assessee herein in the Trial Court as well as in this Court. It was held that both parties had, with their free consent and out of their own volition, without being influenced by undue influence, duress or misrepresentation or by mistake, had entered into the terms of settlement in their best interest. Hence, there was no embargo to deny them the permission to settle the matter. Section 147 of the N.I. Act has made every offence punishable under the N.I. Act as compoundable. As such, there was no bar for the parties in the proceeding to compound the offence. However, at the same time, the guidelines laid down by the Hon’ble Apex Court in Damodar S. Prabhu’s Case, regarding imposing graded cost on litigant also was to be borne in mind that if the application for compounding was made before the Sessions Court or High Court in revision or appeal, such compounding was permitted to be allowed on the common condition that the accused pays 15% of the cheque amount by way of cost.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

Learned counsels from both side in all these four matters along with their respective clients as identified by them, are physically present in the Court.

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