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2009 DIGILAW 14 (JK)

Gh. Ahmad Sheikh v. Gh. Mohi-ud-din Bhat

2009-02-01

MANSOOR AHMAD MIR

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1. Respondent-Ghulam Mohi-ud-Din Bhat, hereinafter complainant, filed a complaint against the petitioner-accused, hereafter accused under Section 138 of Negotiable Instruments Act, for short the Act, before Judicial Magistrate (Sub-Judge) Kulgam. Accused came to be convicted and sentenced vide judgment and order dated 22nd of July, 2005. Feeling aggrieved, accused filed a criminal appeal before the learned Sessions Judge, Anantnag-came to be dismissed. 2. Accused has called in question the judgment and orders of both the courts-trial court and appellate court by the medium of this revision petition. 3. During the pendency of this petition, learned counsel for the parties stated at bar that the parties have arrived at amicable settlement outside the court. Accordingly, their statements were recorded in terms of order dated 3rd of December, 2007 and accused was granted bail. 4. Learned counsel for the complainant made a statement at bar today that complainant has received the amount in full in terms of the settlement and prayed that impugned judgments/ orders of conviction and sentence be set-aside and the accused be acquitted. His statement is taken on record. 5. The core question is, whether the parties can enter into compromise and whether complaint can be dismissed in terms of the settlement/compromise? 6. It is profitable to notice the aim and object of Section 138 of the Act. The legislative object and purpose of Section 138 of the Act is clearly aimed at to regulate financial promises in growing business, trade, commerce and industrial activities of the country. It is to promote greater vigilance in the matters covered by it and is designed to safeguard the faith of the creditor. It is just to avoid the malignant trade practice of indiscriminately issuing cheques without sufficient funds which is essential to the economic life of a developing country like India. 7. Keeping in view the aim, object and purpose of Section 138 and 147 of the Act the commission of offences punishable under Section 138 is compoundable. 8. Apex Court in case titled Anil Kumar Haritwal v. Alka Gupta reported in 2004 AIR SC 3978 held that the prayer of the parties seeking to settle the dispute and praying for setting aside the conviction and sentence should be allowed in the interests of justice in view of the fact that Section 147 of the Act permits compounding of the offence. It is profitable to reproduce para-6 of the said judgment herein: 6. We have perused the records of the said case, which in our opinion are similar to the facts of the present case and we think it proper that prayer of the parties seeking to settle the dispute and praying for setting aside the conviction and sentence should be allowed. In the said view of the matter following the judgment of this Court in the above case we allow this appeal setting aside the conviction and sentence imposed on the appellants in the interest of justice in view of the fact that the dispute is settled between the parties and Section 147 of the Negotiable Instruments Act permits compounding of the offence. 9. Apex Court in a recent judgment titled Vinay Devanna Nayak v. Ryot Seva Sahakari Bank Ltd., reported in 2007 AIR SCW 7844, held that purpose of Section 138 of the Act is to curb issuing the cheques without funds indiscriminately in order to regulate the financial promises and to promote the efficacy of banking operations and ensure credibility in transacting business through cheques. The Apex court entertained the settlement/ compromise arrived at between the parties and set-aside the conviction and sentence order and acquitted the accused. It is profitable to reproduce paras 14, 15 and 16 of the said judgment herein: 14. In Cranex Ltd. & Anr. V. Nagarjuna Finance Ltd. & Anr., (2000) 7 SCC 388, a settlement had been entered between the parties during the pendency of appeal in Sessions Court against an order of conviction and sentence recorded by the Magistrate under section 138 of the Act. This Court directed the Appellate Court to consider the settlement and to take appropriate action in accordance with law. 15. In O.P. Dholkia v. State of Haryana & Anr., (2000) 1 SCC 762, an order of conviction recorded by the Trial Court was upheld by the Appellate as well as Revisional Court. Thereafter, however, a compromise had been arrived at between the parties and the entire amount was paid to the complainant. It was, therefore, submitted before this Court that the accused may be acquitted. The Learned Counsel appearing for the State urged that when the conviction and sentence had been maintained by all Courts, this Court need not show any indulgence. Thereafter, however, a compromise had been arrived at between the parties and the entire amount was paid to the complainant. It was, therefore, submitted before this Court that the accused may be acquitted. The Learned Counsel appearing for the State urged that when the conviction and sentence had been maintained by all Courts, this Court need not show any indulgence. Though the Court observed that there was `some force in the said contention, taking into account the nature of offence and the fact that the complainant had compromised the matter, permission was granted in the peculiar facts and circumstances of the case [see also Nambiram Veetil Packer v. State of Kerala & Anr., (2003)9 SCC 214]. It is thus clear that even though technically the provisions of Section 320 of the Code of Criminal Procedure did not apply to offences not covered by the Indian Penal Code, the fact as to compromise between the parties and payment of dues under Section 138 of the Act was considered a relevant fact and compounding was allowed by the Court [vide Kishore Kumar v. J.K. Corporation Ltd., (2004) 13 SCC 494; Shailesh Shyam Parsekar v. Baban @ Vishwanath, (2005)4 SCC 162; K.J.B.L. Rama Reddy v. Annapurna Seeds & Anr., (2005) 10 SCC 632]. 16. 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. 10. In the case in hand, cheque amount stands paid to the complainant, thus the dispute stands settled. In the given circumstances of the case, I deem it proper to allow this revision petition, set-aside the conviction and sentence recorded by the courts below and dismiss the complaint. 11. Viewed thus impugned judgments and orders are set-aside, accused is acquitted and complaint is dismissed. Send down the record along with copy of this judgment to courts below.