In a significant legal pronouncement, the Himachal Pradesh High Court, presided over by Justice Sandeep Sharma, has reaffirmed that offenses under Section 138 of the Negotiable Instruments Act can be compounded even after a conviction has been recorded. This judgment was delivered in the case of Satvir Singh vs. Rajesh Pathania and Another (Cr.MMO No.674 of 2024), where the petitioner sought to compound the offense after entering into an amicable settlement with the complainant post-conviction.
Background of the Case
The case revolves around a monetary dispute where Satvir Singh, the petitioner, had borrowed Rs. 95,000 from Rajesh Pathania, the complainant, in March 2017. To repay this amount, Singh issued a post-dated cheque for the same amount. However, the cheque was dishonored due to insufficient funds in Singh’s account. Following the dishonor, Pathania issued a legal notice to Singh, which went unheeded, leading to the initiation of proceedings under Section 138 of the Negotiable Instruments Act in the Judicial Magistrate First Class, Court No.3, Shimla.
The trial court convicted Singh and sentenced him to simple imprisonment for one year and six months, along with an order to pay compensation of Rs. 1,90,000 to Pathania. The conviction was upheld by the Sessions Court and later by the High Court in a revision petition.
Legal Issues Involved
The principal legal issue before the High Court was whether it could review its earlier judgment upholding the conviction and allow the offense to be compounded under Section 147 of the Negotiable Instruments Act, 1881, in light of a post-conviction settlement between the parties.
The petitioner argued that the High Court has the authority to recall its judgment and allow the compounding of the offense, citing various precedents, including the judgments from the Rajasthan High Court and the Gujarat High Court, which supported the compounding of offenses post-conviction.
Court’s Decision
Justice Sandeep Sharma, in his detailed judgment, accepted the petitionerโs plea, emphasizing the broad and flexible nature of Section 147 of the Negotiable Instruments Act, which permits the compounding of offenses at any stage of the proceedings, including after a conviction has been recorded. The court relied heavily on the Supreme Courtโs judgments, particularly in Damodar S. Prabhu v. Sayed Babalal H. and K. Subramanian v. R. Rajathi, which endorse the compounding of offenses under Section 138, even after the courts have pronounced a conviction.
In the present case, since Satvir Singh had already paid a settled amount of Rs. 1,20,000 to Rajesh Pathania, the court allowed the offense to be compounded. Consequently, the conviction and sentence were quashed, and the petitioner was acquitted of all charges.
The court also directed Singh to pay an additional amount of Rs. 50,000 to Pathania as litigation costs, recognizing the unnecessary strain and legal expenses borne by the complainant in the process.
Key Observations
Justice Sharmaโs judgment underscored the importance of amicable settlements in financial disputes, noting that the court’s role is to facilitate such resolutions to avoid prolonged litigation. He remarked, “In view of the provisions contained under Section 147 of the Negotiable Instruments Act, read with Section 320 of the Cr.PC, this Court holds that a compromise arrived at between the parties should be given due consideration, and offences under Section 138 of the Act can be compounded even after the recording of conviction.”
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Representation
The petitioner, Satvir Singh, was represented by Advocate Mr. Mohar Singh. The respondents, including the complainant Rajesh Pathania, were represented by Advocate Mr. Hamender Chandel, while the State was represented by Additional Advocates General Mr. Rajan Kahol and Mr. B.C. Verma, along with Deputy Advocate General Mr. Ravi Chauhan.
