Sec 147 of NI Act | Cheque Bounce Can be Compounded Even After Conviction By Lower Court: Himachal Pradesh HC

Recently, Himachal Pradesh HC stated that the court can proceed to compound the offence even after a recording of conviction by the Lower Courts.

The bench of Justice Sandeep Sharma was dealing with the petition challenging the judgment passed by the Additional Sessions Judge affirming the judgment passed by the trial Court where the petitioner-accused has been held guilty of the offence punishable under S. 138 of the Negotiable Instruments Act.

In this case, The accused borrowed Rs. 3.00 Lakh from the complainant for the sale and purchase of apple. 

The accused issued a cheque amounting to Rs. 3.00 Lakh drawn at State Bank of India Theog, but the fact remains that said cheque, on its presentation, was dishonoured on account of insufficient funds in the account of the accused. 

Since despite having received legal notice, the accused failed to make good the payment within the stipulated time, complainant was compelled to institute proceedings under S. 138 of the Act in the competent Court of law. 

The trial Court held the accused guilty of having committed an offence punishable under S. 138 of the Act.

The issue for consideration before the bench was:

Whether the appellant is liable for the offence punishable under S. 138 of the Negotiable Instruments Act?

High Court stated that “having taken note of the fact that the entire amount of compensation awarded by the trial Court has been agreed to be paid to the complainant, this court sees no impediment in accepting the prayer made on behalf of the accused in the petition for compounding of the offence under S. 147 of the Act.”

The bench also relied upon the case of Damodar S. Prabhu V. Sayed Babalal H., wherein Apex Court has held that the court while exercising power under Section 147 of the Act, can proceed to compound the offence even after a recording of conviction by the courts below.

In view of the above, the High Court allowed the appeal and directed the Additional Chief Judicial Magistrate to release the amount of Rs. 66,000/- in favour of the complainant by remitting the same in his savings bank account.

Case Title: Shri Kantu Ram v. Shri Beer Singh

Bench: Justice Sandeep Sharma 

Citation: CR. REVISION NO. 334 OF 2022