Complainant’s Consent Crucial for Compounding Offences Under N.I. Act, Rules High Court

High Court dismisses petition, affirms that complainant’s consent is essential for compounding under Section 147 of the Negotiable Instruments Act.

The High Court of Punjab and Haryana at Chandigarh has reaffirmed the requirement of the complainant’s consent for the compounding of offences under Section 138 of the Negotiable Instruments Act (N.I. Act). The bench, led by Justice Kuldeep Tiwari, dismissed a criminal revision petition (CRM-M-22823-2024) filed by Surinder Kumar Bindal and another against Satinder Nath Radhey Shyam and Sons. The petition challenged the Additional District Judge’s order which refused to compound the offence due to the lack of the complainant’s consent.

The case arose from a complaint filed by Satinder Nath Radhey Shyam and Sons under Section 138 read with Section 142 of the N.I. Act, following the dishonor of a cheque issued by the petitioners. The trial culminated in the conviction of the petitioners, who were sentenced to two years of imprisonment and directed to pay Rs. 25,00,000 each as compensation. During the pendency of their appeal, the petitioners sought to compound the offence under Section 147 of the N.I. Act, which was denied by the appellate court due to the complainant’s refusal.

1. Necessity of Complainant’s Consent:

The High Court reiterated that the consent of the complainant is essential for the compounding of offences under Section 138 of the N.I. Act. Justice Kuldeep Tiwari observed, “The consent of the complainant is an integral part of the compounding process under Section 147 of the N.I. Act. The courts cannot override this requirement.”

Legal Reasoning and Precedent:

The judgment referenced several Supreme Court rulings, including the landmark cases of M/s Meters and Instruments Pvt. Ltd. V. Kanchan Mehta and Damodar S. Prabhu v. Sayed Babalal H., emphasizing the necessity of consent for compounding. The court distinguished these cases, noting that subsequent Supreme Court decisions have clarified that compounding without consent is not permissible.

Inapplicability of Section 482 Cr.P.C.:

The court rejected the petitioners’ attempt to invoke Section 482 of the Code of Criminal Procedure (Cr.P.C.) to compound the offence without the complainant’s consent. Justice Tiwari remarked, “Section 482 Cr.P.C. cannot be used to circumvent the mandatory requirement of the complainant’s consent under Section 147 of the N.I. Act.”

Justice Kuldeep Tiwari stated, “The recent Supreme Court ruling in Raj Reddy Kallem unequivocally reaffirms that consent is a fundamental aspect of compounding under the N.I. Act. Without it, the jurisdiction of the court to compound the offence is restricted.”

The High Court’s decision reinforces the legal framework surrounding the compounding of offences under the N.I. Act, highlighting the indispensable role of the complainant’s consent. This judgment is expected to have significant implications for future cases, ensuring strict adherence to the statutory requirements and maintaining the integrity of the compounding process.

Date of Decision: 18^th May 2024

Surinder Kumar Bindal and Another v. Satinder Nath Radhey Shyam and Sons