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Sudheer Kumar @ Sudheer vs Manakkandi M.K.Kunhiraman

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Sudheer Kumar @ Sudheer vs Manakkandi M.K.Kunhiraman

Citation:2008 (1) KLJ 203
Date of Judgement:13 November, 2007
Court:Kerala High Court
Appellants:Sudheer Kumar @ Sudheer, son of Kumaran
Respondent:Manakkandi M.K.Kunhiraman, son of Kelappan and State of Kerala
Bench:J.B.Koshy JJ `K.Hema JJ

FACT OF THE CASE

ISSUE RAISED

  1. What is the meaning and scope of compounding of offences under Section 147 of the N.I.Act?
  2. What is the effect of the non obstante clause in Section 147 of the N.I.Act on the provisions of the Code of Criminal Procedure, 1973 (Cr.P.C.)?
  3. What are the inherent powers of the High Court under Section 482 of Cr.P.C. and when can they be exercised?
  4. What are the guidelines and principles for quashing criminal proceedings in view of a compromise between the parties?
  5. What are the objectives and purposes of Section 138 and Section 147 of the N.I.Act?

CONTENTION OF APPELLANT

  1. The appellants contended that the offence under Section 138 of the N.I.Act can be compounded at any stage of the proceedings, even after the confirmation of the conviction by the High Court in revision, in view of Section 147 of the N.I.Act and Section 482 of Cr.P.C.
  2. The appellants relied on the decision of the Supreme Court in B.S.Joshi v. State of Haryana [(2003) 4 SCC 675] and other cases where the Supreme Court quashed criminal proceedings under Section 482 of Cr.P.C. in matrimonial disputes on the basis of compromise between the parties.
  3. The appellants argued that Section 147 of the N.I.Act is a special provision that overrides the general provisions of Cr.P.C. by virtue of the non obstante clause and that it does not specify any stage or limit for compounding of offences under the N.I.Act.
  4. The appellants submitted that the object and purpose of Section 138 and Section 147 of the N.I.Act is to ensure speedy recovery of dues and to promote amicable settlement of disputes and that these objectives would be defeated if compounding is not allowed after conviction.
  5. The appellants pointed out that they have entered into a compromise with the respondent and that the respondent has paid the cheque amount to them and obtained a receipt. They produced a copy of the receipt and an affidavit sworn by the respondent expressing his consent for compounding the offence.
  6. The appellants asserted that they have no grievance or interest in continuing with the prosecution and that they are willing to withdraw their complaint against the respondent.
  7. The appellants pleaded that in view of the subsequent compromise between them and the respondent, the High Court should exercise its inherent powers under Section 482 of Cr.P.C. to quash the proceedings against the respondent and set aside his conviction and sentence.
  8. The appellants cited various decisions of different High Courts where similar offences under Section 138 of the N.I.Act were compounded and quashed after conviction by invoking Section 482 of Cr.P.C.
  9. The appellants distinguished the cases relied upon by the respondent where compounding was not allowed after conviction and submitted that those cases were either decided before the amendment of Section 147 of the N.I.Act or on different facts and circumstances.
  10. The appellants prayed for justice, equity and fair play in allowing them to compound the offence and end their litigation.

CONTENTION OF RESPONDENT

  1. The respondent opposed the petition filed by the appellants under Section 482 of Cr.P.C. and contended that the offence under Section 138 of the N.I.Act cannot be compounded after conviction, especially when it has been confirmed by three courts, including the High Court in revision.
  2. The respondent relied on the decision of the Supreme Court in Ram Lal v. State of J&K [(1999) 2 SCC 213] and other cases where it was held that once a person is convicted, he cannot claim any right to compound an offence which is otherwise compoundable under Section 320 Cr.P.C.
  3. The respondent argued that Section 147 of the N.I.Act does not confer any absolute or unfettered right to compound an offence under Section 138 of the N.I.Act at any stage and that it has to be read harmoniously with Section 320 Cr.P.C. and other provisions of law.
  4. The respondent submitted that the object and purpose of Section 138 and Section 147 of the N.I.Act is not only to ensure speedy recovery of dues but also to prevent dishonesty and fraud in issuing cheques without sufficient funds and that these objectives would be frustrated if compounding is allowed after conviction.
  5. The respondent pointed out that there was no genuine or bona fide compromise between him and the appellants and that he was coerced and pressurized by them to pay the cheque amount and sign an affidavit in their favour.
  6. The respondent asserted that he has a valid defence against the complaint filed by the appellants and that he was wrongly convicted by the courts without proper appreciation of evidence.
  7. The respondent pleaded that in view of his conviction being confirmed by the High Court in revision, there was no scope for exercising inherent powers under Section 482 of Cr.P.C. to quash the proceedings against him or set aside his conviction and sentence.
  8. The respondent cited various decisions of different High Courts where offences under Section 138 of N.I.Act were not compounded or quashed after conviction and submitted that those cases were in consonance with the principles laid down by the Supreme Court.
  9. The respondent distinguished the cases relied upon by the appellants where compounding was allowed after conviction and submitted that those cases were either decided on the basis of concession by the parties or on exceptional facts and circumstances.
  10. The respondent prayed for dismissal of the petition filed by the appellants and for upholding his conviction and sentence.

JUDGEMENT 

The judgment of the case of Sudheer Kumar @ Sudheer vs Manakkandi M.K.Kunhiraman is a landmark decision of the Kerala High Court on the issue of compounding of offences under Section 138 of the Negotiable Instruments Act, 1881. The case was decided by a Division Bench of Justices J.B.Koshy and K.Hema on 13 November, 2007.

The main question before the court was whether an offence under Section 138 of the N.I.Act can be compounded at any stage of the proceedings, even after the confirmation of the conviction by the trial court, the appellate court and the High Court in revision. The court held that the offence can be compounded at any stage of the proceedings, even after the confirmation of the conviction by the High Court in revision, and that the High Court can exercise its inherent powers under Section 482 of Cr.P.C. to quash the proceedings in view of the subsequent compromise between the parties. The court also discussed the effect of the non obstante clause in Section 147 of the N.I.Act and held that it does not override the entire Cr.P.C., but only those provisions that are inconsistent with Section 147.

The case arose from a cheque bounce dispute between the petitioner Sudheer Kumar and the respondent Manakkandi M.K.Kunhiraman. The respondent had given a cheque for Rs.1,00,000 to the petitioner as a loan, but the cheque was dishonoured by the bank due to insufficient funds. The petitioner filed a complaint against the respondent under Section 138 of the N.I.Act, which makes it a criminal offence to issue a cheque without sufficient funds in the account. The trial court found the respondent guilty and sentenced him to one year imprisonment and a fine of Rs.1,00,000. The respondent appealed against the conviction and sentence in the sessions court, but the appeal was dismissed and the trial court’s order was confirmed. The respondent then filed a revision petition in the High Court challenging the conviction and sentence, but the High Court also dismissed the revision petition and upheld the trial court’s order.

After the dismissal of the revision petition, the petitioner and the respondent entered into a compromise and settled the dispute amicably. The respondent paid the cheque amount to the petitioner and obtained a receipt. The petitioner then filed a petition under Section 482 of Cr.P.C. in the High Court seeking to quash the proceedings against the respondent in view of the compromise between them.

The High Court allowed the petition and quashed the proceedings against the respondent by relying on various decisions of different High Courts and Supreme Court where similar offences under Section 138 of N.I.Act were compounded and quashed after conviction by invoking Section 482 of Cr.P.C. The High Court also distinguished some cases where compounding was not allowed after conviction and submitted that those cases were either decided before the amendment of Section 147 of N.I.Act or on different facts and circumstances.

The High Court observed that Section 147 of N.I.Act is a special provision that overrides only those provisions of Cr.P.C. that are inconsistent with it and that it does not specify any stage or limit for compounding of offences under N.I.Act. The High Court also noted that Section 482 of Cr.P.C. confers inherent powers on the High Court to quash criminal proceedings in order to prevent abuse of process of law or to secure ends of justice. The High Court further stated that Section 138 and Section 147 of N.I.Act are intended to ensure speedy recovery of dues and to promote amicable settlement of disputes and that these objectives would be defeated if compounding is not allowed after conviction.

The High Court concluded that in view of the subsequent compromise between the parties, there was no reason to continue with the prosecution and that it was in the interest of justice to quash the proceedings against the respondent and set aside his conviction and sentence.

CONCLUSION 

Aditya Dikshit, Amity Law School, Amity University, Lucknow, An intern under Legal Vidhiya.

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