The Supreme Court recently urged courts to encourage compounding of cheque bouncing offences under the Negotiable Instruments Act, 1882 (NI Act), if parties are willing to do so [M/S New Win Export and Another v. A Subramaniam]..A Bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah observed,"It is to be remembered that dishonour of cheques is a regulatory offence which was made an offence only in view of public interest so that the reliability of these instruments can be ensured. A large number of cases involving dishonour of cheques are pending before courts which is a serious concern for our judicial system. Keeping in mind that the ‘compensatory aspect’ of remedy shall have priority over the ‘punitive aspect’, courts should encourage compounding of offences under the NI Act if parties are willing to do so.".In the instant case, the respondent had filed a complaint under Section 138 of the NI Act. The trial court convicted the appellants and sentenced them to one year of simple imprisonment each. The appellants were later exonerated by the appellate court. However, on appeal by the complainant, the High Court revived the conviction of the appellants, who then moved the apex court.The Court set aside the conviction of the appellants on learning that a settlement had been arrived at between the parties..In its analysis, the top court noted that Section 147 of the NI Act allows for the compounding of offences. It also took note that under Section 320(5) of the Code of Criminal Procedure, 1973, compounding after conviction requires the leave of the court where the appeal is pending.Considering the settlement to be genuine on all counts, the Court proceeded to set aside the conviction of the appellants..Advocates M Yogesh Kanna, K Paari Vendhan and Manoj Kumar A appeared for the appellants.Advocates Sudhakar Rajendran and Vairawan A appeared for the respondent..[Read Order]
The Supreme Court recently urged courts to encourage compounding of cheque bouncing offences under the Negotiable Instruments Act, 1882 (NI Act), if parties are willing to do so [M/S New Win Export and Another v. A Subramaniam]..A Bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah observed,"It is to be remembered that dishonour of cheques is a regulatory offence which was made an offence only in view of public interest so that the reliability of these instruments can be ensured. A large number of cases involving dishonour of cheques are pending before courts which is a serious concern for our judicial system. Keeping in mind that the ‘compensatory aspect’ of remedy shall have priority over the ‘punitive aspect’, courts should encourage compounding of offences under the NI Act if parties are willing to do so.".In the instant case, the respondent had filed a complaint under Section 138 of the NI Act. The trial court convicted the appellants and sentenced them to one year of simple imprisonment each. The appellants were later exonerated by the appellate court. However, on appeal by the complainant, the High Court revived the conviction of the appellants, who then moved the apex court.The Court set aside the conviction of the appellants on learning that a settlement had been arrived at between the parties..In its analysis, the top court noted that Section 147 of the NI Act allows for the compounding of offences. It also took note that under Section 320(5) of the Code of Criminal Procedure, 1973, compounding after conviction requires the leave of the court where the appeal is pending.Considering the settlement to be genuine on all counts, the Court proceeded to set aside the conviction of the appellants..Advocates M Yogesh Kanna, K Paari Vendhan and Manoj Kumar A appeared for the appellants.Advocates Sudhakar Rajendran and Vairawan A appeared for the respondent..[Read Order]