In a very significant judgment with far reaching implications, we see that the Himachal Pradesh High Court at Shimla in a most learned, laudable, landmark, logical and latest oral judgment titled Satvir Singh vs Rajesh Pathania & Ors in Cr.MMO No.674 of 2024 and cited in Neutral Citation: 2024:HHC:5757 that was pronounced on 19.07.2024 has quashed and set aside the judgment of conviction and decided to compound the offence under Section 138 of the Negotiable Instruments Act, 1881 after the accused settled with the complainant. It must be noted that to arrive at this decision, the Shimla High Court relied and banked on the leading affirmative decision of the Apex Court in Damodar S Prabhu V. Sayed Babalal H. (2010) 5 SCC 663, where according to the Court it was held that the Court, while exercising power under Section 147 of the Act, can proceed to compound the offence even after recording of conviction by the Courts below. It was thus made explicitly clear by the Shimla High Court that under Section 147 of the Negotiable Instruments Act, 1881, offences can be compounded even after recording of a conviction by the Court.

It must be also disclosed here that the Single Judge Bench comprising of Hon’ble Mr Justice Sandeep Sharma delivered this brilliant oral judgment while hearing a petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, read with Section 147 of the Negotiable Instruments Act. We thus see quite distinctly that the Shimla High Court permitted the parties to get the matter compounded in the light of the compromise in this leading judgment. The petition was thus finally disposed of by the Shimla High Court.

At the very outset, this brief, brilliant, bold and balanced oral judgment authored by the Single Judge Bench comprising of Hon’ble Mr Justice Sandeep Sharma sets the ball in motion by first and foremost putting forth in para 1 that:
By way of instant petition filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, read with Section 147 of the Negotiable Instruments Act, (hereinafter referred to as Act) prayer has been made on behalf of the petitioner, for compounding the offence committed by the petitioner under Section 138 of the Act and set aside judgment of conviction and order of sentence dated 02.12.2021/04.12.2021 in criminal case No.4-3 of 2018, titled as Rajesh Pathania Vs. Satvir Singh, passed by learned Judicial Magistrate First Class, Court No.3, Shimla, District Shimla, Himachal Pradesh, whereby Court below, while holding petitioner/accused (hereinafter, accused), guilty of having committed offence punishable under Section 138 of the Act, convicted and sentenced him to undergo simple imprisonment for a period of one year and six months and pay compensation to the tune of Rs.1,90,000/- to the respondent/complainant (hereinafter, complainant).

To put things in perspective, the Bench envisages in para 2 while elaborating on the facts of the case that:
Precisely, the facts of the case as emerge from the record are that complainant instituted proceedings under Section 138 of the Act in the Court of learned Judicial Magistrate First Class, Court No.3, Shimla, District Shimla, Himachal Pradesh, alleging therein that in the month of March 2017, accused borrowed a sum of Rs.95,000/- from complainant for his personal needs and thereafter, with a view to discharge his liability issued post dated Cheque bearing No.561718 dated 05.08.2017 amounting to Rs.95,000/-, against the account, maintained by him with the Punjab & Sind Bank, Branch Office Sanjauli, District Shimla, Himachal Pradesh, however, fact remains that the aforesaid Cheque was dishonoured on account of insufficient funds. Since despite having received legal notice, petitioner-accused failed to make good the payment within the time stipulated, complainant was compelled to initiate proceedings before the competent Court of law under Section 138 of the Act.

As it turned out, the Bench enunciates in para 3 that:
Learned trial Court on the basis of material adduced on record by the respective parties, vide judgment of conviction dated 02.12.2021 and order of sentence dated 04.12.2021, held the petitioner-accused guilty of having committed offence punishable under Section 138 of the Act and accordingly, convicted and sentenced him, as per description given hereinabove.

As we see, the Bench then discloses in para 4 that:
Being aggrieved and dissatisfied with the aforesaid judgment of conviction recorded by the Court below, accused preferred an appeal in the Court of learned Sessions Judge, Shimla, Himachal Pradesh, which also came to be dismissed vide judgment dated 11.04.2022. Petitioner/accused further laid challenge to the aforesaid judgment before this Court in Criminal Revision Petition bearing No.340 of 2022, which also came to be dismissed by this Court vide judgment dated 29.05.2023, as a consequence of which, judgment of conviction recorded by the learned trial Court came to be upheld. However, pursuant to dismissal of Criminal Revision Petition No.340 of 2022, before petitioner/accused could be arrested, he entered into compromise with the complainant, whereby petitioner-accused settled the matter with the respondent/complainant for a sum of Rs.1,20,000/- as full and final settlement to the complainant. In the aforesaid background, petitioner has approached this Court in the instant proceedings for compounding the offence, alleged to have been committed by him and for setting aside the judgment of conviction and order of sentence recorded by Court below.

Do note, the Bench notes in para 5 that:
While putting in appearance on behalf of respondent/complainant, Mr. Hamender Chandel, Advocate, fairly admits factum with regard to receipt of Rs.1,20,000/- in terms of amicable settlement arrived inter se parties. He states that since amount agreed to be paid in terms of amicable settlement stands received by respondent/complainant, he shall have no objection in compounding the offence.

Be it noted, the Bench notes in para 6 stipulating that:
Though parties have resolved to settle their dispute amicably inter se them, but now question which requires to be decided at the first instance is whether this court after upholding the judgment of conviction and order of sentence recorded by the court below can proceed to review its own judgment dated 29.05.2023, whereby criminal revision petition having been filed by the petitioner accused came to be dismissed or not?.

Briefly stated, it is worth noting that the Bench notes in para 7 that:
This Court vide judgment passed in Cr.MP No. 1197 of 2017 in Cr. Revision No. 394 of 2015 titled Gulab Singh v. Vidya Sagar Sharma, while relying upon judgment of Hon’ble Apex Court as well as other Constitutional Courts has already held that court, while exercising power under Section 147 of Act can proceed to compound offence even in those cases, where accused stands convicted. Relevant portion of the order passed by this Court in case (supra) is reproduced as under:

8. Before acceding to aforesaid joint request having been made by learned counsel for the respective parties, moot question arise for determination of this Court is whether it has power to review/recall its own order/judgment passed in Criminal Revision No.394 of 2015, wherein judgment of conviction recorded by both the Courts below came to be upheld. 9. Mr. Manohar Lal Sharma, learned counsel representing the petitioner, has invited attention of this Court to the judgment passed by Hon’ble High Court of Rajasthan in Naresh Kumar Sharma versus State of Rajasthan & another, Criminal Misc. Application No.371 of 2016 in Criminal Revision Petition No.1267 of 2016, to suggests that in view of amicable settlement arrived inter se the parties, this Court has power to recall its judgment in the light of the provisions contained in Section 147 of the Act, which permits compounding of the offence under Section 138 of the Act.

11. The Apex Court in K. Subramanian Vs. R.Rajathi; (2010)15 Supreme Court Cases 352, also in similar situation ordered for compounding of offence after recording of conviction by the courts below.

Most significantly and so also most remarkably, the Bench then encapsulates in para 8 what constitutes the cornerstone of this notable judgment postulating that:
Since in the case at hand, petitioner after being convicted under Section 138 of the Act has compromised the matter with the respondent complainant and in terms thereof has already paid sum of Rs.1,20,000/- to the complainant, prayer for compounding the offence can be accepted in terms of judgment passed by the Hon’ble Apex Court in Damodar S. Prabhu V. Sayed Babalal H. (2010) 5 SCC 663, wherein it has been categorically held that court, while exercising power under Section 147 of the Act, can proceed to compound the offence even after recording of conviction by the Courts below. Hon’ble Apex Court in K. Subramanian v. R. Rajathi represented by P.O.A.P. Kaliappan, 2010 (15) SCC 352, has held that in view of the provisions contained under Section 147 of the Act read with Section 320 of Cr.PC, compromise arrived can be accepted even after recording of the judgment of conviction.

As a corollary, the Bench then directs in para 9 holding that:
Consequently, in view of the detailed discussion made hereinabove as well as law laid down by the Hon’ble Apex Court, parties are permitted to get the matter compounded in the light of the compromise arrived inter se them. Accordingly, judgment of conviction and sentence recorded by the learned trial court is quashed and set aside and petitioner is acquitted of the charge framed against him. The petition is disposed of alongwith pending applications, if any.

Finally and for sake of clarity, the Bench then concludes by clarifying in para 10 that:
The parties are permitted to produce copy of order downloaded from the High Court website before the officer concerned, however, if required, order can be verified from the High Court website or otherwise.

All told, we thus see that the Himachal Pradesh High Court has made it indubitably clear that the court while exercising the power under Section 147 of the Negotiable Instrument Act can compound the offence even after the recording of the conviction by the courts below. The petitioner thus very rightly stood acquitted in this leading case. No denying it!

Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut - 250001, Uttar Pradesh