HC permits compounding of offence in complaint case under Section 138 N.I. Act after amicable settlement of dispute

Report for theapogee.in by:

Abhishek Srivastava and Shweta Srivastava

Advocates

The Allahabad High Court, has given big relief to those who suffer due to litigation under section 138 NI Act, vide its order dated 13.08.2021. This order has been passed by the Hon’ble High Court in petition under Section 482, CrPC allowing in terms of the compromise arrived at between the parties to the litigation out of court. The conviction and sentence under Section 138 of the NI Act 1991 stands annulled to secure the end of justice as provided under Section 482 CrPC. The petitioner/applicant shall be treated as acquitted on account of compounding of the offence with the complaint/person affected.

The facts of the case in brief are that the petitioner and the opposite party no. 2 in the case had a business relationship and during the course of business the petitioner had issued two cheques each of Rs. 1 lakh in favour of opposite party no. 2 and when he deposited the cheque were bounced due to insufficient funds. The opposite party filed complaint case under section 138 against the petitioner. After completion of the trial the court had convicted the petitioner and sentenced him one year simple imprisonment and fine of Rs. 3 lakh.

The petitioner preferred appeal before Additional Sessions Judge Faizabad, ultimately the appeal got dismissed. The petitioner preferred criminal revision before the Hon’ble High Court which too got dismissed at the admissal stage. After the dismissal of the criminal revision the complainant-opposite party no.2 and the petitioner have entered into settlement. After settlement the petitioner filed petition under Section 482 CrPC and the aforesaid order was passed by the Hon’ble High Court directing the petitioner to pay cost of Rs. 5000/-.

Click here to read the judgement: Section 138 NIAct Rishi Mohan Srivastava vs State of UP