Full Judgment Text
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2024 INSC 690
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal No(s). 3051 – 3052 of 2024
(@ SLP(Crl.) Nos.9766-9767 of 2024)
(Arising out of D. No.11530 of 2024)
A.S. Pharma Pvt. Ltd.
…. Appellant(s)
Versus
Nayati Medical Pvt. Ltd. & Ors.
…. Respondent(s)
O R D E R
Delay condoned.
Leave granted.
1. These appeals are directed against the judgment dated
13.12.2023 passed by the High Court of Delhi in Criminal
Miscellaneous Case No. 970 of 2023 and Criminal Miscellaneous
Appeal No. 3701 of 2023. The appellant filed Complaint Case No.
5564 of 2022 alleging commission of offence punishable under
Section 138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as the ‘N.I. Act’) against the respondents. On receipt of
the summons, the respondents appeared before the Court and
expressed their readiness to settle the matter by effecting the
payment. An application to permit to compound the offence was
filed under Section 320 of the Code of Criminal Procedure, 1973
(for short, the ‘Cr.P.C.’). The Trial Court dismissed the same as per
Signature Not Verified
Digitally signed by
SNEHA DAS
Date: 2024.09.13
14:06:51 IST
Reason:
order dated 06.02.2023. Aggrieved by the order of the Trial Court,
respondents took up the matter before the High Court challenging
the order dismissing the application for compounding the offence
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under Section 138, N.I. Act also seeking quashment of C.C.
No.5564 of 2022 and all further proceeding thereon in Criminal M.
C. No. 970 of 2023. As per the impugned judgment the High
Court, apparently, exercised the inherent power under Section
482, Cr.P.C., coupled with those under Section 147, N.I. Act, and
ordered thus:-
“17. Accordingly, the present petition is allowed and the
offence of the petitioners/ accused persons in Complaint Case
No.5564/2022 titled A.S. Pharma Pvt. Ltd. vs M/S Nayati
Medical Pvt. Ltd. & Ors. pending before the learned Trial Court
is hereby compounded, albeit subject to the petitioners
depositing before the concerned learned Trial Court the
cumulative cheque(s) amount of Rs.6,50,000/- (Rs. Six Lakhs
fifty thousand only) with 12% simple interest per annum
thereon from the date of cheque(s) return memo i.e.
18.03.2020 till the date of actual payment of the amount as
also a sum of Rs.1,00,000/- Rs. One Lakh only), within a period
of eight weeks. Needless to mention, the amount, if any,
already deposited before the learned Trial Court be adjusted in
the aforesaid sum(s). The respondent/complainant is free to
move an appropriate application for release of the amount
deposited before the learned Trial Court in above terms.”
2. Heard the learned counsel appearing for the appellant and
the learned counsel appearing for the respondents.
3. The core contention of the appellant is that an offence under
Section 138 of the N.I. Act is not compoundable under Section 320
Cr.P.C., and in such circumstances, the application was rightly
dismissed by the Trial Court. Ergo, invoking the power under
Section 482 Cr.P.C., coupled with those under Section 147, N.I. Act,
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the High Court ought not to have compounded the offence without
the consent of the appellant.
4. Per contra, the learned counsel appearing for the respondents
submitted that when the indisputable position is that the offence
under Section 138 of the N.I. Act is compoundable under Section
147 of the N.I. Act, no palpable illegality could be attributed to the
action in invoking the power under Section 482, Cr.P.C, coupled
with the power under Section 147, N.I. Act to compound the
offence. The said contention of the respondents was resisted by
the learned counsel for the appellant contending that for
compounding the offence, consent of the complainant is required.
Sans consent from the complainant, the High Court was not
justified in compounding of the offence under Section 138, N.I. Act,
it is further contended.
5. A perusal of the impugned order would reveal that though the
High Court entertained the challenge against the order rejecting
an application for compounding the offence under Section 138, N.I.
Act filed under Section 320 Cr.P.C., the High Court actually
compounded the offence invoking its inherent power under Section
482 Cr.P.C., coupled with the power under Section 147 of the N.I.
Act. To consider the legality and correctness of the said exercise of
power, it is imperative to understand the scope of Section 482,
Cr.P.C, as also Section 147 of the N.I. Act. Section 482, Cr.P.C.,
reads thus: -
“482. Saving of inherent powers of High Court. — Nothing in
this Code shall be deemed to limit or affect the inherent
powers of the High Court to make such orders as may be
necessary to give effect to any order under this Code, or to
prevent abuse of the process of any Court or otherwise to
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secure the ends of justice.”
6. In the decision in Monica Kumar (Dr.) v. State of Uttar
Pradesh [(2008) 8 SCC 781] , this Court held that the inherent
jurisdiction under Section 482, Cr.P.C, would be exercised
sparingly, carefully and with caution and only when such exercise
is justified by the tests specifically laid down in the Section itself
viz., to give effect to any order under Cr.P.C., or to prevent abuse
of process of any Court or otherwise to secure the ends of justice.
7. In the decision in Arvind Barsaul (Dr.) v. State of M.P.
[(2008) 5 SCC 794] , this Court held that though offence under
Section 498A, IPC is not compoundable, but when parties have
compromised, continuance of proceedings would be an abuse of
process of law and hence, could be quashed on a petition filed
under Section 482, Cr.P.C. We referred to this decision to show
that when the parties are ad idem for discontinuance of criminal
proceedings which are not of grave nature, power under Section
482, Cr.P.C. is exercisable.
8. Now, we will refer to Section 147 of the N.I. Act and it reads
thus: -
“147. Offence to be compoundable-
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), every offence punishable under
this Act shall be compoundable.”
9. Thus, a bare perusal of Section 482, Cr.P.C., and Section 147,
N.I. Act would reveal they are different and distinct. The former
being the inherent power of High Court exercisable even suo motu
to give effect to any order under Cr.P.C., or to prevent abuse of the
process of any court or otherwise to secure the ends of justice.
However, the provision for compounding every offence punishable
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under the N.I. Act, under Section 147, N.I. Act, is not a power
available to a Court to exercise without the consent of the
complainant. We will dilate on this aspect a little later.
10. Now, in the context of the rival contentions, it is worthwhile to
note that by the combined exercise of powers under Section 482,
Cr.P.C., and Section 147, N.I. Act, the High Court, has actually
compounded the offence, under Section 138, N.I. Act, despite the
non-consent of the complainant/ appellant herein therefor.
Contextually, it is relevant to refer to paragraph 102 (6) of the
decision of this Court in State of Haryana v. Bhajan Lal (AIR
1992 SC 604) , which reads thus: -
“Where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a
criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a specific
provision in the code or the concerned Act, providing
efficacious redress for the grievance of the aggrieved party.”
(underline supplied)
11. It is thus well-neigh settled position that the inherent powers
under Section 482, Cr.P.C., are invocable when no other efficacious
remedy is available to the party concerned and not where a
specific remedy is provided by the statute concerned. We may
further add here that certainly the power under Section 482,
Cr.P.C., is not invocable, ignoring the factor which is sine qua non
for the exercise of power to compound the offence(s) under N.I.
Act viz., the consent of the complainant.
12. Before delving into the question whether consent of the
complainant, who is to compound the offence, is required to
exercise the power under Section 147, N.I. Act, it is only
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appropriate to refer to paragraphs 12 and 13 of the impugned
judgment of the High Court. They read thus: -
“12. Broadly speaking, in the considered opinion of this Court,
the essence of all the aforesaid pronouncements by the
Hon’ble Supreme Court coupled with Section 138 of the N.I. Act
read together with the other provisions of the N.I. Act is that
the consent of the complainant is not mandatory at the time of
compounding of the offence under Section 138 of the N.I. Act,
once the complainant has been equitably compensated.
13. In effect, whence the complainant has been reasonably
compensated the accused can be discharged/ acquitted even
without the consent of the complainant, in the interest of
justice and to prevent the abuse of the process of law, since
once an accused accepts his liability to pay the cheque
amount, there will be no fruitful purpose in keeping the
complaint alive.”
(Underline supplied)
13. Having gone through the factual matrix of the case on hand
and the afore-extracted paragraph Nos. 12 and 13 of the
impugned judgment, we are of the considered view that the
understanding and exposition of law by the High Court on the
question of invocation of the power under Section 482, Cr.P.C., and
Section 147, N.I. Act to compound the offence under Section 138,
N.I. Act, run contrary to the law enunciated by this Court on the
said question. In the light of the decisions of this Court in
Damodar S. Prabhu v. Sayed Babalal H. [(2010) 5 SCC 663],
K.M. Ibrahim v. K.P. Mohammed & Anr. [(2010) 1 SCC 798]
and O.P. Dholakia v. State of Haryana & Anr. [(2000) 1 SCC
762] , there cannot be any doubt with regard to the position that
offence under Section 138, N.I. Act could be compounded under
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Section 147, N.I. Act, at any stage of the proceedings.
14. As relates the requirement of ‘consent’ for compounding
offence under Section 138, N.I. Act, by invoking the power under
Section 147, N.I. Act, it is to be noted that the question is no
longer res integra . This Court in the decision in JIK Industries
Ltd. & Ors v. Amarlal V.Jumani & Anr. [(2012) 3 SCC 255]
declined to accept the contention that in view of the non-obstante
clause in Section 147, NI Act, which is a special statute, the
requirement of consent of the person compounding the offence
under Section 138, N.I. Act, is not required. After extracting
provision under Section 147, N.I. Act, this Court in JIK Industries
Ltd. case (supra) observed and held in paragraph 58 and 59
thereof thus: -
“58. Relying on the aforesaid non obstante clause in Section
147 of the NI Act, the learned counsel for the appellant argued
that a three-Judge Bench decision of this Court
in Damodar [(2010) 5 SCC 663], held that in view of non
obstante clause in Section 147 of the NI Act, which is a special
statute, the requirement of consent of the person compounding
in Section 320 of the Code is not required in the case of
compounding of an offence under the NI Act.
59. This Court is unable to accept the aforesaid contention for
various reasons which are discussed below.”
15. In the contextual situation it is relevant to refer to a recent
decision of this Court in Raj Reddy Kallem v. The State of
Haryana & Anr. [2024 INSC 347] . The said decision would
reveal that this Court took note of earlier decisions of this Court in
JIK Industries Ltd. case (supra) as also in the decision in Meters
and Instruments Private Ltd. & Anr. V. Kanchan Mehta
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[(2018) 1 SCC 560] and in un-ambiguous terms held that for
compounding the offence under Section 138, N.I. Act, ‘consent’ of
the complainant is required. In Kanchan Mehta’s case (supra)
even after referring to the decision in JIK Industries ltd. case
(supra) this Court held that even in the absence of ‘consent’ Court
could close criminal proceedings against an accused in a case
under Section 138, N.I. Act, if the accused had compensated the
complainant. It was held therein thus: -
18.3. Though compounding requires consent of both parties,
even in absence of such consent, the court, in the interests of
justice, on being satisfied that the complainant has been duly
compensated, can in its discretion close the proceedings and
discharge the accused.
16. But then, it is to be noted that later a five-Judge Constitution
Bench in Expeditious Trial of Cases Under Section 138, N.I.
Act, 1881, In re, (2021) 16 SCC 116 held that observation in
Kanchan Mehta’s decision giving discretion to the trial Court “to
close the proceedings and discharge the accused” , by reading
Section 258, Cr.P.C., which confers the power to stop proceeding in
certain cases, ‘not a good law’. In Raj Reddy Kallem’s case (supra),
after referring to the above positions this Court further observed
that even in Kanchan Mehta’s case (supra) nowhere it was
contemplated that ‘compounding’ could be done without the
‘consent’ of the parties. It is worthwhile to note at this juncture
that in Raj Reddy Kallem’s case this Court drew nice distinction
between ‘quashing of a case’ and ‘compounding an offence’. To
drive that point home, this Court referred to the decision in JIK
Industries Ltd. case (supra), where this Court distinguished the
quashing of a case from compounding as hereunder: -
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“Quashing of a case is different from compounding. In
quashing, the Court applies it but in compounding it is primarily
based on consent of the injured party. Therefore, the two
cannot be equated.”
17. It is in the aforesaid circumstances that we held that the
question whether the offence under Section 138, N.I. Act could be
compounded invoking the power under Section 147, N.I. Act,
without consent of the complainant concerned, is no longer res
integra. In short, the position is ‘that an offence under Section 138,
N.I. Act could be compounded under Section 147 thereof, only with
the consent of the complainant concerned’. In that view of the
matter, the impugned judgment of the High Court wherein despite
the absence of the consent of the appellant-complainant
compounded the offence under Section 138, N.I. Act, on the
ground that the appellant was equitably compensated, could not
be sustained.
18. In the context of the issues involved another aspect of the
matter also requires consideration. The decision in Raj Reddy
Kallem’s case (supra), also stands on a similar footing inasmuch as
the complainant therein was duly compensated by the accused
but the complainant did not agree for compounding the offence.
After observing that, Courts could not compel the complainant to
give consent for compounding the offence under Section 138, N.I.
Act, this Court in Raj Reddy Kallem’s case (supra) took note of the
peculiar factual situation obtained and invoked the power under
Section 142 of the Constitution of India to quash the proceeding
pending against the appellant-accused under Section 138, N.I. Act.
True that in Raj Reddy Kallem’s case it was despite the non-
consent of the complainant-respondent that the proceedings were
quashed against the appellant therein, inter alia , taking note of the
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fact that the accused therein had compensated the complainant
and furthermore deposited the additional amount, as has been
ordered by this Court. We have no doubt in holding that merely
because taking into account such aspects and circumstances this
Court ‘quashed’ the proceedings by invocation of the power under
Article 142 of the Constitution of India, cannot be a reason for
‘compounding’ an offence under Section 138, N.I. Act, invoking the
power under Section 482, Cr.P.C. and the power under Section 147,
N.I. Act, in the absence of consent of the complainant concerned in
view of the decision referred hereinbefore. In this context, this is
to be noted that the fact that this Court quashed the proceedings
under Section 138, N.I. Act, invoking the power under Article 142
of the Constitution of India can be no reason at all for High Courts
to pass an order quashing proceeding under Section 138, N.I. Act,
on the similar lines as the power under Article 142 of the
Constitution of India is available only to the Supreme Court of
India. In this context it is relevant to refer to the three-Judge
Bench of this Court in State of Punjab & Ors. v. Surinder
Kumar & Ors. [(1992) 1 SCC 489] , this Court in paragraph 6 to
8 therein held thus: -
6. A decision is available as a precedent only if it decides a
question of law. The respondents are, therefore, not entitled to
rely upon an order of this Court which directs a temporary
employee to be regularised in his service without assigning
reasons. It has to be presumed that for special grounds which
must have been available to the temporary employees in those
cases, they were entitled to the relief granted. Merely because
grounds are not mentioned in a judgment of this Court, it
cannot be understood to have been passed without an
adequate legal basis therefor. On the question of the
requirement to assign reasons for an order, a distinction has to
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be kept in mind between a court whose judgment is not subject
to further appeal and other courts. One of the main reasons for
disclosing and discussing the grounds in support of a judgment
is to enable a higher court to examine the same in case of a
challenge. It is, of course, desirable to assign reasons for every
order or judgment, but the requirement is not imperative in the
case of this Court. It is, therefore, futile to suggest that if this
Court has issued an order which apparently seems to be similar
to the impugned order, the High Court can also do so. There is
still another reason why the High Court cannot be equated with
this Court. The Constitution has, by Article 142, empowered the
Supreme Court to make such orders as may be necessary “for
doing complete justice in any case or matter pending before
it”, which authority the High Court does not enjoy. The
jurisdiction of the High Court, while dealing with a writ petition,
is circumscribed by the limitations discussed and declared by
the judicial decisions, and it cannot transgress the limits on the
basis of whims or subjective sense of justice varying from
Judge to Judge.
7. It is true that the High Court is entitled to exercise its judicial
discretion in deciding writ petitions or civil revision applications
but this discretion has to be confined in declining to entertain
petitions and refusing to grant relief, asked for by petitioners,
on adequate considerations; and it does not permit the High
Court to grant relief on such a consideration alone.
8. We, therefore, reject the argument addressed on behalf of
the respondents that the High Court was entitled to pass any
order which it thought fit in the interest of justice. Accordingly,
we set aside the impugned order and allow the appeal, but in
the circumstances without costs.
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19. The upshot of the discussion is that the High Court had
clearly fallen in error in invoking the power under Section 482,
Cr.P.C., as also the power under Section 147, N.I. Act, to compound
the offence under Section 138 of the N.I. Act qua the respondent-
accused. Hence, the impugned judgment to the extent it
compounded the offence under Section 138, N.I. Act invoking the
inherent power under Section 482, Cr.P.C. and the power under
Section 147, N.I. Act stands quashed and set aside.
20. However, the position is that the respondents have, by now,
deposited an amount of Rs. 6,50,000/- along with 12% simple
interest per annum from the date of cheque till the date of actual
payment besides a sum of Rs. 1 lakh payable additionally, as
ordered under the impugned judgment before the trial court.
Therefore, the amount is available to be withdrawn by the
appellant-complainant.
21. In view of the peculiar position thus obtained with respect to
the deposit of the amount payable under the impugned judgment,
the fact that the dishonored cheque Nos.17632 dated 19.01.2020
and 17633 dated 09.02.2020 were respectively for Rs.3,00,000/-
and Rs.3,50,000/- and the further fact that upon receiving the
summons, the respondent-accused have expressed their readiness
to effect the payment and to settle the matter, we are of the
considered view that there is no point in restoring the proceedings
and to permit their continuance before the trial Court, though we
have set aside the impugned judgment to the extent it
compounded the offence under Section 138, of the N.I. Act,
invoking the power under Section 482, Cr.P.C., and Section 147,
N.I. Act. Hence, despite the lack of consent from the appellant-
complainant, we found that it is a befitting case to invoke the
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power of this Court under Article 142 of the Constitution of India to
do complete justice between the parties and to quash Complaint
Case No.5564 of 2022 as also all proceedings emerging therefrom.
Hence, Complaint Case No. 5564 of 2022, pending before the
Court of MM (N.I. Act), Digital Court-02/SED, Saket District Courts
and all the further proceedings therefrom stand set aside and
quashed. The appellant-complainant will be entitled to withdraw,
in accordance with law, entire amount in deposit before the trial
Court viz., Rs.6,50,000/- along with 12% simple interest per annum
from the date of the cheque in question till the date of actual
payment along with the additionally paid Rs.1,00,000/-. We make
it clear that observations, if any, made in this case are solely for
the purpose of deciding the captioned appeals.
22. The appeals stand disposed of on the above terms.
Pending application(s), if any, shall stand disposed of.
.……………………...J.
[C.T. Ravikumar]
……………………...J.
[Sanjay Karol]
New Delhi;
July 23, 2024.
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ITEM NO.15 COURT NO.12 SECTION II-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
SPECIAL LEAVE PETITION (CRIMINAL)…………………. Diary No. 11530/2024
(Arising out of impugned final judgment and order dated 13-12-2023
in CRLMC No. 970/2023 and 13-12-2023 in CRLMA No. 3701/2023 passed
by the High Court Of Delhi At New Delhi)
A.S. PHARMA PVT LTD Petitioner(s)
VERSUS
NAYATI MEDICAL PVT LTD & ORS. Respondent(s)
(FOR ADMISSION and I.R. and IA No.112908/2024-EXEMPTION FROM FILING
C/C OF THE IMPUGNED JUDGMENT and IA No.112909/2024-CONDONATION OF
DELAY IN REFILING / CURING THE DEFECTS )
Date : 23-07-2024 These matters were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE C.T. RAVIKUMAR
HON'BLE MR. JUSTICE SANJAY KAROL
For Petitioner(s) Mr. Vimit Trehan, Adv.
Mr. Dhruv Dwivedi, Adv.
Mr. Ravi Bharuka, AOR
For Respondent(s) Mr. Giriraj Subramanium, Adv.
Mr. Simarpal Singh Sawhney, Adv.
Mr. Siddhant Juyal, Adv.
Mr. Veda Singh, Adv.
Mr. Ravi Pathak, Adv.
Simar Singh Sawhney, Adv.
Mr. Akhilesh Talluri, Adv.
Mr. Joy Banarjee, Adv.
Ms. Urvarshi Singh, Adv.
Mr. Aditya Singh, AOR
UPON hearing the counsel the Court made the following
O R D E R
Delay condoned.
Leave granted.
The present appeals are disposed of in terms
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of the signed reportable order which is placed on the
file.
Pending application(s), if any, shall stand
disposed of.
(SNEHA DAS) (MATHEW ABRAHAM)
SENIOR PERSONAL ASSISTANT COURT MASTER (NSH)