Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
2024 INSC 535
CRIMINAL APPEAL NO. 2948 OF 2024
(Arising out of SLP (CRL.) NO.9033 OF 2024
@ Dy. No. 6463/2024)
M/S. NEW WIN EXPORT & ANR. …APPELLANT (S)
VERSUS
A. SUBRAMANIAM …RESPONDENT(S)
O R D E R
Leave granted.
2. This case arises from a complaint under Section 138 Negotiable
Instruments Act filed by the respondent/complainant. In the year
2006, appellant no.2 had borrowed a loan of Rs.5,25,000 from the
respondent but did not repay as promised. To discharge the said debt,
the appellant no.2 gave a cheque of Rs.5,25,000 which was issued in
the name of his partnership firm i.e., appellant no.1 (M/s New Win
Export). Since the cheque was dishonoured due to ‘insufficient funds’,
Signature Not Verified
respondent filed a complaint under Section 138 NI Act against the
Digitally signed by
Rajni Mukhi
Date: 2024.07.18
16:57:53 IST
Reason:
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appellants where the Trial Court vide order dated 16.10.2012
convicted the appellants and imposed a sentence of 1 year of simple
imprisonment each. The appellants challenged their conviction before
the Appellate Court, which reversed the findings of the Trial Court and
acquitted the appellants. Finally, when the matter was taken to the
High Court at the instance of the respondent/complainant, the High
Court in its order dated 01.04.2019 set-aside the order of the Appellate
Court and restored the order of the Trial Court, convicting the
appellants. Now, the appellants are before this Court.
3. We have been apprised at the bar that before filing the present
appeal, appellants and respondent-complainant had entered into a
settlement agreement dated 27.01.2024. We have perused the
settlement document and from the terms of the agreement, it is clear
that the parties have settled the dispute among themselves. As per the
agreement, the appellants have paid Rs.5,25,000 to the respondent-
complainant, who has agreed to settle the present matter for the said
amount. Also, the complainant does not have any objection if the
conviction of the appellants is set aside. The relevant portion of the
said settlement agreement is reproduced below where the expression
‘First Party’ is used for the respondent-complainant and accused-
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appellant has been called as the ‘Second Party’:
“…..The First Party and the second Party had
agreed to settle their dispute between them at
a final settlement of Rs.5,25,000/ - (Five
Lakhs and twenty five thousand only) and
the First party had. received a sum of
Rs.5,25,000/ (Five Lakhs and. twenty five
thousand only) by way of Demand draft
dated 08.12.2023 bearing No.135744 drawn
on Union Bank, Perunthozhuvu Branch
received from the second party.
5. The First Party agrees to accept the final
settlement amount of Rs.5,25, 000/ - (Five
Lakhs and twenty five thousand only) and
the First Party had received the sum of
Rs.5,25,000/- (Five Lakhs and twenty five
thousand only) from the Second party as
mentioned above.
6. After the execution of the present
Settlement Agreement, the Second Party is
intending to file a Special Leave Petition
before the Honourable Supreme Court of India
and the First Party agrees to support the
Special Leave Petition filed by the Second
Party, in order to enable the Hon'ble Supreme
Court of India to pass appropriate order as
the Hon'ble supreme Court may deem it fit
and proper in the facts and circumstances of
the present.
7. The First Party will have no objection if the
conviction of the Second Party is set aside by
the Hon'ble Supreme Court of India.”
4. Section 147 of the Negotiable Instruments Act, 1881 makes all
offences under NI Act compoundable offences. In our opinion, this
settlement agreement can be treated to be compounding of the offence.
All the same, Section 320 (5) of CrPC provides that if compounding
has to be done after conviction, then it can only be done with the leave
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of the Court where appeal against such conviction is pending.
5. In cases where the accused relies upon some document for
compounding the offence at the appellate stage, courts shall try to
check the veracity of such document, which can be done in multiple
ways. For the same, in the present matter, this Court vide order dated
18.03.2024 had asked the respondent-complainant to file an affidavit
to bring on record whether or not any compromise has been reached
between the parties. In compliance with the said order, the
respondent-complainant has filed before us an affidavit dated
27.03.2024 supporting the case of the appellants wherein it is
admitted that the accused have paid the amount to the satisfaction of
the complainant and further it is said that he has no objection if
conviction of the appellants is set aside. Now, when the accused and
complainant have reached a settlement permissible by law and this
Court has also satisfied itself regarding the genuineness of the
settlement, we think that the conviction of the appellants would not
serve any purpose and thus, it is required to be set aside.
6. At this juncture, we would also like to reiterate a few words
regarding the principles of compounding of offences in the context of
NI Act. It is to be remembered that dishonour of cheques is a
regulatory offence which was made an offence only in view of public
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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. (See: Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC
1 2
663 , Gimpex Private Limited v. Manoj Goel (2022) 11 SCC 705 ,
Meters And Instruments Private Limited And Anr. v. Kanchan
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Mehta (2018) 1 SCC 560 )
7. In Raj Reddy Kallem v. The State of Haryana & Anr. [2024] 5
S.C.R 203 , this Court followed the same principles and quashed a
conviction under the NI Act, by invoking its powers under Article 142,
even though the complainant therein declined to give consent for
compounding, observing that the accused has sufficiently
compensated the complainant.
8. Considering the totality of the circumstances and compromise
between the parties, we allow this appeal and acquit the appellants by
setting aside the impugned order dated 01.04.2019 as well the Trial
Court’s order dated 16.10.2012. Appellant no.2, who was exempted
1 Para 18
2 Para 29
3 Para 18.2
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from surrendering by this Court, need not surrender and his sureties
are hereby discharged.
Pending application(s), if any, are disposed of.
……………………………………J.
[SUDHANSHU DHULIA]
……………………………………J.
[AHSANUDDIN AMANULLAH]
NEW DELHI;
JULY 11, 2024
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ITEM NO.43 COURT NO.16 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. 6463/2024
(Arising out of impugned final judgment and order dated 01-04-2019
in CRLA No. 45/2014 passed by the High Court of Judicature at
Madras)
M/S NEW WIN EXPORT & ANR. Petitioner(s)
VERSUS
A.SUBRAMANIAM Respondent(s)
(IA No. 37747/2024 - CONDONATION OF DELAY IN FILING, IA No.
37751/2024 - EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT, IA
No. 37752/2024 - EXEMPTION FROM FILING O.T. AND IA No. 38197/2024
- PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES)
Date : 11-07-2024 These matters were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE SUDHANSHU DHULIA
HON'BLE MR. JUSTICE AHSANUDDIN AMANULLAH
For Petitioner(s) Mr. M Yogesh Kanna, Adv.
Mr. K. Paari Vendhan, AOR
Mr. Manoj Kumar A, Adv.
For Respondent(s) Mr. Sudhakar Rajendran, Adv.
Mr. Vairawan A.s, AOR
UPON hearing the counsel the Court made the following
O R D E R
Delay condoned.
Leave granted.
Appeal is allowed in terms of signed reportable order.
Pending application(s) shall stand disposed of.
(RAJNI MUKHI) (RAM SUBHAG SINGH)
COURT MASTER (SH) COURT MASTER (NSH)
(Signed reportable order is placed on the file)
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