Compounding an offence implies compromise between the parties. Compromise means both parties must consent thereto. Therefore, it may be necessary to obtain consent of the complainant for the compounding of the cheque bounce case.
Please note that a case of cheque bounce under Section 138 of the Negotiable Instruments Act is mainly a criminal offence, and not merely for recovery of the amount (through the fine imposed) for the cheque amount. Therefore, there may be situations where the complainant may wish to continue proceedings for imposing penalty on the accused for the cheque bounce. However, generally speaking, experience shows that the complainant may be willing to accept the payment of the cheque (with or without interest and/or costs, etc.) and agree for compounding. Sometimes, if the accused is willing to make the payment of the cheque amount, even if the complainant is not willing to compromise, the magistrate may persuade him (or, should I use the word “compel” him?) to compromise, in order to unclog the system of unnecessary pendency of cases. Therefore, the accused may offer to pay the cheque amount on the first appearance in court and generally speaking the cheque dishonour case may be compounded.
In this regard, I may also point out the case of Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663, in which the Supreme Court has issued the following guidelines:
(a) That directions can be given that the writ of summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused.
(b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the court deems fit.
(c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs.
(d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount.
However, my understanding of this judgment is that “compounding” referred to in this judgment would still require the consent of the complainant, since consent of both parties is inherent in the word “compromise” or “compounding”. What the Supreme Court has laid down is that compounding may be permitted at various stages (including appeal stage or the SLP stage before Supreme Court) with additional costs. But, in my understanding, even such compounding presupposes consent of the complainant.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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