Himachal Pradesh High Court Upholds Mandatory Complainant Consent for Compounding Offences Under Section 138 of NI Act

Court emphasizes that the accused's financial difficulties do not override legal requirements for complainant consent.

In a significant ruling, the Himachal Pradesh High Court has reaffirmed the necessity of obtaining the complainant's consent to compound offences under Section 138 of the Negotiable Instruments Act (NI Act), 1881. The decision was rendered in the case of Devi Ram v. State of HP, where the petitioner, Devi Ram, sought to compound the offence after depositing the compensation amount awarded by the Trial Court. However, the complainant's consent remained absent.

Presiding over the matter, Justice Rakesh Kainthla underscored that the court cannot compel the complainant to consent to the compounding of an offence under Section 138 of the NI Act, even if the accused has adequately compensated the complainant. This decision aligns with the precedent set by the Supreme Court in JIK Industries Ltd. v. Amarlal V. Jumani, which mandates the consent of the complainant for compounding offences under the NI Act.

The court further elaborated that the accused's inability to pay the composition fee due to financial constraints does not affect the complainant's consent requirement. The court cited the Supreme Court's decision in A.S. Pharma (P) Ltd. v. Nayati Medical (P) Ltd., which emphasized that the inherent powers under Section 482 of the Criminal Procedure Code or under Section 147 of the NI Act cannot be invoked to compel the compounding of an offence without the complainant's consent.

Justice Kainthla noted that while the accused had deposited the compensation amount, this alone was insufficient. The complainant, having been dragged through prolonged litigation, was not adequately compensated for interest losses on the delayed payment. Consequently, the court rejected the petitioner's application to settle the matter.

This ruling serves as a crucial reminder of the legal framework governing the compounding of offences under the NI Act, reinforcing that the complainant's consent is paramount and cannot be circumvented, regardless of the accused's financial situation.

Bottom Line:

Offence under Section 138 of the Negotiable Instruments Act cannot be compounded without the consent of the complainant, even if the accused has deposited the compensation amount.

Statutory provision(s): Negotiable Instruments Act, 1881 Section 138, Negotiable Instruments Act, 1881 Section 147, Criminal Procedure Code, 1973 Section 482

Devi Ram v. State of HP, (Himachal Pradesh) : Law Finder Doc Id # 2819331