Himachal Pradesh High Court
Yashwant vs Amar Singh on 9 May, 2025
Yashwant vs Amar Singh Cr. Revision No. 280 of 2024 Reserved on. 05.05.2025 09.05.2025 Present: Mr. Rupinder Singh, Advocate, for the petitioner.
Mr. G.R. Palsra, Advocate, for the respondent.
Cr.MP No. 1412 of 2025.
The applicant has filed the present application for seeking exemption to deposit 15% of the compounding fee or its reduction to 5% of the cheque amount in view of the financial hardship. It has been asserted that the applicant has to deposit 15% of the cheque amount. He failed to arrange the huge amount due to his poor condition. The applicant has to look after a large family, including his parents, who are suffering from various old-age ailments.
Hence, the present application.
2. No reply has been filed to the application by learned counsel for the respondent.
3. The Hon'ble Supreme Court held in M.P. State Legal Services Authority vs. Prateek Jain, (2014) 10 SCC 690, that the purpose of laying down the guidelines was to discourage people from contesting the complaints and then compounding the matter when they are driven to the wall. This leads to clogging the docket of the Court;
therefore, the parties should be permitted to compound 2 the offence at the earliest to save time of the Court and the complainant. It was observed: -
"19. The purpose of laying down the Guidelines in Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663: (2010) 2 SCC (Civ) 520: (2010) 2 SCC (Cri) 1328] is explained in the said judgment itself. The Court in that case was concerned with the stage of the case when compounding of the offence under Section 147 of the Act is to be permitted. To put it otherwise, the question was as to whether such a compounding can be only at the trial court stage or is it permissible even at the appellate stage. It was noted that even before the insertion of Section 147 of the Act, by way of amendment in the year 2002, some High Courts had permitted the compounding of the offence contemplated by Section 138 of the Act during the later stages of litigation. This was so done by this Court also in O.P. Dholakia v. State of Haryana [(2000) 1 SCC 762:
2000 SCC (Cri) 310] and in some other cases which were noticed by the Bench. From these judgments, the Court concluded that the compounding of offences at later stages of litigation in cheque-bouncing cases was held to be permissible.
20. While holding so, the Court also took note of the phenomenon which was widely prevalent in the manner in which cases under Section 138 of the Act proceed in this country. It noticed that there was a tendency on the part of the accused persons to drag on these proceedings and resort to the settlement process only at a stage when the accused persons were driven to the wall. It is for this reason that most of the complaints filed result in compromise or settlement before the final judgment, on the one hand, and even in those cases where judgment is pronounced and conviction is recorded, such cases are settled at the appellate stage. This was so noted in paras 18-19 of the judgment [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328], which read as under: (Damodar S. Prabhu case [Damodar S. Prabhu v.
Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328], SCC pp. 670-71) "18. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the 3 punitive aspect. There is also some support for the apprehensions raised by the learned Attorney General that a majority of cheque bounce cases are indeed being compromised or settled by way of compounding, albeit during the later stages of litigation, thereby contributing to undue delay in justice delivery. The problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute. Furthermore, the written submissions filed on behalf of the learned Attorney General have stressed the fact that unlike Section 320 CrPC, Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court.
19. As mentioned earlier, the learned Attorney General's submission is that in the absence of statutory guidance, parties are choosing compounding as a method of last resort instead of opting for it as soon as the Magistrates take cognisance of the complaints. One explanation for such behaviour could be that the accused persons are willing to take the chance of progressing through the various stages of litigation and then choose the route of settlement only when no other route remains. While such behaviour may be viewed as rational from the viewpoint of litigants, the hard facts are that the undue delay in opting for compounding contributes to the arrears pending before the courts at various levels. If the accused is willing to settle or compromise by way of compounding the offence at a later stage of litigation, it is generally indicative of some merit in the complainant's case. In such cases, it would be desirable if parties choose compounding during the earlier stages of litigation. If, however, the accused has a valid defence such as a mistake, forgery or coercion among other grounds, then the matter can be litigated through the specified forums."
This particular tendency had prompted the Court to accept the submission of the Attorney General to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence inasmuch as such a requirement of deposit of the costs will act as a deterrent for delayed composition since free and easy compounding of the offences at any stage, however belated, was given incentive to the drawer of the cheque to delay settling of cases for years. For this reason, the Court framed the 4 guidelines permitting compounding with the imposition of varying costs depending upon the stage at which the settlement took place in a particular case.
21. After formulating "The Guidelines", which are already extracted above, the Court made very pertinent observations in paras 24-26 of the said judgment [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 :
(2010) 2 SCC (Cri) 1328] which would have a bearing in the present case. Thus, we reproduce the same below: (Damodar S. Prabhu case [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663: (2010) 2 SCC (Civ) 520: (2010) 2 SCC (Cri) 1328], SCC p. 673) "24. We are also conscious of the view that the judicial endorsement of the above-quoted Guidelines could be seen as an act of judicial law-making and therefore an intrusion into the legislative domain. It must be kept in mind that Section 147 of the Act does not carry any guidance on how to proceed with the compounding of offences under the Act. We have already explained that the scheme contemplated under Section 320 CrPC cannot be followed in a strict sense. In view of the legislative vacuum, we see no hurdle to the endorsement of some suggestions which have been designed to discourage litigants from unduly delaying the composition of the offence in cases involving Section 138 of the Act.
25. The graded scheme for imposing costs is a means to encourage compounding at an early stage of litigation. In the status quo, valuable time of the court is spent on the trial of these cases, and the parties are not liable to pay any court fee since the proceedings are governed by the Code of Criminal Procedure, even though the impact of the offence is largely confined to the private parties. Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent court can, of course, reduce the costs with regard to the specific facts and circumstances of a case while recording reasons in writing for such variance. Bona fide litigants should, of course, contest the proceedings to their logical end.5
26. Even in the past, this Court has used its power to do complete justice under Article 142 of the Constitution to frame guidelines in relation to subject matter where there was a legislative vacuum."
It is clear from the reading of the aforesaid paragraphs that the Court made it clear that framing of the said Guidelines did not amount to judicial legislation. In the opinion of the Court, since Section 147 of the Act did not carry any guidance on how to proceed with compounding the offences under the Act and Section 320 of the Code of Criminal Procedure, 1973 could not be followed in a strict sense in respect of the offences pertaining to Section 138 of the Act, there was a legislative vacuum which prompted the Court to frame those guidelines to achieve the following objectives:
(i) to discourage litigants from unduly delaying the composition of the offences in cases involving Section 138 of the Act;
(ii) it would result in encouraging compounding at an early stage of litigation, saving valuable time of the court, which is spent on the trial of such cases; and
(iii) even though the imposition of costs by the competent court is a matter of discretion, the scale of costs had been suggested to attain uniformity.
At the same time, the Court also made it abundantly clear that the court concerned would be at liberty to reduce the costs with regard to specific facts and circumstances of a case while recording reasons in writing for such variance.
22. What follows from the above is that normally costs as specified in the Guidelines laid down in the said judgment [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] have to be imposed on the accused persons while permitting compounding. There can be a departure therefrom in a particular case, for good reasons to be recorded in writing by the court concerned. It is for this reason that the Court mentioned three objectives which were sought to be achieved by framing those Guidelines, as taken note of above. It is thus, manifestly the framing of "Guidelines" in that judgment [Damodar S. Prabhu v.
6Sayed Babalal H., (2010) 5 SCC 663: (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] was also to achieve a particular public purpose. Here comes the issue for consideration as to whether these Guidelines are to be given a go-by when a case is decided/settled in the Lok Adalat? Our answer is that it may not be necessarily so, and a proper balance can be struck, taking care of both situations.
23. Having regard thereto, we are of the opinion that even when a case is decided in the Lok Adalat, the requirement of following the Guidelines contained in Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] should normally not be dispensed with. However, if there is a special/specific reason to deviate therefrom, the court is not remediless as Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663: (2010) 2 SCC (Civ) 520: (2010) 2 SCC (Cri) 1328] itself has given discretion to the court concerned to reduce the costs with regard to specific facts and circumstances of the case while recording reasons in writing about such variance. Therefore, in those matters where the case has to be decided/settled in the Lok Adalat, if the court finds that it is a result of the positive attitude of the parties, in such appropriate cases, the court can always reduce the costs by imposing minimal costs or even waive the same. For that, it would be for the parties, particularly the accused person, to make out a plausible case for the waiver/reduction of costs and to convince the court concerned about the same. This course of action, according to us, would strike a balance between the two competing but equally important interests, namely, achieving the objectives delineated in Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663: (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] on the one hand and the public interest which is sought to be achieved by encouraging settlements/resolution of case through the Lok Adalats on the other hand.
4. Thus, the normal rule is that the money ordered to be paid by the Hon'ble Supreme Court has to be deposited after the settlement to discourage the like-
minded person from contesting the complaints, which 7 ultimately ends in the settlement. If the matter is to be settled, the same should be settled in the Court of first instance at the first opportunity. The exception can be created as per the circumstances of the case.
5. A perusal of the complaint shows that the accused had borrowed an amount of ₹1,00,000/- from the accused. 15% amount of the cheque is ₹15,000/-, which cannot be said to be an exorbitant amount by any stretch of imagination. The applicant asserted that he had compromised the matter with the complainant and has returned ₹1,00,000/-, which shows that the applicant was in a position to return ₹1,00,000/- to the complainant. He engaged a counsel before the learned Trial Court, the learned Appellate Court and this Court, which falsifies his plea that he is a poor person having no means. If he could afford the luxury of litigation before the learned Trial Court, Appellate Court and before this Court, there is no reason why he should not pay 15% of the cheque amount ordered to be deposited. This amount of composition fee was provided as a deterrent to dissuade persons like the applicant from indulging in the luxury of litigation and dragging the complainant to the different Courts, and settling the matter when no other option is left with him Any relaxation in the imposition 8 of the amount would encourage people like the applicant to defeat the purpose of imposing the composition fee.
6. Thus, there is no reason to exempt the accused from the payment of 15% of the cheque amount ordered to be paid by the Hon'ble Supreme Court in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663.
Hence, the applicant is directed to deposit 15% of the cheque amount with, the Member Secretary, State Legal Services Authorities Kasumpti Shimla-9 within two weeks.
7. Consequently, the application fails and the same is dismissed and stands disposed of.
Cr. Revision No. 280 of 2024List the matter after four weeks.
(Rakesh Kainthla) Judge 09th May, 2025 (Ravinder)