Landmark Judgment on Compounding of offence under NI Act Amaresh Patel LANDMARK JUDGMENT Sat, Oct 12, 2019, at ,01:22 AM Title of the Case – Compounding of offence Name of the case – Rameshbhai Somabhai Patel vs. Dineshbhai Achalanand Rathi., 2004 SCC Online Guj 469, II (2205) BC 220 (Gujarat High Court) Date of Judgment – 28th Jan 2004 Judges: Justice C.K. Buch Subject and sections involved – Section 138 of Negotiable Instruments Act, 1881 Issue: Whether formal permission of the court is required to compound the case registered u/s 147 NI Act? Fact of the Case: The original complainant, Dineshbhai Rathi, who is respondent in the case, confirms that he has received an amount of 1 Lakh INR and further confirms that he has compounded the present case. Click Here to Get All Important Judgment of the Month Ratio of the Case: The High Court of Gujarat considering the language of section 147 of the NI Act, held that it is not necessary to consider the scheme of Sec.320 of CrPC, but to appreciate the questions posed, it can still be looked into other relevant provision. Sec.320 of CrPC divides compoundable offences in two different parts by sub-section (1) & sub-section (2). Subsequent sub-sections deal with other contingencies, qualifications or embargoes. But Sec.147 of The N.I.Act says that offence shall be compoundable and it does not provide for any other or further qualification or embargo like sub-section (2) of Sec.320 of CrPC. The parties can compound the offence as if the offence is otherwise compoundable. Thus, the offence is made straightway compoundable like the case described under sub-section (1) of Sec.320 of CrPC. Sub-section (9) of Sec.320 of CrPC has no room to play because of non-obstante clause in Sec.147 of The N.I.Act. However, while accepting such plea of compromise at the revisional stage, the Court can certainly look to the intention of the Legislature and object of sub-section (6) of Sec.320 of CrPC in the background of pragmatic approach of the Hon'ble Supreme Court in the case of O.P.Dholakia vs. State of Haryana & anr., (2000) 1 SCC 762 under Article 136 of the Constitution of India. That if the original complainant comes to the Court and says that he is withdrawing himself from prosecution on account of compromise and he has compounded the matter, then the conviction and sentence have to be set aside. No formal permission to compound the offence is required.