Supreme Court Reaffirms Complainant's Consent Required for Compounding Cheque Dishonor Cases

 

On July 23, 2024, the Supreme Court of India reiterated that cases involving the dishonor of cheques can only be compounded under Section 147 of the Negotiable Instruments Act with the consent of the complainant. This ruling addressed a case where the High Court had compounded the offense without the complainant's consent, invoking its inherent powers under Section 482 of the Criminal Procedure Code (Cr.P.C.).

Distinguishing Compounding and Quashing

The bench, comprising Justices CT Ravikumar and Sanjay Karol, emphasized the distinction between compounding an offense and quashing a complaint. They clarified that the complainant's consent is a fundamental requirement for compounding under Section 147, which specifically allows for the compounding of offenses under the Negotiable Instruments Act, while Section 320 of the Cr.P.C. generally governs compounding in criminal cases.

High Court's Inherent Powers Cannot Override Specific Requirements

The Supreme Court noted that the High Court had previously compounded the offense without the complainant's consent, arguing that the complainant had been equitably compensated. However, the Supreme Court rejected this reasoning, stating that the absence of the complainant's consent invalidated the High Court's judgment.

The Court further distinguished between compounding and quashing proceedings, asserting that the inherent powers under Article 142 of the Constitution could be invoked to quash proceedings in exceptional circumstances, but this does not grant the High Court the authority to do the same. The Court emphasized that while it can quash proceedings under Article 142, this does not justify compounding an offense under Section 138 of the Negotiable Instruments Act without the complainant's consent.

Quashing Proceedings in Unique Circumstances

In conclusion, the Supreme Court held that the High Court erred in using its inherent powers under Section 482 of the Cr.P.C. and Section 147 of the Negotiable Instruments Act to compound the offense. However, considering the unique circumstances of the case, including the substantial amount deposited by the respondents, the Court decided to quash the proceedings, stating that it was appropriate to invoke its powers to ensure complete justice between the parties.