Courts cannot coerce a complainant into consenting to compounding, and merely repaying the amount owed does not absolve the accused of liability : Supreme Court
The Supreme Court, in the case of RAJ REDDY KALLEM Versus THE STATE OF HARYANA & ANR., held that courts cannot compel a complainant in a cheque dishonour case to consent to the compounding of the complaint merely because the accused has compensated the complainant. It emphasized that the mere repayment of the amount does not absolve the accused from criminal liabilities under Section 138 of the Negotiable Instruments Act.
The bench, comprising Justices AS Bopanna and Sudhanshu Dhulia, observed that even if the complainant has been compensated by the accused, the court cannot force the complainant to consent to compounding the offense. It cited the judgment in M/s Meters and Instruments Private Limited and Another vs. Kanchan Mehta, which allowed courts to close criminal proceedings if the accused compensated the complainant, even without the complainant's consent. However, this discretion was overruled by a 5-judge bench in In Re Expeditious Trial of Cases Under Section 138 of NI Act, 1881.
Despite this, the Court noted its authority to quash criminal proceedings based on the specific circumstances of a case. It differentiated between compounding and quashing of a complaint. Considering the appellant's one-year imprisonment and compensation to the complainant, the Court found no purpose in prolonging the proceedings and quashed them under Article 142 of the Constitution.
The Court also reiterated the importance of seeking compounding at the initial stages of Section 138 cases. However, it clarified that seeking compounding later, even after conviction, is permissible.
In light of these considerations, the appeal was allowed.