DAMODAR S. PRABHU versus SAYED BABALAL H.

Citation: [2010] 5 S.C.R. 678 · Decided: 03-05-2010 · Supreme Court of India · Bench: K.G. BALAKRISHNAN, P. SATHASIVAM, J.M. PANCHAL · Disposal: Disposed off

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Judgment (excerpt)

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[2010] 5 S.C.R. 678 
DAMODAR S. PRABHU 
v. 
SAYED BABALAL H. 
(Criminal Appeal No. 963 of 2010 etc. etc.) 
MAY 03, 2010. 
[K.G BALAKRISHNAN, CJI., P. SATHASIVAM AND J.M. 
PANCHAL, JJ.] 
Negotiable Instruments Act, 1881: 
ss. 147 and 138 - Compounding of offence - Appeal 
before Supreme Court involving offences punishable uls 138 
- Settlement having been arrived at between the parties -
HELD: Compounding of offences allowed and conviction of 
0 
accused in each case set aside. 
s.147 - Compounding of offence_s punishable u/s 138 -
Guidelines - HELD: In view of the non-obstante clause, which 
has the overriding effect, the compo9nding of offences under 
the Act is controlled by s.147 and the scheme contemplated 
E bys. 320, Cr.PC will not be applicable in the strict sense since 
the latter is meant for the specified offences under the Penal 
Code - It is evident that the permissibility of the compounding 
of an offence is linked to the perceived seriousness of the 
offence and the nature of the remedy provided - It is quite 
F obvious that with respect to the offences of dishonour of 
cheques, it is the compensatory aspect of the remedy which . 
should be giveii priority over the punitive aspect -
The 
problem in such cases is with the tendency of litigants to 
belatedly choose compounding as a means to resolve their 
G dispute - Furthermore, unlike s.320, CrPC, s.147 of the Ac( 
provides no explicit guidance as to at 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 - In the absence of statutory 
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678 
DAMODAR S. PRABHU v. SAYED BABALAL H. 
679 
guidance, parties are choosing compounding as a method of A 
last resort instead of opting for it as soon as the Magistrates 
take cognizance of the complaints - If the accused is willing 
to settle or compromise by way of compounding of 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 
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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 - Guidelines laid down for fifing of applications for c 
compounding of offences involving s. 138 of the Act and 
imposition of costs on parties who unduly delay compounding 
of offences - It would be mandatory for complainant to 
disclose that no other compliant in relation to the same 
offence has been filed before any other court - Since s.147 .0 
does not carry any guidance on how to proceed with the 
compounding of offences, there is legislative vacuum in this 
regard - Even in the past the Supreme Court has used its 
power to do complete justice under Article 142 of the 
Constitution to frame guidelines in relation to subject matter 
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where there was a legislative vacuum - Code of Criminal 
·Procedure, 1973-s.320- Constitutionoflndia, 1950-Article 
142 - Legislation - Legislative vacuum - Bridged by judicial 
pronouncement. 
O.P. Dho/akia v. State of Haryana, (2000) 1 SCC 672; 
Sivasankaran v. State of Kera/a & Anr., (2002) 8 SCC 164; 
Kishore Kumar v. J.K. Corporation Ltd., (2004) 12 SCC 494; 
Sailesh Shyam Parsekar v. Baban, (2005) 4 SCC 162; Vinay 
Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., 2007 (12) 
SCR 1134 = (2008) 2 SCC 305; R. Rajeshwari v. H. N. 
Jagadish, (2008) 4 SCC 82; and K.M. Ibrahim v. K.P. 
Mohammed & Anr. 2009 (14) SCALE 262, referred to .. 
Criminal Procedure, 5fh edn. by K.N.C. Pillai, R. V. 
Kelkar's (Lucknow: Eastern Book Company, 2008) at p. 
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680 
SUPREME COURT REPORTS 
[2010] 5 S.C.R. 
A 444; Some thoughts towards law reforms on the topic of 
Section 138, Negotiable Instruments Act -
Tackling an 
avalanche of cases by Arun Mohan, (New Delhi: Universal 
Law Publishing Co. Pvt. Ltd., 2009) at p. 5, referred to. 
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Case Law Reference: 
c2000) 1 sec s12 
referred to 
para 6 
c2002) 8 sec 164 
referred to 
para 7 
(2004) 12 sec 494 
referred to 
para 7 
c2005) 4 sec 162 
referred to 
para 7 
2007 (12) SCR 1134 
referred to 
para 9 
(2008) 4 sec 82 
referred to 
para 10 
2009 (14) SCALE 262 referred to 
para 11 
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal 
No. 963 of 2010. 
From the Judgment & Order dated 14.8.2007 of the High 
E Court of Bombay at Goa in Criminal Appeal No. 74 of 2006. 
Crl.

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