VINAY DEVANNA NAYAK versus RYOT SEVA SAHAKARI BANK LTD.

Citation: [2007] 12 S.C.R. 1134 · Decided: 07-12-2007 · Supreme Court of India · Bench: C.K. THAKKER · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
VINA Y DEV ANNA NAY AK 
v. 
RYOT SEVA SAHAKARI BANK LTD. 
)<. 
DECEMBER 7, 2007 
B 
[C.K. THAKKER AND MARKANDEY KAT JU, JJ.) 
Negotiable Instruments Act, 1881; S. 38 and S. 147 (as inserted 
by amending Act 5512002-0.ffence u/s 138-Compounding of-Held: 
c Though technically provisions of s. 320 Cr PC do not apply to offences 
not covered by Penal Code, the fact as to compromise between the 
parties and payment of dues u/s 138 of the Act would be a relevant 
fact to allow compounding-In such matters normally compounding 
of offences should not be denied-Moreover, s. 147 also allows 
D compounding ofoffencespunishable under the provisions of the Act-
On facts, there exists no reason to refuse compromise between the 
parties as the amount In question has been paid by the accused and 
accepted by the complainant towards full and final settlement of the 
dues-Order of conviction and sentence as recorded by Courts below 
E against the accused set aside and he is acquitted of the charge levelled 
against him-Code of Criminal Procedure, 197 3-S. 3 20-
Compounding of offences. 
S. 138--Scope of-Discussed. 
F 
Words & Phrases: 
Compounding of an offence-Meaning and scope of in the context 
of s. 147 of the Negotiable Instruments Act, 1881. 
The Appellant, who was stated to have taken a loan from the 
G Complainant Bank, issued a cheque in its favour. The complainant 
alleged that the cheque was dishonored and returned to the drawer 
--
with endorsement, "Loan account due date is over and account was 
not in operation." The appellant was prosecuted under the provisions 
of the Negotiable Instruments Act, 1881. The Trial Court held that 
H 
1134 
"' 
I 
VINA Y DEV ANNA NAY AK v. RYOT SEV A SAHAKARI 1135 
BANK LTD. 
the accused failed to pay the loan amount and thereby he committed A 
an offence punishable under s.138 of Act, and accordingly convicted, 
sentenced him to undergo imprisonment for a period of six months, 
ordered him to pay a certain amount as compensation to the 
complainant and a certain amount to the State Government as fine. 
The appellate court confirmed the order of conviction and sentence B 
as recorded by the trial court. It, however, reduced the amounts of 
compensation and fine. On Revision application, the High Court 
passed an interim order directing the accused to deposit the 
compensation-amount in the Court but the accused failed to comply 
with the order. 
c 
In the instant appeal, pursuant to the notice issued by the Court, 
the respondent-Bank appeared and filed an affidavit stating that the 
appellant had paid the amount in question towards full and final 
settlement of the claim of the respondent and the matter stood settled 
amicably. In this view of the matter, the appellant pleaded that the D 
compromise may be recorded, the appeal may be allowed; and he 
may be ordered to be acquitted of the charge levelled against him. 
Allowing the appeal, the Court 
HELD: 1. In view of the fact that the matter has been settled E 
and the amount in question has been paid by the appellant and 
accepted by the respondent towards full and final settlement of the . 
claim and there remained no further dues by the bank, prim a facie, 
there should be no objection to grant the prayer of the accused and 
" 
acquit him of the offence of which he was charged and convicted by F 
the Courts below. [Para 10] [1140-B, CJ 
2.1. It is no doubt true that every crime is considered to be an 
offence against the society as a whole and not only against an 
individual even though an individual might have suffered thereby. 
It is, therefore, the duty of the State to take appropriate action G 
against the offender. It is equally the duty of a Court of law 
administrating criminal justice to punish a criminal. 
(Parall] [1140-DJ 
2.2. Certain offences are very serious in which compromise or H 
1136 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
A settlement is not permissible. Some other offences, on the other 
hand, are not so serious and the law may allow the parties to settle 
them by entering into a compromise. The compounding of an offence 
signifies that the person against whom the offence has been 
committed has received some gratification to an act as an 
B inducement for his abstaining from proceeding further with the case. 
[Para 11) (1140-E, F) 
2.3. Section 320 of the Code of Criminal Procedure, 1973 deals 
with offences which are compoundable, either by the parties without 
the leave of the Court or by the parties but o

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