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The willingness of the accused to settle indicates merit in complainant’s case [S.138 NI Act]

The Hon’ble High Court of Allahabad in Raj Trading Company V. State of U.P & Anr. [application u/s 482 no – 12828 of 2020] observed that if the accused is willing to settle or compromise by way of compounding of offence at a later stage, it indicates some merit in the complainant’s case.

 

The Hon’ble court while examining application under S. 482 of Cr.P.C to quash the entire criminal proceedings u/s 138 of NI Act pending in the court of Additional Civil Judge, observed that it is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect. It was also noted by the court that cheque bounce cases are indeed being compromised or settled by way of compounding, albeit during the later stages of litigation thereby contributing to undue delay in justice delivery.

 

It was further observed by the court that “One explanation for such behaviour could be that the accused persons are willing to take the chance of progressing through the various stages of litigation and then choose the route of settlement only when no other route remains. While such behaviour may be viewed as rational from the viewpoint of litigants, the hard facts are that the undue delay in opting for compounding contributes to the arrears pending before the courts at various levels. 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 desirable if parties choose compounding during the earlier stages of litigation.”

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