Rashpinder Singh vs. Indian Red Cross Society

Facts

The petitioner, Rashpinder Singh, invoked the High Court's jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, seeking to quash a complaint filed by the respondent, Indian Red Cross Society, under Section 138 of the Negotiable Instruments Act, 1881. The complaint arose from the dishonour of two post-dated cheques, each for ₹3,56,163, issued by the petitioner towards a tender awarded for vehicle parking services. The petitioner had paid 25% of the total tender amount of ₹42,73,960 (₹36,22,000 plus 18% GST) and issued nine post-dated cheques for the remaining balance. The two dishonoured cheques were dated 25.04.2019 and 18.05.2019. The petitioner claimed to have paid the entire outstanding amount during the pendency of the complaint, a fact allegedly recorded in an order dated 26.09.2023, but the respondent refused to withdraw the complaint.

Held

The Court held that the petitioner does not have a right to seek the quashing of a complaint filed under Section 138 of the Negotiable Instruments Act, 1881, solely on the basis of payment of the cheque amount during the pendency of the trial, if the complainant does not agree to compound the offence. The Court reasoned that Section 138 of the NI Act is a penal provision, and unless the complainant agrees to compound the offence, the petitioner cannot demand its quashing. The Court relied on the Supreme Court's decision in Raj Reddy Kallem v. The State of Haryana and Another, which held that mere repayment of money does not absolve the accused from criminal liability under Section 138 of the NI Act, and courts cannot compel a complainant to consent to compounding if they do not agree. The Court noted that the payments were made with a significant delay of four to five years, and the issue of compensation for this delay can only be adjudicated upon the conclusion of the trial. Therefore, the prayer for quashing the complaint was found to be without merit.

Key Issues

1. Whether the petitioner has a right to seek quashing of a complaint filed under Section 138 of the Negotiable Instruments Act, 1881, solely on the ground that the cheque amount has been paid during the pendency of the trial, despite the complainant not agreeing to compound the offence? (Question of law). Petitioner's contention: The petitioner argued that once the entire amount due has been paid, the complaint under Section 138 of the NI Act cannot survive, and the respondent has no right to pursue the complaint. They relied on the principle that payment extinguishes the grievance. Respondent's contention: The respondent contended that the payment was made after a significant delay of four to five years after the complaint was filed in 2019, and the petitioner is liable to pay compensation for this delay. They argued that the mere repayment of money does not absolve the petitioner of criminal liability under Section 138 of the NI Act, and the complainant cannot be compelled to compound the offence if they do not agree.