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Scope of Section 147 of the Negotiable Instruments Act

The Section 147 of Negotiable Instruments Act, 1881 reads as under:

47. Offences to be compoundable.—Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.”.

In a recent decision of the Supreme Court – J.K. Industries Ltd.and ohers v. Amarlal V. Jumani and another, reported in (2012) 3 SCC 255 : (2012) 2 SCC (Cri) 125, it was held as under:

“Section 147 of the N.I. Act came by way of an amendment. From the Statement of Objects and Reasons of the Negotiable Instruments (Amendment) Bill, 2001, which ultimately became Act 55 of 2002, these amendments were introduced to deal with large number of cases which were pending under the N.I. Act in various courts in the country. Considering the said pendency, a Working group was constituted to review Section 138 of the N.I. Act and make recommendations about changes to deal with such pendency. Pursuant to the recommendations of the Working Group, the aforesaid Bill was introduced in Parliament and one of the amendments introduced was “to make offences under the Act compoundable”.

Non-compoundable offences have become Compoundable

It is clear from a perusal of Statement of Objects and Reasons that offence under the N.I. Act which was previously non-compoundable in view of Section 320, sub-section (9) of the Code has now become compoundable. That does not mean that the effect of Section 147 is to obliterate all statutory provisions of Section 320 of the Code relating to the mode and manner of compounding of an offence. Section 147 will only override Section 320(9) of the Code insofar as offence under Section 147 of the N.I. Act is concerned.

Therefore, Section 147 of the N.I. Act must be reasonably construed to mean that as a result of the said Section, the offences under the N.I. Act are made compoundable, but the main principle of such compounding, namely, the consent of the person aggrieved or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the N.I. Act.     


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