Courts Interference in offenses compounded by will of parties

Courts Interference in offenses compounded by will of parties

Name – Ananya P Rau 

College – University Law College, Bangalore University.  

Introduction – 

Courts have always been the recourse to any dispute among parties. They remain the beacon of light for fair and justiciable results to parties, and good governance. Courts only interfere in matter so parties, when the parties have not arrived at reasonable solution. They adjudge the matter at hand, with evidence and hear both parties to arrive at a conclusion. However, there are some circumstances where the parties compound the offence. Compounding the offence, simply means that the parties are able to reach a certain settlement without the court’s intervention. This article will delve into the case of B V Seshaiah v. State of Telangana, adjudged by Honorable Justice Krishna Murari and Honorable Justice Ramasubramanian, wherein the court discusses the parties will to compound the offence. 

Prelude – The facts of the case are 

Section 138 of the Negotiable Instruments Act, 1881, was initiated against the Appellants. The allegations were that the Appellant under the garb of investing money, made unfair proceeds from the same. Subsequent to which the trial court held them guilty and sentenced the conviction. The Appellants then filed an appeal before the High Court of Judicature at Hyderabad for the State of Telangana.  During the course of this revision, the parties entered into a Memorandum to compound the offense and establish a peaceful recourse to the dispute. The High court upheld the conviction of the appellants despite the presence of a Memorandum of Understanding.

Issues Before Court of Law- 

  1. Whether the court can override the Memorandum of Understanding between parties to enforce the courts will? 

Analysis – 

In lieu of the same, the matter was preferred before the Supreme Court of India. The court in the case ofMeters & Instruments v. Kanchan Mehta, the courts have held the offense of Section 138 to fall under the ambit of a civil wrongful and the 2002 amendment has, in lieu of the same, made it compoundable at the will of the parties.  In the case at hand, the parties very clearly had an understanding to compound the offense. But the High court overlooked the memo and upheld the conviction of the appellants. The Supreme Court, has aptly held in the aforementioned case that the court cannot override the clause stated in the memo that elucidates the terms of compounding. The recourse to compounding the offence solely lies with the parties and does not grant the court the permission to interfere in matter of parties free will. The courts interference in such cases will lead to the following complication – 

  • The timely fashion in which matters may be decided gets hampered and adds on to the already pending case load on the judiciary. Enforcing the courts will on the dispute, may lead to further complications between the parties and this may lead to multiple other disputes. Pro-longed litigation may also lead to excessive costs and be contrary to the much-needed cost-effective litigation process needed. 

Section 138 of the Act governs the dishonoring of cheque, due to insufficiency of funds in the bank account. The penalty might be an imprisonment term which may extend up to 5 years, or a fine which may be twice of the amount mentioned in the cheque. The Law Commission as per its 213th report, has reported lakhs of Section 138, NI Act, cases in the country. The offence was made compoundable under section 147 of the 2002 amendment act, to better enable the parties to resolve the matter between themselves. The amendment reads as follows, “Notwithstanding anything contained in the Code of criminal Procedure, 1973, every offence punishable under this Act shall be compoundable.”. And in light of all the above-mentioned arguments, the Supreme Court held that the High Court cannot override the will of the parties to enforce their own will, when there is a presence of a memorandum of understanding. 


Pendency of cases is a prominent issue in the Indian legal system. To confront this issue, there have been many strides made, such as alternative dispute mechanisms. Compounding of offences is also one such alternative present to parties to amicably resolve their dispute. The duty of the court, in general understanding, is to assist parties to come to a conclusion. The Supreme Court, has rightly held in this case, B V Sesaiah v. State of Telangana, that the court being the adjudicator of matters, must not enforce their will on the parties, and seek to resolve the matter as soon as possible, when there is a memorandum of understanding to compound the offence by operation of law. 

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