In CRL.M.C. 2693/2023 -DEL HC- No non-bailable warrants after compounding of NI Act offence, rules Delhi High Court
Justice Amit Sharma [31-10-2023]

Read Order: Sanjeev Srivastava and Another V. State of NCT of Delhi & Ors

Chahat Varma

New Delhi, November 2, 2023: The Delhi High Court has quashed an FIR in a Negotiable Instruments Act (NI Act) case, holding that the issuance of non-bailable warrants and subsequent proceedings under Section 82 of the Cr.P.C. were without jurisdiction.

In this case, Mr. Arvind Gupta had filed a complaint under Section 138 of the NI Act, against the petitioners in 2016. During the proceedings, the parties reached a settlement through mediation, and the terms were recorded by the Metropolitan Magistrate. The settlement included a demand draft of Rs. 15,00,000 and 10 post-dated cheques. However, on December 15, 2018, Mr. Gupta filed an application stating that the petitioner had not complied with the settlement terms, leading to the issuance of warrants of attachment under Section 421 of the Cr.P.C. Subsequently, the Metropolitan Magistrate issued non-bailable warrants and attempted to execute them. When this failed, fresh non-bailable warrants were issued. The process server's statement was recorded, declaring the petitioners as absconders. A revision petition against this was dismissed, and the FIR under Section 174A of the IPC was registered on July 29, 2022.

The counsel for the petitioners informed the court that the dispute regarding the non-compliance of certain terms of the settlement agreement had been resolved through a separate settlement agreement. Consequently, the Metropolitan Magistrate compounded the complaint case under Section 138 of the NI Act and acquitted all the accused persons.

The single-judge bench of Justice Amit Sharma referred to Dayawati v. Yogesh Kumar Gosain [LQ/DelHC/2017/2009], and noted once the offense under Section 138 of the NI Act is compounded in terms of Section 147 of the said Act, the recovery of the agreed-upon amount must be realized in terms of Section 431 read with Section 421 of the Cr.P.C. Notably, the court can only attach the properties of the accused persons in accordance with these provisions. The issuance of non-bailable warrants by the Metropolitan Magistrate at the stage when the proceedings in the complaint case are over is not provided for. The provisions do not mandate the mandatory presence of accused persons. Warrants will only be issued for attachment and not for arrest.

Consequently, the issuance of non-bailable warrants in this case was considered without jurisdiction, and the subsequent proceedings under Section 82 of the Cr.PC. were also deemed invalid.

The court held that, considering the facts and circumstances of the case, continuing with the proceedings in the subject FIR would not serve any useful purpose.

Therefore, it was deemed appropriate to quash the FIR in order to secure the ends of justice.