Gujarat High Court
Mukeshkumar Muljibhai Makwana vs State Of Gujarat on 25 July, 2025
Author: Gita Gopi
Bench: Gita Gopi
NEUTRAL CITATION
R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL APPEAL NO. 373 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE GITA GOPI
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Approved for Reporting Yes No
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MUKESHKUMAR MULJIBHAI MAKWANA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR PK SHUKLA(1056) for the Appellant(s) No. 1
PUBLIC PROSECUTOR for the Opponent(s)/Respondent(s) No. 1
RULE SERVED for the Opponent(s)/Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE GITA GOPI
Date : 25/07/2025
ORAL JUDGMENT
1. Criminal Appeal is filed aggrieved by the order dated 25.2.2010 passed by the learned Principal Sessions Judge, Mehsana in Criminal Appeal no.103 of 2009 convicting the appellant - original accused under Section 138 of the Negotiable Instruments Act, 1881.
2. Criminal Appeal no.103 of 2009 before the Sessions Court, Mehsana was filed under Section 374(3) of the Code of Page 1 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025 NEUTRAL CITATION R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025 undefined Criminal Procedure, 1973, which was challenging the judgment dated 17.8.1999 passed by the learned JMFC, Mehsana in Criminal Case no.961 of 2006, whereby the appellant came to be convicted. The conviction was for one year simple imprisonment without fine, but with punishment to pay respondent no.2 an amount of Rs.1,53,000/- as compensation and in default of payment, simple imprisonment for one month for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. A perusal of the order passed by the learned JMFC, Mehsana shows that the learned JMFC had not passed any order of fine. While the amount which was granted of Rs.1,53,000/- was under Section 357(3) of the Cr.P.C. to be paid to the Mehsana Jilla District Panchayat Employees Cooperative Bank Ltd., Mehsana. In failure of paying the compensation amount, the learned JMFC had ordered for one month imprisonment.
3. The challenge was given to the order of learned JMFC in Criminal Appeal no.103 of 2009.
4. Learned advocate Mr. P.K. Shukla for the appellant on 16.6.2025 had submitted before this Court that the entire Page 2 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025 NEUTRAL CITATION R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025 undefined amount of Rs.1,53,000/- had been paid to the Mehsana District Panchayat Employees Cooperative Bank Ltd., Mehsana on 15.9.2009. Advocate Mr. Shukla had referred to the receipt, which was at Annexure-C and hence, this Court on 16.6.2025 passed the following order:-
"Mr. P.K. Shukla, learned advocate for the appellant has submitted that the cheque amount has been paid and has submitted that the entire amount of Rs.1,53,000/- has been deposited by the appellant with the respondent-Bank. Mr. Shukla has relied upon Annexure-C, a copy of the receipt showing the payment made at the stage of appeal. The said fact was not taken into consideration. Since the cheque amount has already been paid, let NOTICE be issued to the respondent - Bank to respond, returnable on 30.7.2025."
5. The matter was listed yesterday since the notice had been served. This Court waited for the Bank to respond. However, none appeared and thus, to give one more opportunity, the matter was again listed today.
6. Learned advocate Mr. Shukla for the appellant has referred to the judgment in the case of Raj Reddy Kallem v. State of Haryana & Anr., (2024) 8 SCC 588 to contend that as per Section 147 of the Negotiable Instruments Act, 1881, all Page 3 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025 NEUTRAL CITATION R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025 undefined offences punishable under the Negotiable Instruments Act, 1881 are compoundable. Advocate Mr. Shukla submitted that as observed in the judgment, the accused are persuaded to compound at the initial stage instead of later stage. Mr. Shukla further submitted that the effect would be that there is no bar to seek compounding of offence at the later stage of the criminal proceedings including after conviction. Advocate Mr. Shukla further submitted that this Court on 16.6.2025 had given an opportunity to the Bank to come before this Court to answer the slip, which shows the payment of the compensation amount, which is the same as that of the cheque amount. Advocate Mr. Shukla submitted that the judgment in the case of Raj Reddy Kallem (supra) has clarified about the compounding of the offence even in absence of the consent of the aggrieved, if the accused have compensated the complainant. Advocate Mr. Shukla thus stated that the compensation amount as ordered has already been deposited and therefore, due consideration is required to be given since it is the compensatory aspect of remedy, which should be given priority to the punitive aspect. Page 4 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025
NEUTRAL CITATION R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025 undefined
7. In the case of Raj Reddy Kallem (supra), it has been observed as under:-
"As per Section 147 of the NI Act, all offences punishable under the Negotiable Instruments Act are compoundable. However, unlike Section 320 Cr.P.C., the NI Act does not elaborate upon the manner in which offences should be compounded. To fill up this legislative gap, the Supreme Court, has passed some guidelines under Article 142 of the Constitution regarding compounding of offence under Section 138 of NI Act.
In cases of Section 138 of the NI Act, the accused must try for compounding at the initial stages instead of the later stage, however, there is no bar to seek the compounding of the offence at later stages of criminal proceedings including after conviction.
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.
Section 147 of the NI Act must be reasonably construed to mean that as a result of the said section the offences under the NI 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 NI Act.
Even in the absence of "consent" court can close criminal proceedings against an accused in cases of Section 138 of the NI Act if the accused has compensated the Page 5 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025 NEUTRAL CITATION R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025 undefined complainant."
8. Since here in this matter, it was a case of loan provided to the accused as a member of the Mehsana District Panchayat Employees Cooperative Bank Ltd., Mehsana. The loan worth Rs.1,15,000/- was borrowed by the accused from the complainant-Bank on 2.5.2001 in connection to the promissory note, confession, surety, etc., which came to be executed by the accused in favour of the Bank. It was noticed that the accused was not punctual in paying installment of the loan and was requested by the complainant - Bank to pay the dues regularly. A cheque no.034286 amounting to Rs.1,53,000/- drawn on Dena Bank, Gandhinagar was issued by the accused on 22.12.2005. There is an endorsement of "Garnishi order served by the Government". The accused was serving as Peon in the District Panchayat, Mehsana and then, he was transferred to Gandhinagar and therefore, necessary installment towards the loan could not be regularly deducted by the District Panchayat, Gandhinagar and therefore, there was a default.
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9. Consideration is given to the peculiar facts and circumstances of the case, the accused as a Government servant and the fact that the compensation amount has already been paid and though the notice was served to the Bank, none appeared.
10. The facts of the case suggest that the cheque which was issued was forwarded to the concerned Bank for clearance on 22.12.2005, but it was dishonoured on the ground of "Garnishi order served by the Government". The appellant was a Government servant and the compensation amount has already been paid. The object of the provision in the Negotiable Instruments Act, 1881 is to give priority to the compensatory aspect rather than punitive aspect and provisions of Section 138 of the Negotiable Instruments Act, 1881 is compoundable and due compensation ordered by the Court has been paid by the appellant.
11. In the case of Meters & Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560 and in the case of JIK Industries Ltd. v. Amarlal V. Jumani, (2012) 3 SCC 255, it is observed that even in absence of "consent", the Court can close criminal proceedings against the accused in the case of Page 7 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025 NEUTRAL CITATION R/CR.A/373/2010 JUDGMENT DATED: 25/07/2025 undefined Section 138 of the Negotiable Instruments Act, 1881 if the accused has compensated the complainant.
12. In the result, the appeal is allowed and the appellant is acquitted. The judgment and order dated 17.8.2009 passed by the learned JMFC, Mehsana in Criminal Case no.961 of 2006, confirmed by the judgment and order dated 25.2.2010 passed by the learned Principal Sessions Judge, Mehsana in Criminal Appeal no.103 of 2009 are quashed and set aside.
(GITA GOPI,J) Maulik Page 8 of 8 Uploaded by MAULIK R. PANDYA(HC00205) on Fri Jul 25 2025 Downloaded on : Sat Jul 26 01:05:02 IST 2025