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
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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
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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
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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.
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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
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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
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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
