Punjab-Haryana High Court

Varinder Kumar Bhardwaj Alias Virender ... vs Manjit Singh And Another on 19 November, 2025

                    1.               The challenge in the present criminal revision is to the order

                    dated 23.04.2024
                          23.04.202 passed by learned Addl. Sessions Judge (Fast Track

                    Court) Ferozepur,
                           Ferozepur, dismissing the appeal preferred against the judgment of

                    conviction and order of sentence dated 01.04.2022 passed by learned

                    Judicial Magistrate Ist Class, Ferozepur,, vide which the peti
                                                                              petitioner was

                    convicted and sentenced to undergo rigorous imprisonment for 1 year and

                    3 months under Section 138 of NI Act and to pay compensation to the

                    tune of cheque amount alongwith interest @ 9% per annum.

                    2.         The facts relevant as narrated in the complain
                                                                     complaint filed under Section

PARVEEN KUMAR
2025.11.21 19:00
I attest to the accuracy and
integrity of this
order/judgment.
                     138 of the NI Act are that the accused-petitioner borrowed a sum of Rs.5

                    lakh from the complainant-respondent No.1 on interest @ 1% per annum

and in discharge of his liability, he issued cheque No.047277 dated

06.03.2018 for a sum of Rs.5 lakh. However, on presentation thereof, the

same was dishonoured and returned with the remarks "Funds Insufficient".

Despite issuance of legal notice, the petitioner failed to make the payment

within the stipulated period. The proceedings against him were initiated

under Section 138 of the NI Act, pursuant to which, he appeared and was

released on bail. On finding prima facie case under Section 138 of the NI

Act, notice of accusation was served upon him, to which he pleaded not

guilty and claimed trial.

3. In order to prove its case, complainant examined himself as

PW 1 and also led documentary evidence. On closure of the evidence,

statement of accused-petitioner under Section 313 Cr.P.C. was recorded,

he denied all the allegations raised against him and pleaded innocence. In

his defence, he examined DW 1 Varinder Kumar and DW 2 Madan Lal.

4. After scrutinizing the evidence led by the parties, the trial

Court came to the conclusion that the complainant has successfully

proved his case against the petitioner-accused, and convicted and

sentenced him, as mentioned in para no.1 above. Aggrieved convict-

petitioner filed appeal, which was dismissed by learned Addl. Sessions

Judge (Fast Track Court), Ferozepur, vide impugned judgment dated

23.04.2024.

5. Hence, the present revision petition.

6. Learned counsel for the petitioner submits that the matter has

since been settled between the parties andrespondent No.1 has submitted

affidavit dated 04.07.2024, Annexure A-1, in this regard, as per which he

has received the entire amount and nothing is due towards him.

7. Learned counsel for complainant-respondent No.1 affirms

the factum of compromise arrived at between them.

Learned counsel fo

the petitioner is a poor person

and sole bread earner of the family. The petitioner has with great

difficulty managed to collect the money and settled the dispute as he

wanted to put an end to the same, seven years having gone by.

9. It is apposite to refer to the judgment of Hon'ble The

Supreme Court in B.V.Seshaiah vs. The State of Telangana and

another 2023 Live Law (SC) 75, wherein it was held thus:

"10. In the case of M/S Meters and Instruments Private Limited & Anr. Vs Kanchan Mehta1,this court held that the nature of offence under section 138 of the N.I Act is primarily related to a civil wrong and has been specifically made a compoundable offence. The relevant paragraph of the judgment has been extracted herein:

"This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions' cheques were issued merely as a device to defraud the creditors. Dishonor of cheque causes incalculable loss, injury and inconvenience to the Vide the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 payee and credibility of business transactions suffers a setback. At the same time, it was also noted that nature

of offence under Section 138 primarily related to a civil wrong and the 2002 amendment specifically made it compoundable."

11. This is a very clear case of the parties entering into an agreement and compounding the offence to save themselves from the process of litigation. When such a step has been taken by the parties, and the law very clearly allows them to do the same, the High Court then cannot override such compounding and impose its will."

10. Hon'ble The Supreme Court in the case of K.Subramanian

vs. R.Rajathi (2010) 15 SCC 352, has held as under:-

"6. Having regard to the salutary provisions of Section 147 of Negotiable Instruments Act read with Section 320 of the Code of Criminal Procedure, this Court is of the opinion that in view of the compromise arrived at between the parties, the petitioner should be permitted to compound the offence committed by him under Section 138 of the Code.

7. xx xx xx

8. The CRL.M.P. No.12804 of 2009 in which the prayer is made by petitioner to permit him to produce affidavits sworn by him on December 1, 2008 as well as affidavit sworn by P. Kaliappan power of attorney holder of R. Rajathi on December 1, 2008, as additional documents is allowed. CRL. M.P. No.12803 of 2009 in which the petitioner has prayed to permit him to compound the offence and acquit him by setting aside the conviction recorded in Criminal case No. 726/2003 under Section 138 of the Negotiable Instruments Act by Learned Judicial Magistrate, Karur is allowed. The petitioner is permitted to compound the offence. The Order of conviction and sentence recorded by all the Courts are hereby set aside and petitioner is acquitted of the charge leveled against him."

11. The compounding of the offence at later stages of litigation

in cases under Section 138 of NI Act has also been held to be permissible

by Hon'ble The Supreme Court in a case of K.M. Ibrahim vs. K.P.

Mohammed & Anr., 2009 (14) SCALE 262, wherein it was held as

under:-

"11. As far as the non-obstante clause included in Section 147 of the 1881 Act is concerned, the 1881 Act being a special statute, the provisions of Section 147 will have an overriding effect over the provisions of the Code relating to compounding of offences.

12. It is true that the application under Section 147 of the Negotiable Instruments Act was made by the parties after the proceedings had been concluded before the Appellate Forum. However, Section 147 of the aforesaid Act does not bar the parties from compounding an offence under Section 138 even at the appellate stage of the proceedings. Accordingly, we find no reason to reject the application under Section 147 of the aforesaid Act even in a proceeding under Article 136 of the Constitution."

12. Reiterating the aforesaid Hon'ble The Supreme Court in the

case of Damodar S.Prabhu vs. Sayed Babalal H. 2010(5) SCC 663 has

held that in case of dishonour of cheque, accused convicted, there is no

stage prescribed for compounding of offence under Section 147 of the Act

and it was observed that "It is true that the application under Section 147

of the Negotiable Instruments Act was made by the parties after the

proceedings had been concluded before the Appellate Forum. However,

Section 147 of the aforesaid Act does not bar the parties from

compounding an offence under Section 138 even at the appellate stage of

the proceedings." It was further observed that, "Even though the

imposition of costs by the competent court is a matter of discretion, the

scale of costs has been suggested in the interest of uniformity. The