Rajasthan High Court - Jodhpur
Lalu Ram Dangi vs Madan Lal Singhvi (2025:Rj-Jd:43804) on 6 October, 2025
[2025:RJ-JD:43804]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Revision Petition No. 1425/2023
Lalu Ram Dangi S/o Late Shri Megha Dangi, Aged About 63
Years, Residing At Village Nauwa, Tehsil Mavli, Dist. Udaipur,
Rajasthan.
----Petitioner
Versus
1. Madan Lal Singhvi S/o Shri Suraj Mal Singhvi, Residing At
16, Nakoda Complex, Sector No. 4, Udaipur, Rajasthan.
2. State Of Rajasthan, Through Pp
----Respondents
For Petitioner(s) : Mr. Vishwas Khatri
For Respondent(s) : Mr. Narendra Gehlot, PP
Mr. Love Jain
HON'BLE MR. JUSTICE SANDEEP SHAH
Order
06/10/2025
1. The present revision petition has been filed by the petitioner
challenging the judgment dated 29.11.2022, passed by the
learned Special Judicial Magistrate No.4 (NI Cases), Udaipur in
Criminal Case No. 4882/2014 whereby the learned trial Court has
convicted the petitioner under Section 138 of the Negotiable
Instruments Act, 1881 and imposed punishment of 1 year simple
imprisonment along with fine of Rs.3,40,000/-.
2. The petitioner has also challenged the judgment dated
19.08.2023 passed by the learned Special Judge, Sessions Court,
Udaipur in Criminal Appeal No.136/2022 "Laluram v. Madanlal
Singhvi & Anr.", whereby, the appeal assailing the above-
mentioned order was dismissed.
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3. Learned counsel for petitioner submits that both the parties
have settled the matter and therefore, in view of the provision of
Section 147 of the Negotiable Instruments Act, 1881, the present
revision petition may be allowed. He submits that a settlement
deed was executed on 06.10.2024 by both the parties in the
presence of witnesses, fortifying the fact that the respondent has
received the entire outstanding amount due and has no objection
if the revision petition is allowed on the basis of the said
compromise.
4. On specific query, the learned counsel Mr. Love Jain for
complainant Madan Lal Singhvi S/o Shri Suraj Mal Singhvi stated
that in view of the fact that the parties have settled the issue and
the amount has been paid, he has no objection if the present
revision petition is allowed.
5. Considered the spirit of the provisions of Section 147 of the
Negotiable Instruments Act, 1881, which provides as under:-
"147. Offences to be compoundable.-Notwithstanding
anything contained in the Code of Criminal Procedure, 1973
(2 of 1974), every offence punishable under this Act shall be
compoundable"
6. In the case of Damodar S. Prabhu vs. Sayed Babalal H
reported at 2010 (2) SCC (Cri) 1328, the Hon'ble Apex Court had
formulated the guidelines for compounding the offence under
Section 138 N.I. Act wherein in para 21, it was pleased to observe
as under:-
"With regard to the progression of litigation in cheque
bouncing cases, the learned Attorney General has urged this
Court to frame guidelines for a graded scheme of imposing costs
on parties who unduly delay compounding of the offence. It was
submitted that the requirement of deposit of the costs will act as
a deterrent for delayed composition, since at present, free and
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easy compounding of offences at any stage, however belated,
gives an incentive to the drawer of the cheque to delay settling
the cases for years. An application for compounding made after
several years not only results in the system being burdened but
the complainant is also deprived of effective justice. In view of
this submission, we direct that the following guidelines be
followed:-
THE GUIDELINES
(i) In the circumstances, it is proposed as follows:
(a) That directions can be given that the Writ of Summons
be suitably modified making it clear to the accused that he could
make an application for compounding of the offences at the first
or second hearing of the case and that if such an application is
made, compounding may be allowed by the court without
imposing any costs on the accused.
(b) If the accused does not make an application for
compounding as aforesaid, then if an application for compounding
is made before the Magistrate at a subsequent stage,
compounding can be allowed subject to the condition that the
accused will be required to pay 10% of the cheque amount to be
deposited as a condition for compounding with the Legal Services
Authority, or such authority as the Court deems fit.
(c) Similarly, if the application for compounding is made
before the Sessions Court or a High Court in revision or appeal,
such compounding may be allowed on the condition that the
accused pays 15% of the cheque amount by way of costs.
(d) Finally, if the application for compounding is made
before the Supreme Court, the figure would increase to 20% of
the cheque amount.
7. In the case of M/s. Meters and Instruments Private
Limited and Anr. vs. Kanchan Mehta reported at 2018 (1) SCC
560, the Hon'ble Apex Court in para 18, was pleased to observe as
under:-
i) Offence under Section 138 of the Act is primarily a civil wrong.
Burden of proof is on accused in view presumption under Section
139 but the standard of such proof is "preponderance of
probabilities". The same has to be normally tried summarily as
per provisions of summary trial under the Cr.P.C. but with such
variation as may be appropriate to proceedings under Chapter
XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will
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apply and the Court can close the proceedings and discharge the
accused on satisfaction that the cheque amount with assessed
costs and interest is paid and if there is no reason to proceed
with the punitive aspect.
(ii) The object of the provision being primarily compensatory,
punitive element being mainly with the object of enforcing the
compensatory element, compounding at the initial stage has to
be encouraged but is not debarred at later stage subject to
appropriate compensation as may be found acceptable to the
parties or the Court.
(iii) Though compounding requires consent of both parties, even
in absence of such consent, the Court, in the interests of justice,
on being satisfied that the complainant has been duly
compensated, can in its discretion close the proceedings and
discharge the accused.
(iv)Procedure for trial of cases under Chapter XVII of the Act has
normally to be summary. The discretion of the Magistrate under
second proviso to Section 143, to hold that it was undesirable to
try the case summarily as sentence of more than one year may
have to be passed, is to be exercised after considering the further
fact that apart from the sentence of imprisonment, the Court has
jurisdiction under Section 357(3) Cr.P.C. to award suitable
compensation with default sentence under Section 64 IPC and
with further powers of recovery under Section 431 Cr.P.C. With
this approach, prison sentence of more than one year may not be
required in all cases.
(v) Since evidence of the complaint can be given on affidavit,
subject to the Court summoning the person giving affidavit and
examining him and the bank's slip being prima facie evidence of
the dishonor of cheque, it is unnecessary for the Magistrate to
record any further preliminary evidence. Such affidavit evidence
can be read as evidence at all stages of trial or other
proceedings. The manner of examination of the person giving
affidavit can be as per Section 264 Cr.P.C. The scheme is to
follow summary procedure except where exercise of power under
second proviso to Section 143 becomes necessary, where
sentence of one year may have to be awarded and compensation
under Section 357(3) is considered inadequate, having regard to
the amount of the cheque, the financial capacity and the conduct
of the accused or any other circumstances'.
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8. The Hon'ble Apex Court in the case of Vinay Devanna
Nayak vs. Ryot Seva Sahkari Bank Limited reported at AIR
2008 SC 716 was pleased to observe as under:-
"18. Taking into consideration even the said provision (Section
147) and the primary object underlying Section 138, in our
judgment, there is no reason to refuse compromise between the
parties. We, therefore, dispose of the appeal on the basis of the
settlement arrived at between the appellant and the respondent.
19. For the foregoing reasons the appeal deserves to be allowed
and is accordingly allowed by holding that since the matter has
been compromised between the parties and the amount of
Rs.45,000/- has been paid by the appellant towards full and final
settlement to the respondent-bank towards its dues, the
appellant is entitled to acquittal. The order of conviction and
sentence recorded by all courts is set aside and he is acquitted of
the charge levelled against him."
9. Recently, the Apex Court considering the judgment of
Damodar S. Prabhu (supra) in the case of Sanjabij Tari v.
Kishore S. Borcar & Anr. reported in 2025 INSC 1158 had
issued the guidelines for compounding the offence under Section
138 N.I. Act wherein in para 38, it was pleased to observe as
under:-
"38. Since a very large number of cheque bouncing cases are still
pending and interest rates have fallen in the last few years, this
Court is of the view that it is time to 'revisit and tweak the
guidelines'. Accordingly, the aforesaid guidelines of compounding
are modified as under:-
(a) If the accused pays the cheque amount before recording
of his
evidence (namely defence evidence), then the Trial Court
may allow compounding of the offence without imposing
any cost or penalty on the accused.
(b) If the accused makes the payment of the cheque
amount post the recording of his evidence but prior to the
pronouncement of judgment by the Trial Court, the
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Magistrate may allow compounding of the offence on
payment of additional 5% of the cheque amount with the
Legal Services Authority or such other Authority as the
Court deems fit.
(c) Similarly, if the payment of cheque amount is made
before the Sessions Court or a High Court in Revision or
Appeal, such Court may compound the offence on the
condition that the accused pays 7.5% of the cheque
amount by way of costs.
(d) Finally, if the cheque amount is tendered before this
Court, the figure would increase to 10% of the cheque
amount."
10. Considering the statements made by both the learned
counsel and after perusal of settlement deed dated 06.10.2024 as
also, taking guidance from the judgments referred to supra, the
present revision petition is allowed in view of the compromise
entered between parties.
11. However, since the compromise has been arrived at after
rejection of the appeal preferred by the petitioner, a cost of 7.5%
of the cheque amount deserves to be imposed upon the petitioner
in light of the decision rendered by the Hon'ble Apex Court in the
case of Sanjabij Tari (supra).
12. Accordingly, the conviction and sentence of imprisonment
awarded to the petitioner for offence under Section 138 NI Act
vide judgment dated 29.11.2022, passed by the learned Special
Judicial Magistrate No.4 (NI Cases), Udaipur in Criminal Case No.
4882/2014 "Madan Lal Singhvi v. Laluram Dagi" and judgment
dated 19.08.2023 passed by the learned Special Judge, Sessions
Court, Udaipur in Criminal Appeal No.136/2022 "Laluram v.
Madanlal Singhvi & Anr." are hereby quashed set aside on the
basis of the aforesaid compromise subject to deposition of cost of
7.5% of the cheque amount by the petitioner. The cost shall be
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deposited by the petitioner before the Rajasthan State Legal
Services Authority, Jodhpur within a period of one month from
today. In case, the cost is not deposited by the petitioner before
the Rajasthan State Legal Services Authority, Jodhpur within the
stipulated period, the revision petition may be listed before this
Court for passing appropriate orders.
13. The revision petition is allowed in the above terms.
Suspension of Sentence application is already decided.
14. Record of the case be sent back forthwith.
15. Copy of this order be sent to the Rajasthan State Legal
Services Authority, Jodhpur.
(SANDEEP SHAH),J
606-mohit/-
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