[Cites 8, Cited by 0]
Rajasthan High Court - Jodhpur
Santosh Dangi vs Film M/S Royal Sanitary ... on 19 March, 2026
Author: Farjand Ali
Bench: Farjand Ali
[2026:RJ-JD:13661]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc. Application No. 181/2026
Santosh Dangi S/o Chagan Dangi, Aged About 38 Years, Owner
Hopes Square Studio R/o 607, Mangalam Fun Square, Durga
Nursery Road, Dist. Udaipur. Second Residence- Santosh Dangi
S/o Shri Chagan Dangi, R/o Noka, Near Hanuman Temple, Dist.
Udaipur (Raj)
----Petitioner
Versus
1. Firm M/s Royal Sanitary, 12, Otswal Plaza, First
Sundarwas,, Dist. Udaipur
2. State Of Rajasthan, Through Pp
----Respondents
For Petitioner(s) : Mr. Tushar Moad
For Respondent(s) : Mr. N.S. Chandawat, DyGA
HON'BLE MR. JUSTICE FARJAND ALI
Order
REPORTABLE
19/03/2026
1. The law, while empowered to curtail liberty in accordance
with established procedure, cannot permit such curtailment to rest
solely on economic incapacity, for poverty cannot be transmuted
into a ground for incarceration. Liberty, though subject to lawful
restraint, cannot be rendered contingent upon the ability to pay.
The issue that arises for consideration is whether, in a case where
the underlying dispute stands settled, continued incarceration can
be sustained merely because the accused is unable to comply with
a condition of costs.
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2. The present petition has been preferred under Section 482 of
the Code of Criminal Procedure, 1973 (corresponding to Section
528 of the Bharatiya Nagarik Suraksha Sanhita, 2023), seeking
modification of the condition imposed by a co-ordinate Bench of
this Court vide order dated 22.11.2024 passed in S.B. Criminal
Revision Petition No. 1457/2024, whereby, while permitting
compounding of the offence under Section 138 of the Negotiable
Instruments Act, 1881, the petitioner was directed to deposit 15%
of the cheque amount as costs in terms of the judgment rendered
in Damodar S. Prabhu v. Sayed Babalal H reported in (2010)
5 SCC 663.
3. The petitioner stood convicted by the learned Special Judicial
Magistrate (N.I. Act Cases) No.6, Udaipur, vide judgment dated
15.02.2024 passed in Criminal Regular Case No. 7831/2018 for an
offence under Section 138 of the Act of 1881. The appeal
preferred thereagainst came to be dismissed vide judgment dated
11.07.2024. During pendency of the revision petition before this
Court, the parties amicably settled their dispute.
4. Taking note of the compromise, this Court permitted
compounding of the offence and set aside the conviction and
sentence, subject to the condition that the petitioner shall deposit
15% of the cheque amount as costs.
5. It is not in dispute that the petitioner could not comply with
the aforesaid condition. Consequently, the learned trial Court vide
order dated 06.03.2026 issued arrest warrant against the
petitioner for non-compliance of the order dated 22.11.2024 and
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the petitioner was taken into custody, where he presently remains
confined. It is, thus, evident that the petitioner's incarceration is a
direct consequence of non-compliance of the condition imposed by
this Court and not on account of any subsisting adjudication of
guilt.
6. Learned counsel for the petitioner submits that the dispute
between the parties stands fully settled and the complainant has
no surviving grievance. It is contended that the petitioner's
continued incarceration is, in substance, solely attributable to his
inability to deposit the costs and not to any subsisting criminal
liability. It is urged that such deprivation of liberty is
disproportionate and violative of Article 21 of the Constitution of
India.
7. Learned Public Prosecutor, while supporting the legality of
the earlier order, submits that the consequence of non-compliance
of the condition imposed in terms of the judgment in the case of
Damodar S. Prabhu (supra) follows.
8. Heard learned counsel for the parties and perused the
material placed on record.
9. The question that arises for consideration is whether, in a
case where the dispute stands admittedly settled and the
complainant has accepted the compromise, the continued
incarceration of the petitioner can be sustained when the only
impediment to giving effect to such settlement is the petitioner's
inability to deposit the costs.
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10. The Hon'ble Supreme Court in Damodar S. Prabhu v. Sayed
Babalal H. (supra) evolved a graded scheme of costs with the
object of encouraging early compounding and discouraging
delayed settlements in proceedings under Section 138 of the Act
of 1881. The costs so contemplated are regulatory and deterrent
in nature. They are ancillary to the process of compounding and
cannot be equated with a substantive penal consequence. Being
part of a judicially evolved guideline, their application necessarily
admits of flexibility depending upon the facts of each case.
11. The aforesaid position now stands further clarified by the
Hon'ble Supreme Court in Rajeev Khandelwal v. State of
Maharashtra & Anr. [arising out of SLP (Crl.)
No.14340/2025, order dated 04.11.2025], wherein, in a
similar fact situation arising out of a conviction under Section 138
of the Act of 1881 followed by settlement at the revisional stage,
the imposition of costs based on Damodar S. Prabhu was set
aside. The Hon'ble Supreme Court held that the guidelines relating
to costs in Damodar S. Prabhu are not mandatory and are
required to be applied having regard to the facts of each case,
including the financial capacity of the accused and the stand of the
complainant. It was further observed that where the complainant
has no objection to the settlement and the accused demonstrates
inability to comply, insistence on payment of such costs would be
unjustified.
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12. The sweep of Article 21, as expounded in Maneka Gandhi
v. Union of India reported in (1978) 1 SCC 248, mandates that
any deprivation of liberty must be just, fair and reasonable.
13. In Jolly George Varghese v. Bank of Cochin reported in
(1980) 2 SCC 360, the Hon'ble Supreme Court underscored that
deprivation of liberty for non-payment of money is impermissible
unless there exists a finding of wilful refusal despite sufficient
means.
14. In the present case, there is no material on record to
indicate that the petitioner has deliberately avoided payment
despite possessing the capacity to do so. The case set up by the
petitioner is one of financial incapacity.
15. Though the petitioner's custody is formally referable to the
revival of conviction, the undisputed position is that the dispute
stands settled, the complainant has accepted the compromise,
and the petitioner is in custody solely on account of non-
compliance of the condition relating to deposit of costs. Thus, in
substance, the petitioner's continued incarceration is traceable to
his inability to deposit the costs.
16. The offence under Section 138 of the Act of 1881 is primarily
compensatory in character. Once the complainant stands satisfied,
continuation of incarceration solely on account of non-payment of
costs would be disproportionate and would defeat the very object
of compounding. To permit such a consequence would be to allow
a regulatory condition to assume the character of a coercive
deprivation of liberty, which is impermissible.
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17. It is well settled that this Court, in exercise of criminal
jurisdiction, does not possess the power to review its own final
order in view of the bar contained in Section 362 Cr.P.C. (Section
401 BNSS). However, the present exercise does not partake the
character of a review of the earlier order passed by a coordinate
Bench, but is confined to examining the consequence of the
condition imposed therein, in the light of subsequent events and
its impact on the petitioner's personal liberty. The inherent
jurisdiction of this Court can always be invoked to secure the ends
of justice and to prevent abuse of process, particularly where a
condition, though valid at the time of its imposition, operates in a
manner resulting in manifest injustice. In the considered opinion
of this Court, the present case warrants exercise of such
jurisdiction so as to prevent the condition of costs from operating
in a manner that results in incarceration solely on account of
financial incapacity.
18. Where a prosecution under Section 138 of the Negotiable
Instruments Act stands settled and the complainant has no
subsisting grievance, continued incarceration of the accused,
arising solely from non-compliance of a condition of costs imposed
for compounding, cannot be sustained in the absence of wilful
default. Costs contemplated under Damodar S. Prabhu, being
regulatory in nature, cannot be enforced in a manner that results
in deprivation of personal liberty on account of financial incapacity,
particularly when the settlement stands accepted and acted upon,
a position reinforced by the decision of the Hon'ble Supreme Court
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in Rajeev Khandelwal v. State of Maharashtra & Anr. (order dated
04.11.2025).
19. As a consequence of the above discussion, the instant
criminal miscellaneous application is allowed. The condition
imposed by this Court vide order dated 22.11.2024 in S.B.
Criminal Revision Petition No. 1457/2024, directing the petitioner
to deposit 15% of the cheque amount as costs, is hereby waived
in entirety, and the order dated 22.11.2024 passed in S.B.
Criminal Revision Petition No. 1457/2024 shall be given full and
final effect.
20. Consequently, the order dated 06.03.2026 passed by the
learned Special Judicial Magistrate (N.I. Act Cases) No.6, Udaipur,
issuing arrest warrant and committing the petitioner to custody, is
set aside.
21. The petitioner, who is in custody, shall be released forthwith,
if not required in any other case.
(FARJAND ALI),J
371-Pramod/-
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