{"id":248779,"date":"2021-05-26T20:23:38","date_gmt":"2021-05-26T14:53:38","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=248779"},"modified":"2021-06-04T16:49:43","modified_gmt":"2021-06-04T11:19:43","slug":"section-138-ni-act-4","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/05\/26\/section-138-ni-act-4\/","title":{"rendered":"Guj HC | Can offence under S. 138 NI Act compounded even after accused is convicted and sentenced to imprisonment? Read HC&#8217;s ruling"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Gujarat High Court: <\/strong>Vaibhavi D. Nanavati, J., compounded an offence under Section 138 of the Negotiable Instruments Act and set aside the conviction and sentence of the accused, while observing at the same time that generally powers under Section 482 CrPC are not to be exercised when a statutory remedy is available under law.<\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #008000;\"><strong><u>Brief Facts of the Matter<\/u><\/strong><\/span><\/h4>\n<p style=\"text-align: justify;\">Applicant issued a cheque of amount Rs 9,00,000 in favour of the original complainant and on depositing the same, the cheque came to be dishonoured with the notings that \u2018Account Closed\u2019.<\/p>\n<p style=\"text-align: justify;\">After issuance of notice, original complainant instituted the Criminal Complaint about the alleged offence punishable under Section 138 of the Negotiable Instruments Act, 1881.<\/p>\n<p style=\"text-align: justify;\">Trial Court had convicted the applicant imposing 1-year imprisonment and also directed the applicant to pay compensation to the tune of Rs 13,50,000.<\/p>\n<p style=\"text-align: justify;\">Original complainant thereafter instituted Criminal Appeal for enhancement of sentence. But later, both complainant and respondent 2 arrived at a settlement which was reduced in writing form.<\/p>\n<h3 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Analysis, Law and Decision<\/span><\/h3>\n<p style=\"text-align: justify;\">While pronouncing its decision Court stated that it would be apposite to refer to the observation made and guidelines issued by the Supreme Court in the case of <em>Damodar S. Prabhu v. Sayed Babalal H., <\/em><a href=\"http:\/\/www.scconline.com\/DocumentLink\/0a653416\">(2010) 5 SCC 663<\/a>.<\/p>\n<p style=\"text-align: justify;\">Further, the High Court referred to a plethora of decisions with respect to the issue involved in the present matter.<\/p>\n<p style=\"text-align: justify;\">Respondent 2 on 31-03-2021 stated that the parties have arrived at a settlement and the entire amount agreed between the parties was received by respondent 2 and that now he had no objection if the conviction of the applicant with respect to present offence was quashed.<\/p>\n<p style=\"text-align: justify;\">Bench added that,<\/p>\n<p style=\"text-align: justify;\">\u00a0<em>Applying the ratio of various decisions by this Court and the Supreme Court as well as in view of the guidelines as laid down in the case of Damodar S. Prabhu v. Sayed Babalal H., <\/em><a href=\"http:\/\/www.scconline.com\/DocumentLink\/0a653416\">(2010) 5 SCC 663<\/a><em> as also considering the object of Section 138 of the NI Act, which is mainly to inculcate faith in the efficacy of banking operations and credibility of transacting business through cheque as also taking into account the provisions of Section 147 which states that every offence punishable under this Act shall be compoundable.<\/em><\/p>\n<p style=\"text-align: justify;\">High Court also noted that generally the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however, considering the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to the appellate court.<em>\u00a0<\/em><\/p>\n<p style=\"text-align: justify;\">In Court\u2019s opinion, taking into account the guidelines as laid down in the case of the above stated Supreme Court decision and the fact that the parties have settled the dispute amicably, the compounding of the offence was required to be permitted.<\/p>\n<p style=\"text-align: justify;\">\u00a0Hence the present application was allowed. The decision passed by Additional Senior Civil Judge and Additional Chief Judicial Magistrate under Section 138 NI Act was set aside. [Khokhar iliyas Bismillah Khan v. State of Gujarat, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/X9EE426e\"><b>2021 SCC OnLine Guj 852<\/b><\/a>, decided on 06-05-2021]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gujarat High Court: Vaibhavi D. Nanavati, J., compounded an offence under Section 138 of the Negotiable Instruments Act and set aside the <\/p>\n","protected":false},"author":8808,"featured_media":206146,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[45995,2862,29785,23584],"class_list":["post-248779","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-compoundable-offence","tag-dishonour_of_cheque","tag-law","tag-section-138-ni-act"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Guj HC | Can offence under S. 138 NI Act compounded even after accused is convicted and sentenced to imprisonment? 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Acquittal must be challenged by appeal, not revision: Kerala HC","author":"Sunaina","date":"February 16, 2026","format":false,"excerpt":"\u201cA complainant under Section 138 of the NI Act is a victim as defined in Section 2(wa) CrPC as the expression 'victim' includes not only the person who has suffered any loss or injury caused by reason of any act or omission for which the accused person has been charged,\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Acquittal in cheque dishonour case","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/Acquittal-in-cheque-dishonour-case.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/Acquittal-in-cheque-dishonour-case.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/Acquittal-in-cheque-dishonour-case.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/02\/Acquittal-in-cheque-dishonour-case.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":184604,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/01\/29\/offence-s-138-ni-act-compounded-light-settlement-parties\/","url_meta":{"origin":248779,"position":1},"title":"Offence under S. 138 of NI Act compounded in light of settlement between the parties","author":"Saba","date":"January 29, 2018","format":false,"excerpt":"Himachal Pradesh High Court: A Single Judge Bench comprising of Sandeep Sharma, J., decided a criminal revision petition filed under Section 397 read with Section 401 CrPC, wherein it was held that the matter under Section 138 of Negotiable Instruments Act which has been amicably settled between the parties, could\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/11\/Himachal-HC_1.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":338352,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/01\/03\/andhra-pradesh-hc-quashes-138-ni-act-case-invalid-cheque-merged-bank-legal-news\/","url_meta":{"origin":248779,"position":2},"title":"Andhra Pradesh High Court quashes NI Act proceedings due to invalid cheque issued from merged bank","author":"Arunima","date":"January 3, 2025","format":false,"excerpt":"Andhra Pradesh High Court quashed proceedings under Section 138 NI Act, ruling that the dishonor of a cheque issued on a State Bank of Hyderabad account, rendered invalid due to the bank\u2019s merger with SBI and expiry of its validity in March 2018, does not attract liability under the NI\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Andhra Pradesh High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Andhra-Pradesh-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Andhra-Pradesh-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Andhra-Pradesh-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Andhra-Pradesh-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":213936,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/04\/25\/tri-hc-offence-under-s-138-ni-act-may-be-compounded-even-after-conviction-of-accused-and-affirmation-thereof-by-sessions-judge\/","url_meta":{"origin":248779,"position":3},"title":"Tri HC | Offence under S. 138 NI Act may be compounded even after conviction of accused and affirmation thereof by Sessions Judge","author":"Bhumika Indulia","date":"April 25, 2019","format":false,"excerpt":"Tripura High Court:\u00a0Sanjay Karol, CJ allowed the compounding\u00a0of offence in a case where the accused had been convicted for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The conviction recorded by the trial court was also affirmed by the Sessions Judge in appeal. Now, the convict\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":316446,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/08\/delhi-court-acquits-accused-under-section-138-negotiable-instruments-act-failure-establish-debt-adjustment-legal-news\/","url_meta":{"origin":248779,"position":4},"title":"Delhi Court acquits accused under Section 138 NI Act on failure to establish debt adjustment","author":"Arunima","date":"March 8, 2024","format":false,"excerpt":"The complainant woefully failed to account for the amount of Rs 6,11,071\/- which was due on him towards the accused. Therefore, it cannot be said that the amount represented on the cheque in question was a legally recoverable debt.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"failure to establish debt adjustment","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":250568,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/07\/01\/drawers-signature-differs\/","url_meta":{"origin":248779,"position":5},"title":"Madras HC | Cheque returned with endorsement &#8220;drawers signature differs&#8221;. If complainant fails to prove accused was not stranger, can he still be prosecuted under S. 138 NI Act? Court answers","author":"Bhumika Indulia","date":"July 1, 2021","format":false,"excerpt":"Madras High Court: P. Velmurugan, J., addressed a matter revolving around the offence under Section 138 of the Negotiable Instruments Act. A complaint was filed for an alleged offence under Section 138 of the Negotiable Instruments Act, 1881. Judicial Magistrate found the respondent guilty of offence under Section 138 NI\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/248779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=248779"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/248779\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/206146"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=248779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=248779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=248779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}