1. Conviction under Section 138 of the Negotiable Instruments Act — Appeal against dismissal of criminal revision by the High Court. (Para 2 , 3 )
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2025 Supreme(SC) 1458
SUPREME COURT OF INDIA
DIPANKAR DATTA AND MANMOHAN, JJ.
Santosh Kumar Jha @ Santosh Jha – Appellant
Versus
State Of Jharkhand And Another – Respondent
Criminal Appeal No.107 Of 2025 (Arising out of Special Leave Petition (Crl.) No. 14806 of 2024)
Decided on : 06-01-2025
Important Points
The Court allowed the compounding of an offence under Section 138 of the Negotiable Instruments Act, 1881, pursuant to Section 147, following a settlement between the parties, and set aside the conviction and sentence, subject to a deposit with the State Legal Services Authority.
Subject
Criminal Law - Negotiable Instruments
Act Referred
Headnote
(A) Negotiable Instruments Act, 1881 - Section 138 and Section 147 - Criminal appeal against conviction for dishonored cheque - Appellant convicted and sentenced to three months imprisonment and ordered to pay Rs.1,18,000/- as compensation; revision by High Court dismissed - Parties settled their disputes - Compounding of the offence granted and conviction set aside, with costs directed to be deposited with Legal Services Authority. (Paras 1-7)
(B) Settlement - Compounding of offences under the N.I. Act is permissible when parties have mutually agreed to resolve the dispute, requiring the court’s approval for passage of such settlement. (Paras 5-6)
(B) Settlement - Compounding of offences under the N.I. Act is permissible when parties have mutually agreed to resolve the dispute, requiring the court’s approval for passage of such settlement. (Paras 5-6)
Legal Category Hierarchy
Table of Contents
2. Parties submitted that they have settled their inter se disputes and differences as reduced to writing in terms of settlement. (Para 4 )
3. The court observed that the complainant received full and final settlement of dues and the counsel expressed no objection to compounding. (Para 5 )
4. Offence under Section 138 of the Negotiable Instruments Act is compoundable under Section 147 of the Act upon settlement of dues. (Para 5 )
5. Appeal allowed — Conviction and sentence set aside — Appellant acquitted subject to deposit with the State Legal Services Authority. (Para 5 , 6 , 7 )
6. Is an offence under Section 138 of the Negotiable Instruments Act compoundable?
Yes, such offences are compoundable under Section 147 of the Negotiable Instruments Act, 1881, especially when the parties have settled their disputes and the complainant has received the dues. (Para 5 )
7. Can the court mandate a payment to a legal services authority when compounding a Section 138 NI Act offence?
Yes, the court may direct the appellant to deposit a specified sum with the State Legal Services Authority following established judicial guidelines. (Para 5 )
ORDER :
1. Leave granted.
2. This appeal is directed against the judgment and order dated 25th April, 2024 passed by the High Court of Jharkhand at Ranchi on Criminal Revision No. 202 of 2019.
3. The appellant was convicted by the trial court for commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881[N.I. Act] and sentenced to simple imprisonment for 3 (three) months; also compensation of Rs. 1,18,000/- (Rupees one lakh eighteen thousand) was directed to be paid to the respondent no.2 (complainant). An appeal was carried before the sessions court, which failed. The appellant thereafter approached the High Court in revision but without success. By the impugned order, the revision came to be dismissed.
4. In the course of hearing of this appeal, we have been informed by Mr. Gaurav, learned counsel for the appellant and Mr. Surya Kant, learned counsel for the respondent no.2 that the parties have since settled their inter se disputes and differences and the terms of settlement have been reduced to writing in the form of 'Terms of Settlement', which is Annexure P-4 to the paper book. Money receipts bearing the signature of the respondent no.2 are also part of the paper book.
5. Since the money receipts evince that the respondent no.2 has received Rs. 1,18,000/- (Rupees one lakh eighteen thousand) towards full and final settlement of his dues from the appellant and learned counsel appearing on behalf of the said respondent has no objection, we allow compounding of the offence in terms of Section 147 of the N.I. Act, set aside the impugned order of the High Court together with the appellate order and the conviction and sentence recorded by the trial court, and acquit the appellant of the charge against him subject to the condition that within a period of two months from date, the appellant shall deposit a sum of Rs.10,000/- with the Jharkhand State Legal Services Authority. This deposit is directed in terms of the guidelines laid down by this Court in the decision in Damodar S Prabhu vs. Sayed Babalal H. , (2010) 5 SCC 663 .
6. The appellant is discharged of his bail bond. However, should the appellant fail to make the requisite deposit, as ordered, law shall take its own course.
7. The appeal is, accordingly, allowed on the aforesaid terms.
8. Pending application(s), if any, shall stand disposed of.
