Back
2026 Supreme(Guj) 455
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
S.V. PINTO, J.
Aslam Ibrahim Dal - Applicant
Versus
State Of Gujarat & Anr. – Respondents
R/Criminal Revision Application (Against Conviction Negotiable Instrument Act) No. 72 of 2026
Decided On : 15-06-2026
For the Applicant : Mr. Vatsal D. Ruparel
For the Respondents: Mr. Kush N. Bavishi, Mr. Krutik A. Parikh, APP
The offence of cheque dishonour under the Negotiable Instruments Act is essentially a civil wrong categorized as criminal. Consequently, it remains compoundable at any stage of litigation, including post-conviction, to facilitate compensatory resolution and reduce unnecessary judicial burden, provided appropriate costs are paid.
Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 147 - Dishonour of cheque - Compounding of offence - Post-conviction settlement - Nature of offence under the Act is primarily compensatory and constitutes a civil wrong in criminal clothing - Section 147 permits compounding at any stage of proceedings, including revision or appeal, notwithstanding the Code of Criminal Procedure - Policy of the law favors resolution of private disputes to minimize litigation - Payment of costs is a standard prerequisite when compounding occurs at advanced stages of the judicial process. (Paras 11, 12, 14)
(B) Practice and Procedure - Settlement - When parties arrive at a voluntary settlement, courts shall facilitate the compounding of the offence in the interest of justice - Judicial intervention should not override or obstruct amicable resolutions that satisfy the compensatory objective of the statute. (Paras 12, 15)
Facts of the case:
The accused was convicted for the offence of dishonour of a cheque and sentenced to simple imprisonment and a fine, which was subsequently confirmed by the appellate court. The accused challenged the conviction in a revision application. During the pendency of the revision, the parties arrived at an amicable settlement, with the complainant receiving the full settlement amount and expressing a voluntary desire to terminate the prosecution.
Findings of Court:
The court observed that the offence, while criminal in nature, is essentially civil and compensatory. Guided by the legal principle that Section 147 of the Act overrides procedural restrictions, the court found that compounding is permissible even post-conviction. It directed the accused to deposit a statutory percentage of the cheque amount as costs to the legal services committee as a condition for the acquittal.
Issues: The central issue was whether a criminal conviction and sentence for the offence of dishonour of a cheque could be set aside based on a post-conviction settlement and what conditions should be imposed to facilitate such compounding.
Ratio Decidendi: The court reasoned that the legislative intent behind the Act—facilitating business credibility and ensuring compensation—is best served by encouraging voluntary settlements. Since the dispute is essentially private and compensatory, the court holds the power to permit compounding at any stage to avoid redundant litigation, provided the costs are paid to the appropriate legal authority.
Result: Revision application allowed; conviction and sentence set aside; offence compounded; acquittal granted subject to payment of costs.
| Table of Content |
|---|
| 1. procedural history and status of conviction challenge. (Para 1 , 2 , 3 , 4 , 5) |
| 2. voluntary compromise and settlement between parties. (Para 6 , 7 , 8 , 9 , 10) |
| 3. compounding of section 138 ni act offences post-conviction. (Para 11 , 12 , 13 , 14) |
| 4. final order quashing conviction subject to cost conditions. (Para 15 , 16 , 17 , 18 , 19) |
ORDER :
S.V. PINTO, J.
1. Rule. Learned APP waives service of rule for the respondent No.1-State and learned advocate Mr. Kush N. Bavishi for the respondent No.2.
2. Learned advocate Mr. Vatsal D. Ruparel for the applicant and learned advocate Mr. Kush N. Bavishi for the respondent no.2 jointly submit that the matter is amicably settled between the parties and the present application be taken up for final hearing and be disposed of accordingly.
3. In view of the above submissions made by the learned advocates for the respective parties, the matter is taken up for final hearing.
4. By way of the present application, the applicant – accused has prayed to quash and set aside the judgment and order of conviction passed by the learned Additional Sessions Judge, Jamnagar in Criminal Appeal No. 522 of 2024 dated 06.12.2025 confirming the judgment and order passed by the learned 5th Additional Senior Civil Judge & Additional Chief Judicial Magistrate, Jamnagar in Criminal Case No. 3180 of 2024 dated 04.12.2024, whereby, the present applicant - accused was sentenced simple imprisonment for one year and fine of Rs.2,50,000/-, and in default, simple imprisonment for six months for the offence under Section 138 of the Negotiable Instruments Act, 1881.
5. Heard learned advocate Mr. Vatsal D. Ruparel for the applicant, learned APP Mr. Krutik A. Parikh for the respondent – State and learned advocate Mr. Kush N. Bavishi for the respondent no.2.
6. Learned advocate Mr. Vatsal D. Ruparel for the applicant submits that the dispute between the parties has been amicably settled and the respondent no.2 – original complainant has received the entire settlement amount and does not wish to prosecute the matter further. The compromise has been entered into voluntarily, without any coercion, undue influence or pressure and, therefore, the respondent no.2 has no objection if the impugned judgment and order of conviction as well as all other consequential proceedings arising pursuant thereto are quashed against the applicant – accused.
7. Learned advocate Mr. Kush N. Bavishi for the respondent no.2 – original complainant submits that the respondent no.2 – original complainant has appeared through online mode and has produced a copy of affidavit of the respondent no.2 – original complainant, which is taken on record.
8. Learned APP Mr. Krutik A. Parikh for the respondent no.1 – State submits that the impugned judgment and order of sentence is just and proper; however, considering the fact that the dispute between the parties is amicably settled, necessary order may be passed.
9. The respondent no.2 – original complainant is appearing through online mode, and on inquiry, submits that the dispute between them has been settled amicably and the entire settlement amount has been received and she does not wish to prosecute the matter further. She admits to the contents of the affidavit and submits that the compromise has been entered into her own free will without any fear, threat and coercion.
10. The affidavit filed by the respondent no. 2 – original complainant reads as under:
“1. I say and submit that I've filed private complaint u/s 138 Ni Act viz. Criminal Case No. 3180 of 2024 in which by order dated 4.12.2024 the applicant came to be convicted u/s 138 of NI Act by by Ld. Chief Judicial Magistrate. The said order of conviction came to be challenged by the applicant before the sessions court by way of filing Criminal Appeal No. 522 of 2024 and after hearing the parties, the sessions court please to confirmed the conviction order and asked the applicant to serve the sentence, being aggrieved, the applicant preferred c
