Negotiable Instruments Act's Section 138 allows for compoundable offences, emphasizing mutual settlement between parties as a basis for appeal success.

Order :

SANDEEP SHAH, J.

1. The present revision petition has been filed challenging the judgment/order dated 22.01.2025, passed by the learned Additional Chief Judicial Magistrate, Osian, District Jodhpur, IN Criminal Case No.430/2011 (Girdhari Singh v. Rafiq Khan) whereby the appellant was convicted under Section 138 of the Negotiable Instruments Act, 1881 and imposed punishment of simple imprisonment of six months and also fine of Rs.1,25,000/-.

2. The appellant has also challenged the order passed by the learned Appellate Court that is the learned Sessions Judge, Jodhpur, District Jodhpur in Criminal Appeal No.07/2025 (Rafiq Khan v. Girdhari Singh & Ors.) dated 29.07.2025, whereby the appeal against the above-mentioned order was dismissed.

3. Learned counsel for petitioner- Mr. Bhawani Singh along with Mr. Abdul Kalam and learned counsel for respondent No.2 -Mr. Hitendra Singh have submitted that both the parties have settled the matter and therefore, in view of the provisions of Section 147 of the Negotiable Instruments Act, 1881 , the present revision petition may be allowed. They submit that a compromise deed was executed on 28.08.2025, duly signed by both the parties in the presence of witnesses, fortifying the fact that the respondent has received the entire 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. Hitendra Singh appearing for complainant Girdhari Singh S/o Sh. Sumer Singh 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 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