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2026 Supreme(HP) 272

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Sandeep Sharma, J.
Rajesh Chauhan - Petitioners
Versus
M/s Mount Kailash Processed Foods Pvt. Ltd. - Respondent
Cr.MMO No. 219 of 2026
Decided On : 23-03-2026

Advocates Appeared:
For the Petitioner:Mr. Vinod Kumar, Advocate.
For the Respondent:Mr. Anshuman Thakur, Advocate.

Offence under Section 138 NI Act compoundable post-conviction even after appellate and revisional dismissal, upon compromise and full compensation payment; court may recall upholding judgment under Section 147.

Headnote:(A) Negotiable Instruments Act - Sections 138, 147 - Bharatiya Nagarik Suraksha Sanhita, 2023 - Section 528 - Cheque dishonour - Compounding of offence - Offence under Section 138 can be compounded even after conviction by trial court, dismissal of appeal and revision upholding conviction, upon parties entering compromise and accused paying entire compensation awarded - Court exercising power under Section 147 can recall its earlier judgment upholding conviction in light of compromise - Provisions of Section 147 read with Section 320 Cr.P.C. permit compounding post-conviction. (Paras 5,6,7,12,13)

Facts of the case:
Accused issued cheque for discharge of liability which was dishonoured on presentation - Proceedings under Section 138 initiated - Trial court convicted accused and sentenced to imprisonment with compensation - Appeal and revision dismissed upholding conviction - Subsequently parties compromised, entire compensation paid, application filed for compounding.

Findings of Court:
Judgment of conviction and sentence recorded by trial court quashed and set aside - Accused acquitted of charge - Bail bonds discharged.

Issues: Whether court can permit compounding of offence under Section 138 after conviction upheld up to High Court upon subsequent compromise; power to recall own judgment affirming conviction.

Ratio Decidendi: In view of Section 147, offence compoundable at any stage including post-conviction; compromise accepted as entire amount paid, relying on precedents permitting recall of judgment and acquittal upon settlement.

Result: Petition allowed.

Table of Content
1. conviction under ni s.138; parties compromise post-judgment. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. s.147 ni act permits post-conviction compounding; recall judgments. (Para 7 , 8 , 9 , 10 , 11 , 12)
3. conviction quashed upon compounding; petitioner acquitted. (Para 13 , 14)

JUDGMENT :

Sandeep Sharma, J.

By way of instant petition filed under Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 read with Section 147 of the Negotiable Instruments Act, prayer has been made by the petitioner, who stands convicted for his having committed offence under Section 138 of the Negotiable Instruments Act in CIS Case No. 221/2015 (CIS CNR No. HPKI03-000766-2015), for compounding the offence under of the Act.

2. Precisely the facts of the case as emerge from the record are that the respondent instituted proceedings under Section 138 of the Act in the court of Learned Additional Chief Judicial Magistrate Rampur Bushahr, District Shimla, Himachal Pradesh, alleging therein that accused with a view to discharge his liability, issued cheque amounting to Rs. 22,135/-, but fact remains that aforesaid cheque on its presentation to the bank concerned, was dishonoured. Since petitioner-accused failed to make the payment good within the time stipulated in the legal notice, respondent/complainant was compelled to initiate proceedings before the competent Court of law under of the Act.

3. Learned trial Court on the basis of material adduced on record by the respective parties, vide judgment dated 4.10.2019, held the petitioner-accused guilty of having committed offence under Section 138 of the Act and accordingly, convicted and sentenced him to undergo simple imprisonment for six months and pay compensation to the tune of Rs. 26,000/- to the respondent/complainant.

4. Being aggrieved and dissatisfied with the aforesaid judgment of conviction recorded by the court below, accused preferred an appeal in the court of learned Additional Sessions Judge, Kinnaur at Rampur Bushehr, District Shimla, HP., which also came to be dismissed vide judgment dated 4.4.2022. Petitioner accused further laid challenge to the aforesaid judgment before this Court in Cr.MP(M) No. 98 of 2026, which also came to be dismissed by this Court vide judgment dated 3.3.2026, as a consequence of which, judgment of conviction recorded by the learned trial Court came to be upheld.

5. After passing of the judgment dated 3.3.2026 passed by this Court thereby, dismissing the criminal revision petition having been filed by the petitioner-accused, parties have entered into compromise, whereby petitioner-accused has paid the entire amount of compensation to the respondent and in this background, petitioner has approached this court in the instant proceedings filed under Section 528 of BNSS read with Section 147 of the Act, praying therein for compounding of offence.

6. Mr. Anshuman Thakur, learned counsel appearing for the respondent, while fairly acknowledging factum with regard to receipt of entire amount of compensation paid by the petitioner contends that since respondent complainant has already received the entire amount of compensation awarded by the court below, respondent shall have no objection in case prayer made for compounding the offence is accepted and petitioner is acquitted of the offence alleged to have been committed by him under Section 138 of the Negotiable Instruments Act.

7. This Court vide judgment passed in Cr.MP No. 1197 of 2017 in Cr. Revision No. 394 of 2015 titled Gulab Singh v. Vidya Sagar Sharma , while relying upon judgment of Hon'ble Apex Court as well as other Constitutional Courts has already held that court, while exercising power under Section 147 of Act can proceed to compound offence even in those cases, where accused stands convicted. Relevant portion of the order passed by this court in order supra is reproduced as under:

“8. Before acceding to aforesaid joint request having been made by learned counsel for the respective parties, moot question ar

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