IMPORTANT POINT
Compounding of offences under Section 138 of the Negotiable Instruments Act is permissible post-conviction, provided conditions regarding costs are met.

JUDGMENT :

Rakesh Thapliyal, J.

1. The present C482 application is moved along with the Compounding Application (IA/1/2024), for quashing of the judgment and order dated 23.03.2023 passed by the IInd Judicial Magistrate, Haridwar, in Complaint Case No. 167 of 2020 ‘Sangeeta Aggarwal vs. Mahesh Chandra Kushwaha’ as well as the judgment and order dated 21.10.2023 passed by the Vth Additional Sessions Judge in Criminal Appeal No. 55 of 2023 ‘Mahesh Chandra Kushwaha vs. State of Uttarakhand and another’, whereby, the judgment passed by the Trial Court dated 23.03.2023 was affirmed.

2. Present applicant is in jail. Son of the applicant and the respondent no. 2/complainant are present in Court and they are identified by their respective counsel. The compounding application is supported with the affidavit of the son of the applicant and respondent no. 2.

3. It is a case in which the complaint was filed by the respondent no. 2 under Section 138 of Negotiable Instruments Act in respect of a cheque of an amount of Rs.12,00,000/- (Rupees Twelve Lakh Only) in which after taking cognizance the proceedings were initiated and concluded and the present applicant was convicted by the judgment dated 23.03.2023 passed by the IInd Judicial Magistrate, Haridwar.

4. Being aggrieved with the said judgment, a criminal appeal, bearing Criminal Appeal No. 55 of 2023 was also preferred by the applicant, which was dismissed and the judgment passed by the Trial Court was affirmed.

5. Now, the compounding application has been moved with this contention that the accused applicant settled the dispute with the respondent no. 2/complainant and paid a sum of Rs.10,60,000/- to the respondent no. 2/ complainant. This Court interacts with the respondent no. 2/complainant and she submits that she is satisfied with this amount and she does not want to proceed further.

6. The Hon’ble Supreme Court in the case of Damodar S. Prabhu vs. Sayed Babalal H., 2010 (5) SCC 663 framed certain guidelines with regard to the litigation in cheque bouncing cases, which are as follows:-

“21. 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 to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the court deems fit.

(c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs.

(d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the