High Court can quash Section 138 NI Act conviction via compromise in private disputes using inherent powers.

ORDER

This Criminal Revision Petition is filed challenging the judgment made in CA No.3 of 2022 by the Principal District and Sessions Judge, Virudhunagar District at Srivilliputhur dated 23.04.2025 by confirming the judgment made in STC No.2374 of 2015 by the learned Judicial Magistrate No.I, Sivakasi dated

13.09.2021.

2. The case of the prosecution is that the accused defaulted in payment of bills amounting to Rs.3,47,725/- and Rs.3,99,269/-, and after deducting the advance amount of Rs.19,594/-, a balance sum of Rs.7,27,400/- remained payable by the petitioners, which he had undertaken to repay on or before 03.08.2015. The accused issued cheques bearing Nos. 212843 and 212845, which, upon presentation on 28.10.2015, were dishonoured due to insufficiency of funds. Thereafter, the complainant issued a statutory legal notice dated 05.11.2015, which was served on the accused on 09.11.2015. However, the accused neither replied to the notice nor repaid the amount. Hence, the complaint came to be filed.

3. The complaint was taken on file by the learned Judicial Magistrate No.I, Sivakasi, in S.T.C. No.2374 of 2015. Upon trial, the learned Judicial Magistrate No.I, Sivakasi, by judgment dated 13.09.2021, convicted the 2^nd and 3^rd petitioners for the offence under Section 138 of the Negotiable Instruments Act and sentenced them to undergo simple imprisonment for a period of one year and to pay a sum of Rs.14,54,800/- (Rupees Fourteen Lakhs Fifty-Four Thousand Eight Hundred only) as compensation within a period of two months. Aggrieved by the said conviction and sentence, the petitioners preferred an appeal in C.A. No.3 of 2022 on the file of the learned Principal District and Sessions Judge, Virudhunagar District at Srivilliputhur. The learned Principal District and Sessions Judge, by judgment dated 23.04.2025, dismissed the appeal and confirmed the conviction and sentence imposed by the trial Court. Being dissatisfied with the dismissal of the appeal, the petitioners have preferred the present Criminal Revision Case along with the accompanying miscellaneous petition seeking suspension of sentence.

4. The learned counsel appearing for the petitioners submitted that both the parties have entered into compromise and filed a joint compromise memo to compound the offence. Both the parties have appeared before this Court in person. The scanned copy of the joint compromise memo is as follows:-

5. The learned counsel appearing for the respondent also confirms the fact that the compromise have been entered into between the parties.

6. Heard both sides and carefully perused the materials available on record.

7. The Hon'ble Supreme Court in Ramgopal and another v. State of Madhya Pradesh¹, had held that this Court, in exercise of inherent powers, can accept the compromise, even in the case of non-compoundable offences, if the parties have entered into a compromise and the dispute is private in nature.

8. Though the petitioners are the accused of the offence under Section

138 of Negotiable Instruments Act, 1881, the dispute is private in nature. Hence, this Court is inclined to accept the compromise and set aside the order of conviction and sentence imposed by the Courts below.

9. Accordingly, the Joint Compromise Memo dated 27.04.2026, is taken on file. The Criminal Revision Case is allowed in terms of the Joint Compromise Memo dated 27.04.2026. The conviction and sentence imposed upon the 2^nd and 3^rd petitioners vide judgment dated 23.04.2025 in CA No.3 of

1 (2022) 14 SCC 531

2022 by the Principal District and Sessions Judge, Virudhunagar District at Srivilliputhur and the judgment dated 13.09.2021 made in STC No.2374 of 2015 by the Judicial Ma