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2026 Supreme(Online)(Raj) 3024

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
Farjand Ali, J
MODU LAL SAHU – Appellant
Versus
PRACHI AGENCIES – Respondent
S.B. Criminal Revision Petition No. 163/2026



Advocates:
For the Appellants/Petitioners: Manish Rajpurohit
For the Respondents: Sri Ram Choudhary, Anirudh Singh Rathore

Offences under Section 138 of the Negotiable Instruments Act are compoundable; since the Act's purpose is primarily compensatory, a full settlement and payment of compensation justify the quashing of conviction to prevent the abuse of legal process.

Headnote:The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881, by the trial court, a decision subsequently affirmed by the first appellate court. The petitioner sought condonation of a 981-day delay in filing the revision petition, which the court granted, finding the reasons sufficient. During the pendency of the proceedings, the parties entered into a voluntary compromise, and the entire compensation amount was paid to the complainant. The court addressed whether the conviction should be set aside given the compoundable nature of the offence. It was reasoned that the primary object of Section 138 of the Negotiable Instruments Act is compensatory and remedial rather than punitive. The court held that once the complainant is fully compensated and no grievance survives, the continuation of criminal proceedings would be counter-productive and an abuse of the process of law. The present Criminal Revision Petition is allowed and it is ordered that the judgment dated 04.01.2021 passed by the learned Special Judicial Magistrate (N.I. Act Cases) No.3, Bhilwara, in Criminal Original Case No.5399/2017, and the judgment dated 27.02.2023 passed by the learned Additional Sessions Judge (W.A.C.), Bhilwara, in Criminal Appeal No.68/2021, are hereby quashed and set aside.

Table of Content
1. procedural history of conviction and subsequent settlement between parties. (Para 1 , 2 , 3)
2. arguments regarding the compoundable nature of section 138 ni act offences. (Para 4 , 5)
3. compensatory nature of the ni act and effect of full payment. (Para 6)
4. quashing of conviction based on lawful compromise. (Para 7)

Order

1. The present Criminal Revision Petition is admittedly barred by limitation by a delay of 981 days, for condonation whereof the petitioner has preferred an application under Section 5 of the Limitation Act, 1963. For the reasons stated in the said application, which are found to be just, sufficient and satisfactorily explained, the delay in filing the revision petition deserves to be condoned. Accordingly, the application under Section 5 of the Limitation Act is allowed, and the delay of 981 days in preferring the present petition is hereby condoned.

2. The present Criminal Revision Petition has been instituted under Section 438 read with Section 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023, calling in question the legality, propriety and correctness of the judgment dated 27.02.2023 passed by the learned Additional Sessions Judge (W.A.C.), Bhilwara, in Criminal Appeal No.68/2021, whereby the learned appellate court dismissed the appeal preferred by the petitioner and affirmed the judgment dated 04.01.2021 rendered by the learned Special Judicial Magistrate (N.I. Act Cases) No.3, Bhilwara, in Criminal Original Case No.5399/2017, convicting the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and sentencing him to undergo six months’ simple imprisonment, coupled with a direction to pay Rs.1,40,000/- as compensation, with a further stipulation of fifteen days’ simple imprisonment in default thereof.

3. Briefly stated, the factual matrix of the case reveals that the respondent instituted a criminal complaint against the petitioner alleging commission of an offence under Section 138 of the Negotiable Instruments Act, 1881, on account of dishonour of a cheque issued by the petitioner for a sum of Rs.1,10,000/-.

3.1. Upon culmination of the trial, the learned Special Judicial Magistrate (N.I. Act Cases) No.3, Bhilwara, vide judgment dated 04.01.2021, was pleased to hold the petitioner guilty of the offence under Section 138 of the N.I. Act and sentenced him to undergo six months’ simple imprisonment, further directing him to pay compensation to the tune of Rs.1,40,000/- to the complainant, failing which he was to suffer additional simple imprisonment for fifteen days.

3.2. Aggrieved by the said judgment of conviction and order of sentence, the petitioner preferred a statutory appeal before the learned Additional Sessions Judge (W.A.C.), Bhilwara. During the pendency of the appeal, the learned appellate court was pleased to suspend the substantive sentence, subject to the condition that the petitioner deposits 20% of the fine amount. However, upon final adjudication, the learned appellate court, vide judgment dated 27.02.2023, dismissed the appeal and affirmed the findings of conviction and sentence recorded by the trial court.

3.3. Subsequent thereto, during the pendency of the present revision proceedings, the petitioner and the respondent amicably resolved their inter se disputes and entered into a lawful and voluntary compromise in March, 2024, pursuant to which the petitioner has already paid the entire compensation amount of Rs.1,40,000/- to the respondent, who has accepted the same in full and final satisfaction of his claim, without any demur, protest or reservation. Hence the instant revision petition.

4. Learned counsel for the petitioner vehemently contended that the impugned judgments dated 04.01.2021 and 27.02.2023, passed by the learned courts below, are illegal, erroneous, unjust and perverse, being wholly contrary to the material available on record as well as the settled principles of law governing prosecutions un

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