Date Of Decision: 13.11.2025 vs Brikam Chand

. Cr.MMO No. 188 of 2025

Date of Decision: 13.11.2025 _________________________________________________ Chune Ram ....Petitioner. Versus

Brikam Chand .....Respondent. _________________________________________________ Coram

of Hon'ble Mr. Justice Vivek Singh Thakur, Judge. Hon'ble Mr. Justice Sushil Kukreja, Judge. Whether approved for reporting?1 Yes. ________________________________________________ For the petitioner: rt Mr. B.L. Soni, Mr. Sunit Dutt Gautam, & Ms. Monika Sharma, Advocates.

For respondent No. 2: Ms. Sharmila Patial, Additional Advocate General.

Mr. Ajay Kochhar, Senior Advocate

(Amicus Curiae), with Mr. Anubhav Chopra, Advocate. ________________________________________________

Sushil Kukreja, Judge

It was after noticing conflict in decisions of this

Court with respect to the power of the Court under Section

482 Cr.P.C for compounding the offence under Section 147

of the Negotiable Instruments Act and to quash the

conviction affirmed by the High Court under Section 138 of

the Negotiable Instruments Act, when no proceedings were

1 Whether reporters of Local Papers may be allowed to see the judgment?

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 2 Neutral Citation No. ( 2025:HHC:38122 )

pending before any court that the learned Single Judge

(hereinafter referred to as the referring Court) of this Court

.

has referred the following question of law to the Larger

Bench:

"Whether power under Section 482 of Cr.P.C. can be exercised to quash the conviction when no proceedings are

of pending before any Court."

2. The learned referring Court, while referring the

matter, took note of judgments of this Court rendered in rt Naresh Kumar vs. Trilok Chand 2023 (1) Shimla Law

Cases 482, Mazid Khan vs. State of H.P. and another,

Cr.MMO No. 382 of 2023, decided on 11.05.2023, Hira

Singh vs. Rajesh 2025 HHC 5524 and Satvir Singh vs.

Rajesh Pathania and another 2024 (3) DCR 580.

3. In Naresh Kumar vs. Trilok Chand as well as in

Hira Singh vs. Rajesh and Satvir Singh vs. Rajesh

Pathania & another, the accused was convicted under

Section 138 of the Negotiable Instruments Act (for short "NI

Act") by the learned Trial Court, which was affirmed in

appeal, but the same was also dismissed after which the

accused had approached this Court under Sections 397 and

401 Cr.P.C. by way of criminal revision, but the same was

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 3 Neutral Citation No. ( 2025:HHC:38122 )

also dismissed on merits. After passing of order of

conviction, the accused compromised the matter with the

.

respondent and approached this Court by way of filing

application under Section 482 Cr.P.C. praying therein for

compounding of the offence under Section 147 of the NI Act

and the learned Single Judge of this Court accepted the

of prayer made on behalf of the accused for compounding of

the offence. The application under Section 482 Cr.P.C. was rt allowed and the order of conviction passed by this Court in

criminal revision was recalled on the basis of compromise.

4. In Mazid Khan vs. State of H.P. & another

Cr.MMO No. 382 of 2023, decided on 11.05.2023, the

accused was convicted under Section 138 of the NI Act and

his appeal before the learned Additional Sessions Judge was

also dismissed. Thereafter, he had settled the matter with the

complainant and approached this Court under Section 482

Cr.P.C. for compounding the offence while exercising powers

under Section 147 of the NI Act. The petition was allowed,

as compromised, and the judgment of conviction and the

order of sentence, passed by both the Courts below were

set-aside.

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 4 Neutral Citation No. ( 2025:HHC:38122 )

5. The learned referring Court then took note of the

order rendered by it in Santosh Kumar vs. State of H.P.

.

(Cr.MMO No. 575 of 2021, decided on 14.06.2024), wherein

it was held that the power under Section 482 of Cr.P.C.

cannot be exercised when no proceedings were pending by

placing reliance upon the judgment of the Hon'ble Supreme

of court in Ramawatar vs. State of Madhya Pradesh,(2022)

13 SCC 635.

6. rt The learned referring Court also took note of the

judgment passed by another Bench of this Court in Des Raj

vs. State of H.P. (Cr.MMO No. 228 of 2024, decided on

20.06.2024), wherein, on the basis of the compromise

arrived at between the parties, a petition under Section 482

Cr.P.C. was filed for quashing of the FIR as well as judgment

of conviction passed by the learned Magistrate for the

commission of the offences under the Indian Penal Code,

which was further upheld by learned Single Judge of this

Court in criminal revision and it was held that it was not

permissible for the High Court to exercise jurisdiction under

Section 482 Cr.P.C. to quash the conviction when no

proceedings were pending before any Court.

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 5 Neutral Citation No. ( 2025:HHC:38122 )

7. In Mastan Singh vs. State of H.P. (Cr. Revision

No. 425 of 2019, decided on 06.09.2023), an application

.

was moved under Section 482 Cr.P.C. to set-aside the

judgment of conviction and order of sentence passed by the

learned Trial Court and affirmed by the learned First

Appellate Court for the commission of the offences under

of Sections 143, 147, 451, 506, 353, 332 and 149 of IPC.

During the pendency of the revision petition, an application rt was moved under Section 482 Cr.P.C. for setting-aside the

judgment of conviction on the ground that the compromise

has been effected between the parties and the learned

Single Judge of this Court had allowed the revision petition

on the basis of the compromise by setting-aside the

judgment of conviction and order of sentence passed by both

the Courts below.

8. In Sai Infotech vs. Idyll Institute of Computer

Education (Cr.MMo No. 1237 of 2024, decided on

02.01.2025), the learned Trial Court had convicted the

accused under Section 138 of the NI Act, which was affirmed

in appeal, but the same was also dismissed after which the

accused had approached this Court under Sections 397 and

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 6 Neutral Citation No. ( 2025:HHC:38122 )

401 Cr.P.C. by way of criminal revision, but the same was

also dismissed by this court on merits. Thereafter, the

.

accused compromised the matter with the respondent and

approached this Court under Section 482 Cr.P.C. for

compounding the offence, but the learned Single Judge of

this Court dismissed the same after holding that pendency of

of the proceedings before any Court, is sine qua non, for

exercising the powers under Section 482 Cr.P.C., as held by rt a three Judge Bench of the Hon'ble Apex Court in

Ramawatar vs. State of Madhya Pradesh, (2022) 13 SCC 635

9. At the very outset, it may be pertinent to mention

here that the question of law as formulated by the ld.

Referring court that "Whether power under Section 482 of

Cr.P.C. can be exercised to quash the conviction when no

proceedings are pending before any Court." needs to be re-

formulated as on this question of law, there is already an

authoritative pronouncement by the Hon'ble Supreme Court

in Ramawatar's case (supra) wherein it has been clearly

held that the pendency of the legal proceedings before the

final Court, is sine-quo-non and the powers under Section

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 7 Neutral Citation No. ( 2025:HHC:38122 )

482 Cr.P.C. are exercisable in post-conviction matters only

where an appeal is pending before one or other Judicial

.

forum .The relevant portion of the judgment (supra) is

reproduced as under:

"13. We, however, put a further caveat that the powers under Article 142 or under Section 482 Cr.P.C., are exercisable in post-conviction matters only where an appeal is pending before one or the other Judicial

of forum. This is on the premise that an order of conviction does not attain finality till the accused has exhausted his/her legal remedies and the finality is sub- judice before an appellate court. The pendency of legal proceedings, be that may before the final Court, is sine- quo0-non to involve the superior court's plenary rt powers to do complete justice. Coversely, where a settlement has ensued post the attainment of all legal remedies, the annulment of proceedings on the basis of a compromise would be impermissible. Such an

embargo is necessitated to prevent the accused from gaining an indefinite leverage, for such a settlement/compromise will always be loaded with lurking suspicion about its bona fide. We have already clarified that the purpose of these extraordinary powers is not to incentivize any hollow-hearted agreements

between the accused and the victim but to do complete justice by effecting genuine settlement(s)."

10. Hence, in our opinion, in the context of the

reference sent by the ld. Referring court, the question of law,

needs to be re-formulated as under:

"Whether the power under Section 528 BNSS can be exercised by the High Court for compounding the offence under Section 147 of the Negotiable Instruments Act and to quash the conviction finally affirmed by the High Court under Section 138 of the Negotiable Instruments Act, when no proceedings are pending before any Court."

11. We have heard Shri Ajay Kochhar, learned

Senior Advocate, Amicus Curiae, Shri B.L. Soni, Advocate,

for the petitioner, Mr. I.N. Mehta, learned Senior Additional

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 8 Neutral Citation No. ( 2025:HHC:38122 )

Advocate General, for respondent No. 2/State and carefully

examined the entire records.

.

12. The learned Amicus Curiae submitted that the

offence under Section 138 of The Negotiable Instrument Act

is only a civil wrong and it is capable of being compounded at

any stage by invoking Section 147 of the N.I. Act, even after

of conviction of the accused or confirmation of conviction by the

High Court. He further submitted that this Court has rt jurisdiction to give effect to such compromise, in order to

secure the ends of justice under Section 482 Cr.P.C./528 of

the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter

referred to as "BNSS"). He also submitted that the Legislative

intent behind the insertion of Section 147 of the N.I. Act is to

expedite the process under Section 138 of the Act and

consequently reduce the burden of the Courts.

13. Now, the question that has to be examined by

this court is as to whether power under Section 528 BNSS

can be exercised by the High Court by entertaining the

petition for compounding of the offence under Section 147 of

the Negotiable Instruments Act after the conviction under

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 9 Neutral Citation No. ( 2025:HHC:38122 )

Section 138 of the Negotiable Instruments Act is finally

affirmed by the High Court.

.

14. Chapter XVII of the Negotiable Instruments Act

was inserted by the Banking Public Financial Institutions and

Negotiable Instruments Laws (Amendment) Act, 1988 (66 of

1988) with effect from 01.04.1989 dealing with "of penalties

of in case of dishonor of certain cheques for insufficiency of

funds in the accounts", by which Sections 138 to 142 of the rt N.I. Act, were inserted for providing punishment for "dishonor

of cheque". Again, the N.I. Act was further amended by the

Negotiable Instruments (Amendment and Miscellaneous

Provisions) Act, 2002 (55 of 2002) with effect from

06.02.2003, which introduced Section 147 of the NI Act to

make the offences under the Negotiable Instruments Act,

compoundable. In this regard, the learned Amicus Curie

invited the attention of this Court to the "Statement of Objects

and Reasons of the Amendment Act, 2002 of the Negotiable

Instruments Act, which reads as follows:

"The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 10 Neutral Citation No. ( 2025:HHC:38122 ) credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely Sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques. Not only the

.

punishment provided in the Act has proved to be

inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act."

15. Hence, while determining the scope of compounding

the offence under Section 147 of the N.I. Act and the powers

of of the High Court under Section 482 Cr.P.C./528 BNSS, with

reference to Section 138 of the N.I. Act, it is fundamental to rt take into consideration the Statement of Objects and

Reasons of the Amendment Act, 2002 and the intention of

the legislature with which it was enacted.

16. In the case of Vinayak Devanna Nayak vs. Ryot

Seva Sahakari Bank Limited, reported in 2008 (2) SCC

305, it was held that taking into consideration the provision

under Section 147 and the primary object underlying Section

138, there is no reason to refuse compromise between the

parties. The relevant portion of the judgment (supra) is as

under:

"16. Section 138 of the Act was inserted by the Banking, Public Financial Institutions and Negotiable Instrument Law (Amendment) Act, 1988 (ACT 66 of 1988) to regulate financial promises in growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters. The incorporation of the provision is

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 11 Neutral Citation No. ( 2025:HHC:38122 ) designed to safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developing country like India. The provision has been introduced with a view to curb

.

cases of issuing cheques indiscriminately by making

stringent provisions and safeguarding interest of creditors.

17. As observed by this Court in Electronic Trade & Technology Development Corporation Ltd. V. Indian

Technologists & Engineers, (1996) 2 SCC 739, the object of bringing Section 138 in the statute book is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. The provision is intended to prevent

of dishonesty on the part of the drawer of negotiable instruments in issuing cheques without sufficient funds or with a view to inducing the payee or holder in due course to act upon it. It thus seeks to promote the efficacy of bank operations and ensures credibility in transacting business through cheques. In such matters, rt therefore, normally compounding of offences should not be denied. Presumably, Parliament also realized this aspect and inserted Section 147 by the Negotiable

Instruments (Amendment and Miscellaneous Provisions) Act, 2002. (ACT 55 of 2002). The said section reads thus:

"Section 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."

18. Taking into consideration even the said provision

(Section 147) and the primary object underlying Section 138, in our judgment, there is no reason to refuse compromise between the parties. We, therefore,

dispose of the appeal on the basis of the settlement arrived at between the appellant and the respondent."

17. In the case of Mandvi Co-operative Bank Limited

vs. Nimesh B.Thakore, reported in 2010 (3) SCC 83, the

Apex Court held as under:-

"25. It is not difficult to see that Sections 142 to 147 lay down a kind of a special code for the trial of offences under Chapter XVII of the Negotiable Instruments Act and Section 143 to 147 were inserted by the Act by the Negotiable Instruments (Amendment and Miscellaneous Provisions) 2002 to do away with all the stages and processes in a regular criminal trial that normally cause inordinate delay in its conclusion and to make the trial

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 12 Neutral Citation No. ( 2025:HHC:38122 ) procedure as expeditious as possible without in any way compromising on the right of the accused for a fair trial. .. . .."

.

18. In the case of Damodar S. Prabhu vs. Sayed

Babalal. H, reported in 2010 (5) SCC 663 the Hon'ble

Supreme Court framed guidelines with respect to grant of

permission for compounding of the offence(s) at various

of stages. The relevant portion of the said judgment reads as

under:

rt "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:

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

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 13 Neutral Citation No. ( 2025:HHC:38122 ) 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 cheque amount."

19. In the case of Meter and Instruments Private

of Limited & others vs. Kanchan Mehta, reported in 2018 (1)

SCC 560, it has been held that compounding at the initial rt stage has to be encouraged but is not debarred at later

stage. The relevant portion of the said judgment reads as

follows:-

"18.2. The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate

compensation as may be found acceptable to the parties or the Court."

20. In the case of K. Subramanian vs. R. Rajathi,

represented by P.O.A. P. Kaliappan, reported in 2010 (15)

SCC 352, the Hon'ble Supreme Court, while giving effect to

the compromise entered into under Section 147 of the Act,

recalled and restored the Special Leave Petition which had

earlier been dismissed . The relevant portion of the said

Judgment reads as follows:-

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 14 Neutral Citation No. ( 2025:HHC:38122 ) "9. For the foregoing reasons, Crl.M.P. No. 12801 of 2019 in which prayer to condone the delay fo 39 days caused in filing review application is allowed and delay is condoned. The Review Petition succeeds. The Order

.

dated September 11, 2008 dismissing SLP (Crl) No.

6974 of 2008 @ Crl.M.P. No. 14586 of 2008 is recalled. The said SLP is restored on file with its original number. The Crl.M.P. No. 12804 of 2009 in which the prayer is made by petitioner to permit him to produce affidavits sworn by him on December 1, 2008 as well as

affidavit sworn by P. Kaliappan, Power of attorney holder of R.Rajathi on December 1, 2008 as additional documents is allowed. Crl.M.P. No. 12803 of 2009 in which the petitioner has prayed to permit him to compound the offence and acquit him by setting aside

of the conviction recorded in Criminal Case No. 726 of 2003 under Section 138 of The Negotiable Instruments Act, by learned Judicial Magistrate, Karur is allowed. The petitioner is permitted to compound the offence."

21. rt Thus, the Hon'ble Supreme Court has time and again

reiterated that the compounding of offence under Section

138 of the N.I. Act, through Section 147 of the N.I. Act, can

be given effect to, even at a later stage of the proceedings,

subject to the parties agreeing to an appropriate

compensation. Further, taking into consideration the object of

Sections 138 and 147 of the N.I. Act, there cannot be any

reason to refuse to record a compromise entered into

between the parties to compound the offence under Section

138 of the N.I. Act. The offence under Section 138 of the N.I.

Act, is only a civil wrong. The said offence is primarily

concerned with private parties and therefore, such an offence

cannot be treated at par with the other criminal offence(s). In

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 15 Neutral Citation No. ( 2025:HHC:38122 ) such offences, the parties are always permitted to enter into

a compromise so as to bring an end to the long dispute.

.

22. In a recent decision rendered by Hon'ble

Supreme Court in Gian Chand Garg vs. Harpal Singh &

Anr., Special leave to Appeal (Crl.) No. 8050 of 2025,

decided on 11.08.2025, after taking note of its previous

of decisions, the Hon'ble Supreme Court has held as under:

"6.

rt This Court in M/s. Meters and Instruments Private Limited & Anr. Vs. Kanchan Mehta 2018 (1) SCC 560 held that the nature of offence under Section 138 of the NI Act is a mainly a civil wrong and has been made specifically compoundable by section 147 of the NI Act

which was inserted by the 2002 amendment to the said Act. The relevant portion of the aforesaid judgment reads as under:

"This Court has noted that the object of the statute was to facilitate smooth functioning of

business transactions. The provision is necessary as a many transactions' cheques were issued merely as a devise to defraud the creditors. Dishonor of cheque causes incalculable loss, injury and inconvenience to

the Vide the Banking, Public financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 payee and credibility of

business transactions suffers a setback. At the same time, it was also noted that nature of offence under Section 138 primarily related to a civil wrong and the 2002 amendment specifically

made it compoundable."

7. It is also apposite to reiterate the observations in P. Mohanraj & Ors. Vs. M/s. Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258, the Hon'ble Supreme Court observed that the offence under section 138 NI Act as a "Civil Sheep" in "Criminal Wolf's Clothing" which meant issues agitated by the parties under the said provision are of private nature which are brought within the sweep of criminality jurisdiction in order to strengthen the credibility of the negotiable instruments.

8. Further in M/s. Gimpex Private Limited vs. Manoj Goel (2021) SCC OnLine SC 925, this court took into

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 16 Neutral Citation No. ( 2025:HHC:38122 ) consideration the effect of settlement arrived between the parties and observed that:

"38. When a complainant party enters into a

.

compromise agreement with the accused, it may

be for a multitude of reasons- Higher Compensation, faster recovery of money, uncertainty of trial and strength of complaint, among others. A complainant enters into a settlement with open eyes and undertakes the

risk of the accused failing to honour the cheques issued pursuant to the settlement, based on certain benefits that the settlement agreement postulates. Once parties voluntarily entered into such an agreement and agree to

of abide by the consequence of non-compliance of the settlement agreement, they cannot be allowed to reverse the effects of the agreement by pursuing both the original complaint and the subsequent complaint arising from such non- rtcompliance. The settlement agreement subsumes the original complaint........"

9. In B.V. Seshaiah vs. State of Telangana & Anr.

(2023) SCC OnLine SC 96 this court was of the view that when parties enter into an agreement and compound the offence, they do so to save themselves from the process of litigation and when such a step is taken by the parties, the law very well allows them to do so. Hence, the courts cannot override such compounding

and impose its will.

10. Therefore, it is very clear that although dishonor of cheque entails criminal consequence, the legislature by virtue of section 147 of the NI Act has made it

compoundable notwithstanding the provisions of the Code of Criminal Procedure, 1973 and the same can be compounded at any stage of the proceedings especially

when the parties have themselves arrived at a voluntary compromise."

23. The learned Amicus Curiae next submitted that

the "Negotiable Instruments Act" is a special enactment and

it will over-ride the provisions conferred under the

Cr.P.C./BNSS. To buttress this submission, the learned

Amicus Curiae placed reliance on the decisions of the

Hon'ble Supreme Court in the cases of K.M. Ibrahim vs.

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 17 Neutral Citation No. ( 2025:HHC:38122 ) K.P. Mohammed, reported in 2010 (1) SCC 798, Jik

Industries Ltd. & Ors vs Amarlal V.Jumani & Anr. 2012

.

(3) SCC 255,

24. On the other hand, the learned Senior Additional

Advocate General, submitted that though this Court enjoys

extraordinary jurisdiction under Section 482 of the Cr.P.C. to

of compound the offence, however, such exercise of power

under Section 482 Cr.P.C. is always subject to the rt limitations. He further submitted that it is not permissible to

entertain a petition for compounding the offence in exercise

of the powers conferred under Section 482 Cr.P.C./528 of

The Bharatiya Nagarik Suraksha Sanhita, 2023 (for short

"BNSS") after pronouncement of the judgment "on merits", as

no court has the power to alter the judgment, after it was

pronounced and the application for compounding an offence

would amount to setting aside the judgment passed "on

merits". The learned Senior Additional Advocate General

also invited the attention of this Court to the decision of the

Hon'ble Supreme Court in Ramawatar's case (supra)

wherein it has been held that the powers under Section 482

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 18 Neutral Citation No. ( 2025:HHC:38122 ) Cr.P.C. are exercisable in post-conviction matters only where

an appeal is pending before one or other Judicial forum.

.

25. We have minutely gone through the judgement

passed by the Hon'ble Supreme Court in Ramawatar's case

(supra), wherein the accused was convicted by the Trial

Court under Section 3(1)(x) of the unamended SC/ST Act

of read with Section 34 of IPC and the High Court maintained

the order of conviction and sentence passed by the Trial rt Court against the appellant. Thereafter, the accused

approached the Hon'ble Supreme court and during the

pendency of the appeal, the complainant had filed an

application for compromise and the Hon'ble Supreme Court

in exercise of its power under Article 142 of the Constitution

quashed the criminal proceedings to do complete justice

between the parties. The relevant portion of the aforesaid

judgment reads as under:

"9. Having heard the learned counsel for the parties at some length, we are of the opinion that two questions fall for our consideration in the present appeal. First, whether the jurisdiction of this Court under Article 142 of the Constitution can be involved for quashing of criminal proceedings arising out of a "non-compoundable" offence? If yes, then whether the power to quash proceedings can be extended to offences arising out of special statutes such as the SC/ST Act?

10. So far as the first question is concerned, it would be ad rem to outrightly refer to the recent decision of

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 19 Neutral Citation No. ( 2025:HHC:38122 ) this Court in Ramgopal v. State of M.P [(2022) 14 SCC 531], wherein, a two-Judge Bench of this Court consisting of two of us (N.V. Ramana, CJI & Surya Kant, J.) was confronted with an identical question.

.

Answering in the affirmative, it has been clarified

that the jurisdiction of a court under Section 320 CrPC cannot be construed as a proscription against the invocation of inherent powers vested in this Court under Article 142 of the Constitution nor on the powers of the High Courts under Section 482

CrPC. It was further held that the touchstone for exercising the extraordinary powers under Article 142 or Section 482 CrPC, would be to do complete justice. Therefore, this Court or the High Court, as the case may be, after having given due regard to

of the nature of the offence and the fact that the victim/complainant has willingly entered into a settlement/compromise, can quash proceedings in exercise of their respective constitutional/inherent powers.

rt ... ... ... ... ... ... ... ...

14. With respect to the second question before us, it must be noted that even though the powers of this Court under Article 142 are vide and far-reaching, the same cannot be exercised in a vacuum. True it is that ordinary statutes or any restrictions contained therein, cannot be constructed as a

limitation on the Court's power to do "complete justice". However, this is not to say that this Court can altogether ignore the statutory provisions or other express prohibitions in law. In fact, the Court is obligated to take note of the relevant laws and will

have to regulate the use of its power and discretion accordingly.

... ... ... ... ... ... ... ...

16. Ordinarily, when dealing with offences arising out of special statutes such as the SC/ST Act, the Court will be extremely circumspect in its approach. The

SC/ST Act has been specifically enacted to deter acts of indignity, humiliation and harassment against members of Scheduled Castes and Scheduled Tribes. ... ... ...

17. On the other hand, where it appears to the Court that the offence in question, although covered under the SC/ST Act, is primarily private or civil in nature, or where the alleged offence has not been committed on account of the caste of the victim, or where the continuation of the legal proceedings would be an abuse of the process of law, the Court can exercise its powers to quash the proceedings. On similar lines, when considering a prayer for quashing on the basis of a compromise/settlement, if the Court is

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 20 Neutral Citation No. ( 2025:HHC:38122 ) satisfied that the underlying objective of the Act would not be contravened or diminished even if the felony in question goes unpunished, the mere fact that the offence is covered under a "special statute"

.

would not refrain this Court or the High Court, from

exercising their respective powers under Article 142 of the Constitution or Section 482 CrPC."

26. Thus, the aforesaid judgment has been rendered by

the Hon'ble Supreme Court in the case involving the SC/ST

Act coupled with the offence under the Indian Penal Code,

of and in our humble opinion, the aforesaid judgment is not

applicable in the present case, as the offence under the rt Negotiable Instruments Act is essentially of a private nature

and a civil wrong and the compounding of the offence under

the N.I. Act is not governed by Section 320(9) of Cr.P.C., in

view of non obstante clause in Section 147 of the N.I. Act,

which will have overriding effect.

27. In this context, it will be relevant to discuss the

provision of law under Section 147 of the N.I. Act which is

reproduced below for ready reference:

"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."

28. The above provision indicates that it begins with a

non-obstante clause and the offence under Section 138 of

the N.I. Act is compoundable under Section 147 of the said

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 21 Neutral Citation No. ( 2025:HHC:38122 ) Act notwithstanding anything contained in the Code of

Criminal Procedure, 1973.

.

29. In this context, we may also deal with Section 5 of the

CrPC/BNSS, which has a bearing on the issue before this

Court which provides that nothing contained in the Code of

Criminal Procedure shall, in the absence of a specific

of provision to the contrary, affect any special or local law for

the time being in force, or any special jurisdiction or power rt conferred, or any special form of procedure prescribed, by

any other law for the time being in force.

30. Thus, the reading of Section 5 of the CrPC/BNSS

reveals that Section 147 of the N.I. Act will have an

overriding effect over the provisions of Section 320(9) of

Cr.P.C.

31. For better appreciation of the matter, we may

profitably reproduce the observation of the Hon'ble Apex

Court in the case of K.M. Ibrahim vs. K.P. Mohammed,

reported in 2010 (1) SCC 798, wherein it has been held

that, as far as non-obstante clause included in Section 147 of

the N.I. Act is concerned, it being a special Statute, the

provisions of Section 147 of the N.I. Act will have an over-

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 22 Neutral Citation No. ( 2025:HHC:38122 ) riding effect over the provisions of the Cr.P.C. relating to the

compounding of offences. The relevant portion of the

.

aforesaid judgment reads as under:

"13. As far as the non obstante clause included in

Section 147 of the 1881 Act is concerned, the 1881 Act being a special statute, the provisions of Section 147 will have an overriding effect over the provisions of the Code relating to compounding of offences. The various decisions cited by Mr. Rohatgi on this

of issue do not add to the above position.

14. It is true that the application under Section 147 of the Negotiable Instruments Act was made by the parties after the proceedings had been concluded before the appellate forum.

rt However, Section 147 of the aforesaid Act does not bar the parties from compounding an offence under Section 138 even at the appellate stage of the proceedings. Accordingly, we find no reason to reject the application under

Section 147 of the aforesaid Act even in a proceeding under Article 136 of the Constitution.

15. Since the parties have settled their disputes, in keeping with the spirit of Section 147 of the Act, we allow the parties to compound the offence, set aside

the judgment of the Courts below and acquit the appellant for the charges against him."

32. In Jik Industries Ltd. & Ors vs. Amarlal V.

Jumani & Anr. 2012 (3) SCC 255, the Hon"ble Supreme

Court harmonized the provision of Section 320 of the Code

along with Section 147 of N.I. Act by saying that an offence

which is not otherwise compoundable in view of the

provisions of Section 320 sub-section 9 of the Code has

become compoundable in view of Section 147 of N.I. Act and

to that extent Section 147 of N.I. Act will override Section 320

sub-section 9 of the Code since Section 147 of N.I. Act

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 23 Neutral Citation No. ( 2025:HHC:38122 ) carries a non-obstante clause. It further held that the

consent of the person aggrieved or the person injured or the

.

complainant cannot be wished away nor can the same be

substituted by virtue of Section 147 of the N.I. Act. The

relevant portion of the aforesaid judgment reads as under:

"37. On the nature of the offence under N.I. Act learned

of counsel for the appellant(s) also placed reliance on a decision of this Court in the case of Damodar S. Prabhu vs. Sayed Babalal H. reported in (2010) 5 SCC 663. In paragraph 4, this Court held that the dishonour of a cheque can be best described as a regulatory offence which has been created to serve the public interest in rt ensuring the reliability of these instruments and the Court has further held that the impact of the offence is confined to private parties involvement in commercial

transactions. The Court also noted the situation that large number of cases involving dishonour of cheques are choking the criminal justice system and putting an unprecedented strain on the judicial functioning. In paragraph 7 of the judgment this Court noted the submissions of the learned Attorney General to the

extent that the Court should frame certain guidelines so as to motivate the litigants from seeking compounding of the offence at an early stage of litigation and not at an unduly late stage. It was argued that if compounding is early the pendency of arrears can be tackled.

... ... ... ... ... ... ... ...

39. In paragraph 12 of Damodar (supra) this Court dealt with the provision of Section 147 of the N.I. Act and held that the same is an enabling provision for compounding of the offence and is an exception to the general rule incorporated in sub-section 9 of Section

320 of the Code. This Court harmonized the provision of Section 320 of the Code along with Section 147 of N.I. Act by saying that an offence which is not otherwise compoundable in view of the provisions of Section 320 sub-section 9 of the Code has become compoundable in view of Section 147 of N.I. Act and to that extent Section 147 of N.I. Act will override Section 320 sub- section 9 of the Code since Section 147 of N.I. Act carries a non-obstante clause. This Court on the basis of the submissions of the learned Attorney General framed certain guidelines for compounding of offence under Section 138 of the N.I. Act.

... ... ... ... ... ... ... ...

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 24 Neutral Citation No. ( 2025:HHC:38122 )

41. The Court held in paragraph 26 of Damodar (supra) that those guidelines have been issued by this Court under

.

Article 142 of the Constitution in order to fill-up

legislative vacuum which exists in Section 147 of the N.I. Act. The Court held that Section 147 of the N.I. Act does not carry any guidance on how to proceed with the compounding of the offence under the N.I. Act and the Court felt that Section 320 of the Code cannot be

strictly followed in the compounding of offence under Section 147 of the N.I. Act. Those guidelines were given to fill up a legislative vacuum.

... ... ... ... ... ... ... ...

of

82. A perusal of Section 320 makes it clear that the provisions contained in Section 320 and the various sub-sections is a code by itself relating to compounding of offence. It provides for the various parameters and procedures and guidelines in the rt matter of compounding. If this Court upholds the contention of the appellant that as a result of incorporation of Section 147 in the NI Act, the entire

gamut of procedure of Section 320 of the Code are made inapplicable to compounding of an offence under the NI Act, in that case the compounding of offence under the NI Act will be left totally unguided or uncontrolled. Such an interpretation apart from being an absurd or unreasonable one will also be contrary to

the provisions of Section 4(2) of the Code, which has been discussed above. There is no other statutory procedure for compounding of offence under the NI Act. Therefore, Section 147 of the NI Act must be reasonably construed to mean that as a result of the

said section the offences under the NI Act are made compoundable, but the main principle of such compounding, namely, the consent of the person

aggrieved or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the NI Act."

33. Though, certain other decisions are also there on

the proposition that the special legislation will have overriding

effect upon the provisions of general law, however this Court

does not deem it necessary to burden the judgment by

multiplying the authorities. Thus, in view of the judgements

cited supra, Section 147 of the N.I. Act, beginning with a non-

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 25 Neutral Citation No. ( 2025:HHC:38122 ) obstante clause, will only over-ride Section 320(9) of the

Code of Criminal Procedure. The Hon'ble Supreme Court

.

has categorically observed that the compounding of offences

under the Negotiable Instruments Act, 1981 is covered under

Section 147 of the N.I. Act. The provisions under Section 147

of the N.I. Act is in the nature of enabling provision which

of provides for compounding of offences prescribed under the

very same Act, therefore, the same is an exception to the rt general rule incorporated in Section 320, Cr.P.C. Further, the

provision under Section 147 of the N.I. Act having been

enacted under a special Statute will have an overriding effect

over Section 320(9), Cr.P.C. in view of the non- obstante

clause provided in Section 147 of the N.I. Act.

34. In Raj Reddy Kallem vs. State of Haryana &

another, (2024) 8 Supreme Court Cases 588, the Hon'ble

Supreme Court, after placing reliance upon its earlier

decision in JIK Industries Ltd. & ors. Vs. Amarlal V.

Jumani & Anr., 2012 (3) SCC 255, held that the consent of

the person aggrieved or the person injured or the

complainant cannot be wished away nor can the same be

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 26 Neutral Citation No. ( 2025:HHC:38122 ) substituted by virtue of Section 147 of the NI Act. The

relevant portion of the aforesaid judgment reads as under:

.

"19. Further this Court observed in para 82 of the said judgment that: (JIK Industries case [(2012) 3 SCC 255]

"82. ... Section 147 of the NI Act must be

reasonably construed to mean that as a result of the said section the offences under the NI Act are made compoundable, but the main principle of such compounding, namely, the consent of the person aggrieved

of or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the NI Act."

35. In a recent judgment in A S Pharma Pvt. Ltd.

rt vs. Nayati Medical Pvt. Ltd. & ors., 2024 LawSuit(SC) 719,

the Hon'ble Supreme Court, after placing reliance upon its

earlier decision in JIK Industries Ltd. & ors. Vs. Amarlal V.

Jumani & Anr., held that an offence under Section 138 of

the N.I. Act could be compounded under Section 147 thereof,

only with the consent of the complainant concerned. The

relevant paras of the aforesaid judgment are reproduced as

under:

"9. Thus, a bare perusal of Section 482, Cr.P.C., and Section 147, N.I. Act would reveal they are different and distinct. The former being the inherent power of High Court exercisable even suo motu to give effect to any order under Cr.P.C., or to prevent abuse of the process of any court or otherwise to secure the ends of justice. However, the provision for compounding every offence punishable under the N.I. Act, under Section 147, N.I. Act, is not a power available to a Court to exercise without the consent of the complainant. We will dilate on this aspect a little later.

... ... ... ... ... ... ... ...

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 27 Neutral Citation No. ( 2025:HHC:38122 )

11. It is thus well-neigh settled position that the inherent powers under Section 482, Cr.P.C, are invocable when no other efficacious remedy is available to the party

.

concerned and not where a specific remedy is provided

by the statute concerned. We may further add here that certainly the power under Section 482, Cr.P.C., is not invocable, ignoring the factor which is sine qua non for the exercise of power to compound the offence(s) under N.I. Act viz., the consent of the complainant.

... ... ... ... ... ... ... ...

14. As relates the requirement of 'consent' for compounding offence under Section 138, N.I. Act, by

of invoking the power under Section 147, N.I. Act, it is to be noted that the question is no longer res integra. This Court in the decision in JIK Industries Ltd. & Ors vs. Amarlal V. Jumani & Anr., 2012 3 SCC 255 declined to accept the contention that in view of the non- obstante clause in Section 147, NI Act, which is a rt special statute, the requirement of consent of the person compounding the offence under Section 138, N.I. Act, is not required. After extracting provision

under Section 147, N.I. Act, this Court in JIK Industries Ltd. case (supra) observed and held in paragraph 58 and 59 thereof thus:

"58. Relying on the aforesaid non obstante clause in Section 147 of the NI Act,

the learned counsel for the appellant argued that a three-Judge Bench decision of this Court in Damodar, 2010 5 SCC 663, held that in view of non obstante clause in Section 147 of the NI Act, which is a special statute, the

requirement of consent of the person compounding in Section 320 of the Code is not required in the case of compounding of

an offence under the NI Act.

59. This Court is unable to accept the aforesaid contention for various reasons which are discussed below."

15. In the contextual situation it is relevant to refer to a recent decision of this Court in Raj Reddy Kallem v. The State of Haryana & Anr. 2024 INSC 347. The said decision would reveal that this Court took note of earlier decisions of this Court in JIK Industries Ltd. case (supra) as also in the decision in Meters and Instruments Private Ltd. & Anr. V. Kanchan Mehta, 2018 1 SCC 560 and in un-ambiguous terms held that for compounding the offence under Section 138, N.I. Act, 'consent' of the complainant is required. In Kanchan Mehta's case (supra) even after referring to the decision in JIK Industries Ltd. case (supra) this Court held that even in the absence of 'consent' Court could close criminal proceedings against an accused in a case

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 28 Neutral Citation No. ( 2025:HHC:38122 ) under Section 138, N.I. Act, if the accused had compensated the complainant. It was held therein thus:

18.3 Though compounding requires

.

consent of both parties, even in absence of

such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused.

... ... ... ... ... ... ... ...

17. It is in the aforesaid circumstances that we held that the question whether the offence under Section 138, N.I.

of Act could be compounded invoking the power under Section 147, N.I. Act, without consent of the complainant concerned, is no longer res integra. In short, the position is 'that an offence under Section 138, N.I. Act could be compounded under Section 147 thereof, only with the consent of the complainant rt concerned'. In that view of the matter, the impugned judgment of the High Court wherein despite the absence of the consent of the appellant-complainant

compounded the offence under Section 138, N.I. Act, on the ground that the appellant was equitably compensated, could not be sustained."

36. Hence, in view of our aforesaid discussion, we

are of the firm opinion that the inherent power under Section

482 of Cr.P.C./528 of BNSS is available to be exercised by

the High Court for compounding the offence under section

138 of the N.I. Act only with the explicit consent of the

complainant or the person aggrieved. In our considered

opinion, when parties to the offence under Section 138 of the

Act enter into compromise, it should be given effect to under

Section 147 of the Act at any stage of the proceedings, even

after conviction being finalized by the High Court. The failure

to give effect to such compromise would render the import of

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 29 Neutral Citation No. ( 2025:HHC:38122 ) Section 147 of the Act meaningless. If this Court does not

permit compounding of the offence under Section 138 of the

.

Act through Section 147 of the Act on the ground that the

conviction has reached its end, it would result in grave

injustice being committed against the parties, who would be

persuaded to continue a proceeding, which neither party

of intends or would benefit from. Moreover it would discourage

the parties from entering into compromise and would operate rt against the intention of the Legislature to promote mutual

settlement of the offence under Section 138 of the N.I. Act.

The Hon'ble Supreme Court in a catena of decisions held

that the compensatory aspect of remedy shall have priority

over the punitive aspect and the courts should encourage

compounding of offences under the NI Act if parties are

willing to do so. The Hon'ble Supreme Court also noted the

situation that large number of cases involving dishonour of

cheques are choking the criminal justice system and putting

an unprecedented strain on the judicial functioning.

Therefore, in our opinion, if the parties are required to

approach the Hon'ble Supreme Court to compound the

offence, it will merely have the effect of delaying justice and

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 30 Neutral Citation No. ( 2025:HHC:38122 ) incurring unwarranted expenses upon the parties besides

increasing burden on the Supreme Court.

.

37. Therefore, we answer the question of law that the

power conferred under Section 528 BNSS can always be

exercised by the High Court in exercise of its inherent

jurisdiction for compounding the offence under Section 147

of of the Negotiable Instruments Act and to quash the

conviction finally affirmed by the High Court under Section rt 138 of the Negotiable Instruments Act, when no proceedings

are pending before any Court. The reference case is

accordingly directed to be placed before the appropriate

Bench after obtaining necessary orders from Hon'ble the

Chief Justice.

38. Before parting with the case, we wish to place

our appreciation on record for the valuable assistance given

by Shri Ajay Kochhar, learned Senior Advocate (Amicus

Curiae).

( Vivek Singh Thakur ) Judge

( Sushil Kukreja )

::: Downloaded on - 05/12/2025 21:44:07 :::CIS 31 Neutral Citation No. ( 2025:HHC:38122 ) Judge

___November, 2025

.

(virender)

of rt

::: Downloaded on - 05/12/2025 21:44:07 :::CIS