118 IN THE HIGH COURT OF PUNJAB AND HARYANA JAGSIR SINGH KANWALJIT SINGH CORAM: HON’BLE MR. Present: Mr. Mr. G.S. Sidhu, Advocate for the respondent. HARPREET SINGH BRAR CRM-14636-2025 This application has been filed under Section 528 BNSS, 2023 seeking pre-ponement of the main case from 23.04.2025 to an earlier date. Notice in the application. Mr. respondent/non- he has no objection in case, the main case is preponed. With the consent of both the parties, main case is preponed and is taken on board today itself. CRM-14637-2025 This is an application filed under Section 528 of BNSS, 2023 for placing on record the compromise dated 24.03.2025 as Annexure A For the reasons mentioned in the application, the same is allowed. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH JAGSIR SINGH V/S KANWALJIT SINGH HON’BLE MR. JUSTICE HARPREET SINGH BRAR Mr. S.P. Singh, Advocate for the petitioner. Mr. G.S. Sidhu, Advocate for the respondent. **** HARPREET SINGH BRAR, J. (ORAL) 2025 This application has been filed under Section 528 BNSS, 2023 ponement of the main case from 23.04.2025 to an earlier date. Notice in the application. Mr. G.S. Sidhu, Advocate has put in appearance on behalf of -applicant and filed his memo of appearance he has no objection in case, the main case is preponed. With the consent of both the parties, main case is preponed and is ard today itself. 2025 This is an application filed under Section 528 of BNSS, 2023 for placing on record the compromise dated 24.03.2025 as Annexure A For the reasons mentioned in the application, the same is allowed. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CRM-14636-2025 in/and CRR-248-2025 (O & M) Date of decision: 21.04.2025 ...PETITIONER ...RESPONDENT HARPREET SINGH BRAR Advocate for the petitioner. Mr. G.S. Sidhu, Advocate for the respondent. This application has been filed under Section 528 BNSS, 2023 ponement of the main case from 23.04.2025 to an earlier date. Advocate has put in appearance on behalf of memo of appearance. He submits that he has no objection in case, the main case is preponed. With the consent of both the parties, main case is preponed and is This is an application filed under Section 528 of BNSS, 2023 for placing on record the compromise dated 24.03.2025 as Annexure A-1. For the reasons mentioned in the application, the same is allowed. MANISHA 2025.04.22 17:39 I attest to the accuracy and authenticiy of this order/judgment CRM-14636-2025 CRR-248-2025 Compromise dated A-1. MAIN CASE 1. The present judgment and order of Judicial Magistrate 1st Class, learned Additional Sessions Judge, Moga. 2. Brief facts of the present case are that the petitioner borrowed an amount of Rs.2, he issued a cheque bearing No. Rs.2,50,000/- drawn on favour of the complainant. When the said cheque was presented for its encashment, the same was dishonoured vide return memo dated with remarks “Drawer Signature Differs a legal notice dated the amount. Hence, the complaint. 3. After appreciating the evidence trial Court convicted dated 14.12.2022 learned lower Appellate Court, but his appeal was dismissed vide judgment dated 18.10.2023 filing present petition. 4. Learned counsel for the petitioner convicted under Section 138 of NI Act and was awarded rigorous imprisonment for a period of 02 years and was 2025 in/and (O & M) Compromise dated 24.03.2025 is taken on record as Annexure The present revision petition has been judgment and order of sentence dated 14.12.2022 Judicial Magistrate 1st Class, Moga and judgment dated learned Additional Sessions Judge, Moga. Brief facts of the present case are that the petitioner borrowed an amount of Rs.2,50,000/- from the respondent. In discharge of the said liability, he issued a cheque bearing No.046662 dated drawn on Punjab National Bank, Branch Moga Mehla favour of the complainant. When the said cheque was presented for its encashment, the same was dishonoured vide return memo dated Drawer Signature Differs”. Thereafter, the complainant served a legal notice dated 20.07.2018 upon the petitioner, however, he did not pay the amount. Hence, the complaint. fter appreciating the evidence available convicted and sentenced the petitioner vide judgment and order 14.12.2022. Aggrieved by the same, the petitioner approached the learned lower Appellate Court, but his appeal was dismissed vide judgment 18.10.2023. Hence, the petitioner has approached this Court by way of filing present petition. Learned counsel for the petitioner submits convicted under Section 138 of NI Act and was awarded rigorous imprisonment for a period of 02 years and was directed to pay 2 24.03.2025 is taken on record as Annexure has been filed for setting aside 14.12.2022 passed by the learned judgment dated 18.10.2023 passed by Brief facts of the present case are that the petitioner borrowed an from the respondent. In discharge of the said liability, d 03.07.2018 for an amount of Punjab National Bank, Branch Moga Mehla Singh, in favour of the complainant. When the said cheque was presented for its encashment, the same was dishonoured vide return memo dated 05.07.2018 ”. Thereafter, the complainant served upon the petitioner, however, he did not pay available on record, the learned oner vide judgment and order . Aggrieved by the same, the petitioner approached the learned lower Appellate Court, but his appeal was dismissed vide judgment approached this Court by way of submits that the petitioner was convicted under Section 138 of NI Act and was awarded rigorous directed to pay a compensation MANISHA 2025.04.22 17:39 I attest to the accuracy and authenticiy of this order/judgment CRM-14636-2025 CRR-248-2025 of Rs.2,50,000/ directed to undergo 5. Learned counsel further submits for commission of offence under Section 138 of 1881, which is compoundable in nature. Furthermore, he refers to the compromise deed dated 24.03.2025 (Annexure A the pendency of the present revision petition, an amicable settlement has taken place. As per compromise, entire outstanding amount has been paid to the respondent. 6. Learned counsel for the respondent compromise and terms of the compromise and Section 138 of NI Act be compounded and the petitioner be acquitted of the notice of accusation 7. I have heard learned counsel for paper-book with 8. It is settled law that the proceedings initiated under Section 138 of the NI Act are quasi enactment is to provide a compensatory mechanism for expeditious recovery of money as opposed t Hon’ble Supreme Court in considered the said issue and come to the conclusion that punishing the offender is secondary concern. 9. The amendment carried out in the intended to make the nature of offence under Section 138 of the NI Act as a 2025 in/and (O & M) of Rs.2,50,000/-, in default of payment of compensation he was further directed to undergo rigorous imprisonment for 03 months. Learned counsel further submits the petitioner has been convicted for commission of offence under Section 138 of 1881, which is compoundable in nature. Furthermore, he refers to the compromise deed dated 24.03.2025 (Annexure A the pendency of the present revision petition, an amicable settlement has taken As per compromise, entire outstanding amount has been paid to the Learned counsel for the respondent compromise and submits that the respondent has received the entire amount in terms of the compromise and has no objection in case, Section 138 of NI Act be compounded and the petitioner be acquitted of the notice of accusation framed against him. I have heard learned counsel for book with their able assistance. It is settled law that the proceedings initiated under Section 138 of the NI Act are quasi-criminal in nature and the object and purpose of this enactment is to provide a compensatory mechanism for expeditious recovery of money as opposed to punishing the accused. A two Judge Bench of the Hon’ble Supreme Court in R. Vijayan Vs. Baby (2012) 1 SCC 260 considered the said issue and come to the conclusion that punishing the offender is secondary concern. The amendment carried out in the intended to make the nature of offence under Section 138 of the NI Act as a 3 , in default of payment of compensation he was further imprisonment for 03 months. the petitioner has been convicted for commission of offence under Section 138 of Negotiable Instruments Act, 1881, which is compoundable in nature. Furthermore, he refers to the compromise deed dated 24.03.2025 (Annexure A-1) and submits that during the pendency of the present revision petition, an amicable settlement has taken As per compromise, entire outstanding amount has been paid to the Learned counsel for the respondent affirms to the factum of the respondent has received the entire amount in has no objection in case, the offence under Section 138 of NI Act be compounded and the petitioner be acquitted of the I have heard learned counsel for the parties and perused the It is settled law that the proceedings initiated under Section 138 criminal in nature and the object and purpose of this enactment is to provide a compensatory mechanism for expeditious recovery o punishing the accused. A two Judge Bench of the R. Vijayan Vs. Baby (2012) 1 SCC 260 has considered the said issue and come to the conclusion that punishing the The amendment carried out in the year 2002 in the NI Act intended to make the nature of offence under Section 138 of the NI Act as a MANISHA 2025.04.22 17:39 I attest to the accuracy and authenticiy of this order/judgment CRM-14636-2025 CRR-248-2025 civil wrong while making it compoundable. A two Judge Bench of the Hon’ble Supreme Court in another Vs. Kanchan M A.K. Goel has held as under: “7. This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions’ cheques defraud the creditors. Dishonour 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 credibil 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…... xxxx xxxx xxxx 18.2. The object of 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 a be found acceptable to the parties or the court. 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, ca discretion close the proceedings and discharge the accused.” 10. A two Judge Bench of the Hon’ble Supreme Court in Industries Limited and others Vs. Amar Lal V. Jumani and another (2012) 3 SCC 255 has examined the issue whether for compoundi consent of aggrieved party is required and speaking through Justice Asok Kumar Ganguli, following was held: “82. A perusal of Section 320 makes it clear that the provisions contained in Section 320 and the various sub relating to compounding of offence. It provides for the various parameters and procedures and guidelines in the matter of compounding. If this Court upholds the contention of the appellant that 2025 in/and (O & M) civil wrong while making it compoundable. A two Judge Bench of the Hon’ble Supreme Court in Meters and Instruments Private Limited and another Vs. Kanchan Mehta (2018) 1 SCC 560 A.K. Goel has held as under:- 7. This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions’ cheques were issued merely as a device to defraud the creditors. Dishonour 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…... xxxx xxxx xxxx 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 a be found acceptable to the parties or the court. 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, ca discretion close the proceedings and discharge the accused.” A two Judge Bench of the Hon’ble Supreme Court in Industries Limited and others Vs. Amar Lal V. Jumani and another (2012) 3 has examined the issue whether for compoundi consent of aggrieved party is required and speaking through Justice Asok Kumar Ganguli, following was held:- 82. A perusal of Section 320 makes it clear that the provisions contained in Section 320 and the various sub relating to compounding of offence. It provides for the various parameters and procedures and guidelines in the matter of compounding. If this Court upholds the contention of the appellant that 4 civil wrong while making it compoundable. A two Judge Bench of the Meters and Instruments Private Limited and ehta (2018) 1 SCC 560, speaking through Justice 7. This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary were issued merely as a device to defraud the creditors. Dishonour of cheque causes incalculable loss, injury and inconvenience to the Vide the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 ity 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…... xxxx xxxx xxxx 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. 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.” A two Judge Bench of the Hon’ble Supreme Court in JIK Industries Limited and others Vs. Amar Lal V. Jumani and another (2012) 3 has examined the issue whether for compounding of an offence, consent of aggrieved party is required and speaking through Justice Asok 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 matter of compounding. If this Court upholds the contention of the appellant that MANISHA 2025.04.22 17:39 I attest to the accuracy and authenticiy of this order/judgment CRM-14636-2025 CRR-248-2025 as a result of incorporation of Section 147 in the N 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 interpretat 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 14 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 complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the NI Act.” 11. Consequently, compromise, the under Section 138 of NI Act is compounded and the and order of sentence dated learned Judicial Magistrate dated 18.10.2023 hereby set aside along with all subsequent proceedings arising therefrom. T petitioner is acquitted of the notice of accusation bail/surety bonds stand discharged. 12. The jail authorities are directed to release the petitioner immediately, if not required in any other case. April 21, 2025 manisha (i) (ii) 2025 in/and (O & M) as a result of incorporation of Section 147 in the N 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 complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of the NI Act.” Consequently, in view of the above discussion and , the present petition is allowed and consequently, the offence under Section 138 of NI Act is compounded and the and order of sentence dated 14.12.2022 passed against the petitioner by Judicial Magistrate Ist Class, Moga as well as 8.10.2023 passed by learned Additional hereby set aside along with all subsequent proceedings arising therefrom. T petitioner is acquitted of the notice of accusation surety bonds stand discharged. The jail authorities are directed to release the petitioner immediately, if not required in any other case. (HARPREET SINGH BRAR Whether speaking/reasoned Whether reportable 5 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 ion 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. 7 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 in view of the above discussion and the and consequently, the offence under Section 138 of NI Act is compounded and the judgment of conviction passed against the petitioner by as well as impugned judgment Additional Sessions Judge, Moga are hereby set aside along with all subsequent proceedings arising therefrom. The petitioner is acquitted of the notice of accusation issued against him and his The jail authorities are directed to release the petitioner HARPREET SINGH BRAR) JUDGE Yes/No Yes/No MANISHA 2025.04.22 17:39 I attest to the accuracy and authenticiy of this order/judgment