117 IN THE HIGH COURT OF PUNJAB AND HARYANA BHOLA SINGH NIRBHAI SINGH CORAM: HON’BLE MR. Present: Ms for the petitioner. HARPREET SINGH BRAR 1. The present judgment and order of Judicial Magistrate 1st Class, passed by learned Additional Sessions Judge, 2. Brief facts of the present case are that the petiti amount of Rs.4,00 he issued a cheque bearing No. Rs.4,00,000/- in favour of the complainant presented for its encashment, the same was dishonoured vide return memo dated 17.06.2015 complainant served a legal notice dated however, he did not pay the amount. Hence, the complaint 3. After appreciating the evidence trial Court convicted dated 01.02.2019 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH BHOLA SINGH V/S NIRBHAI SINGH HON’BLE MR. JUSTICE HARPREET SINGH BRAR Ms. Prabhjot Kaur Virk, Advocate for the petitioner. **** HARPREET SINGH BRAR, J. (ORAL) The present revision petition has been filed for setting aside judgment and order of sentence dated 01.02.2019 Judicial Magistrate 1st Class, Talwandi Sabo and passed by learned Additional Sessions Judge, Bathinda. Brief facts of the present case are that the petiti 4,00,000/- from the respondent. In discharge of the said liability, he issued a cheque bearing No.032873 dated in favour of the complainant bank. its encashment, the same was dishonoured vide return memo 17.06.2015 with remarks “Funds Insufficient complainant served a legal notice dated 24.06.2015 however, he did not pay the amount. Hence, the complaint fter appreciating the evidence available convicted and sentenced the petitioner vide judgment and order 01.02.2019. Aggrieved by the same, the petitioner approached the IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CRR-1034-2025 (O & M) Date of decision: 26.05.2025 ...PETITIONER ...RESPONDENT HARPREET SINGH BRAR has been filed for setting aside 01.02.2019 passed by the learned and judgment dated 01.03.2025 Bathinda. Brief facts of the present case are that the petitioner borrowed an from the respondent. In discharge of the said liability, dated 29.05.2015 for an amount of bank. When the said cheque was its encashment, the same was dishonoured vide return memo Funds Insufficient”. Thereafter, the 24.06.2015 upon the petitioner, however, he did not pay the amount. Hence, the complaint. available on record, the learned oner vide judgment and order . Aggrieved by the same, the petitioner approached the upon the petitioner, MANISHA 2025.05.26 18:25 I attest to the accuracy and authenticiy of this order/judgment CRR-1034-2025 learned lower Appellate Court, but his appeal was dismissed vide judgment dated 01.03.2025 filing present petition. 4. Learned counsel for the petitioner convicted under Section 138 of NI Act imprisonment for a period of 01 year of payment of fine, for one month. 5. Learned counsel further su for commission of offence under Section 138 of Negotiable Instruments Act, 1881, which is compoundable in nature. present revision petition, a compromise has been effected between the petitioner and the respondent. The petitioner has paid the entire amount in question to the respondent. 6. Notice of motion. 7. Mr. of the respondent is directed to tag the same at the appropriate place. compromise and The perusal thereof indicates that the respondent has rece amount. Learned counsel for the respondent further submits that he has objection in case, the petitioner be acquitted of the 8. I have heard learned counsel for paper-book with 2025 2 learned lower Appellate Court, but his appeal was dismissed vide judgment 01.03.2025. Hence, the petitioner has approached this Court by way of filing present petition. Learned counsel for the petitioner submits under Section 138 of NI Act imprisonment for a period of 01 year along with a fine of Rs.5,000/ fine, he was further directed to undergo rigorous imprisonment Learned counsel further submits the petitioner has been convicted for commission of offence under Section 138 of Negotiable Instruments Act, 1881, which is compoundable in nature. Furthermore, present revision petition, a compromise has been effected between the petitioner and the respondent. The petitioner has paid the entire amount in question to the respondent. Notice of motion. Mr. Rajeshwar Singh, Advocate has put in appearance on behalf respondent and filed his vakalatnama which is taken on record. is directed to tag the same at the appropriate place. compromise and files the affidavit of the respondent, which is taken on record. The perusal thereof indicates that the respondent has rece amount. Learned counsel for the respondent further submits that he has objection in case, the offence under Section 138 of NI Act be compounded and the petitioner be acquitted of the notice of accusation I have heard learned counsel for book with their able assistance. learned lower Appellate Court, but his appeal was dismissed vide judgment . Hence, the petitioner has approached this Court by way of submits that the petitioner was and was awarded rigorous along with a fine of Rs.5,000/-, in default he was further directed to undergo rigorous imprisonment bmits the petitioner has been convicted for commission of offence under Section 138 of Negotiable Instruments Act, Furthermore, after filing of the present revision petition, a compromise has been effected between the petitioner and the respondent. The petitioner has paid the entire amount in Advocate has put in appearance on behalf which is taken on record. Registry is directed to tag the same at the appropriate place. He affirms to the factum of files the affidavit of the respondent, which is taken on record. The perusal thereof indicates that the respondent has received the entire amount. Learned counsel for the respondent further submits that he has no Section 138 of NI Act be compounded and notice of accusation framed against him. I have heard learned counsel for the parties and perused the MANISHA 2025.05.26 18:25 I attest to the accuracy and authenticiy of this order/judgment CRR-1034-2025 9. 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 to punishing the accused. A two Judge Bench of the Hon’ble Supreme Court in considered the said issue and come to the conclusion offender is secondary concern. 10. 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 civil wrong while making it compoundable. A two Judge Bench of the Hon’ble Supreme Court in 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 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, Publi 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 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 st encouraged but is not debarred at later stage subject to 2025 3 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 nt 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 offender is secondary concern. 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 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 st encouraged but is not debarred at later stage subject to It is settled law that the proceedings initiated under Section 138 criminal in nature and the object and purpose of this nt is to provide a compensatory mechanism for expeditious recovery of money as opposed to 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 civil wrong while making it compoundable. A two Judge Bench of the Meters and Instruments Private Limited and another Vs. Kanchan Mehta (2018) 1 SCC 560, speaking through Justice 7. This Court has noted that the object of the statute was to 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 c 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 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 MANISHA 2025.05.26 18:25 I attest to the accuracy and authenticiy of this order/judgment CRR-1034-2025 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, i on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused.” 11. A two Judge Bench of the Hon’ble Supreme Court in Industries Limited and others SCC 255 has examined the issue whether for consent of aggrieved party is required and speaking through Justice Asok Kumar Ganguli, following was held: “82. A perusal of Section 320 contained in Section 320 and the various sub by itself relating to compounding of offence. It provides for the various parameters and procedures and guidelines in the matter of compounding. If this Cour 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 compoun 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 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 p 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.” 2025 4 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, i 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 Industries Limited and others Vs. Amar Lal V. Jumani and another (2012) 3 has examined the issue whether for 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 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 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.” appropriate compensation as may be found acceptable to the 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 A two Judge Bench of the Hon’ble Supreme Court in JIK 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 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 t 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 ding 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 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 rinciple 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.” MANISHA 2025.05.26 18:25 I attest to the accuracy and authenticiy of this order/judgment CRR-1034-2025 12. Consequently, compromise, the under Section 138 of NI Act is compounded and the and order of sentence dated learned Judicial judgment dated Bathinda are hereby set aside along with all subsequent proceedings arising therefrom. The petitioner is acquitted of the notice him. 12. The jail authorities are directed to release the petitioner if not required in any other case. May 26, 2025 manisha (i) (ii) 2025 5 Consequently, in view of the above disc , the present petition is allowed and consequently, the offence under Section 138 of NI Act is compounded and the and order of sentence dated 01.02.2019 passed against the petitioner by Judicial Magistrate Ist Class, Talwandi Sabo judgment dated 01.03.2025 passed by learned are hereby set aside along with all subsequent proceedings arising he petitioner is acquitted of the notice The jail authorities are directed to release the petitioner if not required in any other case. (HARPREET SINGH BRAR Whether speaking/reasoned Whether reportable 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 Talwandi Sabo as well as impugned learned Additional Sessions Judge, are hereby set aside along with all subsequent proceedings arising he petitioner is acquitted of the notice of accusation issued against The jail authorities are directed to release the petitioner forthwith, HARPREET SINGH BRAR) JUDGE Yes/No Yes/No MANISHA 2025.05.26 18:25 I attest to the accuracy and authenticiy of this order/judgment