APHC010476012009 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI MONDAY, THE 28th DAY OF SEPTEMBER 2026 PRESENT THE HONOURABLE SRI JUSTICE SUBHENDU SAMANTA CRIMINAL REVISION CASE NO: 2098 OF 2009 Between: 1. VEMULA MADHUSUDHANA RAO, S/o. Late Ramakrishna, R/o. Rajanalavari Street, Sangadigunta, Guntur , Guntur District. ...Petitioner AND 1. PEDAMALLU SRINIVASA RAO AND ANOTHER, S/o. Surya Prakasa Rao, R/o. Nagarampalem, Guntur , Guntur District. 2. The State, rep by its Public Prosecutor, High Court of A.P., Hyderabad. ...Respondents Counsel for the Petitioner: NUTHALAPATI KRISHNA MURTHY Counsel for the Respondents: REGULAGADDA VENKATESH Counsel for the Respondents:LEGAL AID The Court made the following order: ORDER: Instant Criminal Revision Case has been preferred against the judgment dated 09.12.2009 in Crl.A.No.192 of 2009 on the file of the learned III Additional Sessions Judge, Guntur, confirming the judgment and sentence passed in C.C.No.351 of 2007 dated 11.05.2009 by the learned IV Additional Junior Civil Judge, Guntur, whereby the petitioner was convicted for the commission of an offence under Section 138 of the NI Act. 2. Brief facts of the matter are that the petitioner/accused borrowed an amount of Rs.57,500/- for his business expenses from the de-facto complainant by executing a promissory note, agreeing to repay the same with subsequent interest @ 24% p.a. In spite of several requests and repeated demands by the complainant, the accused did not pay the amount. However, he issued a cheque bearing No.870574 for Rs.70,000/- drawn on State Bank of India, Sangadigunta Branch, Guntur, on 26.10.2026. The complainant presented the said cheque through his banker for encashment, but the same was dishonoured and returned with an endorsement of “insufficient funds”. Hence, the complainant lodged a complaint before the concerned Magistrate. After hearing, the learned Magistrate found the petitioner guilty of the offence under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for a period of six (06) months and to pay a fine of Rs.5,000/-. The learned Appellate Court dismissed the appeal, confirming the order of conviction, but reduced the sentence from six months to three months. Hence, this revision. 3. Heard Sri Nuthalapati Krishna Murthy, learned counsel for the petitioner, Sri Regulagadda Venkatesh, learned legal aid counsel for respondent No.1 and Sri P. Somayaji, learned Assistant Public Prosecutor. Perused the record. 4. During the pendency of the instant Criminal Revision Case, the petitioner intended to settle the matter. The matter was referred to the National Lok Adalat for compromise. But, due to the absence of the complainant, the same was not effected. The petitioner was also permitted to take out personal notice to respondent No.1, but the same was returned as unserved. Consequently, this Court, vide order dated 30.07.2025, also permitted the petitioner to effect substituted service upon respondent No.1 by publishing the same in a daily newspaper widely circulated in the area where the petitioner was residing. In terms of such direction, the petitioner effected substituted service by causing publication in “Prajasakthi” Guntur Edition on 20.08.2025. 5. In spite of such service, none appeared on behalf of respondent No.1. Having no other alternative, this Court directed the Andhra Pradesh High Court Legal Services Committee to appoint legal aid counsel for respondent No.1. In terms of the said direction, Sri Regulagadda Venkatesh, learned counsel, was appointed as legal aid counsel for respondent No.1. It appears from the record that the petitioner, from the beginning, is ready to compromise the matter, but due to the absence of respondent No.1, the said compromise was not effected. 6. At this juncture, it is appropriate to refer to the judgment of the Hon’ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar & Anr.,(2025 INSC 1158), wherein the Hon’ble Supreme Court has set out the rule and formula for compromising cases under Section 138 of NI Act at different stages. The guidelines mentioned at paras 37 and 38 reads as under: “37. It is pertinent to mention that this Court framed guidelines for compounding offences under the NI Act nearly fifteen years back in Damodar S. Prabhu (supra). The relevant portion of the said Judgment is reproduced hereinbelow:- “THE 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 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. xxx xxx xxx 24. We are also conscious of the view that the judicial endorsement of the abovequoted Guidelines could be seen as an act of judicial law-making and therefore an intrusion into the legislative domain. It must be kept in mind that Section 147 of the Act does not carry any guidance on how to proceed with the compounding of offences under the Act. We have already explained that the scheme contemplated under Section 320 CrPC cannot be followed in the strict sense. In view of the legislative vacuum, we see no hurdle to the endorsement of some suggestions which have been designed to discourage litigants from unduly delaying the composition of the offence in cases involving Section 138 of the Act. 25. The graded scheme for imposing costs is a means to encourage compounding at an early stage of litigation. In the status quo, valuable time of the court is spent on the trial of these cases and the parties are not liable to pay any court fee since the proceedings are governed by the Code of Criminal Procedure, even though the impact of the offence is largely confined to the private parties. Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance. Bona fide litigants should of course contest the proceedings to their logical end. 26. Even in the past, this Court has used its power to do complete justice under Article 142 of the Constitution to frame guidelines in relation to the subject-matter where there was a legislative vacuum.” 38. Since a very large number of cheque bouncing cases are still pending and interest rates have fallen in the last few years, this Court is of the view that it is time to „revisit and tweak the guidelines‟. Accordingly, the aforesaid guidelines of compounding are modified as under:- (a) If the accused pays the cheque amount before recording of his evidence (namely defence evidence), then the Trial Court may allow compounding of the offence without imposing any cost or penalty on the accused. (b) If the accused makes the payment of the cheque amount post the recording of his evidence but prior to the pronouncement of judgment by the Trial Court, the Magistrate may allow compounding of the offence on payment of additional 5% of the cheque amount with the Legal Services Authority or such other Authority as the Court deems fit. (c) Similarly, if the payment of cheque amount is made before the Sessions Court or a High Court in Revision or Appeal, such Court may compound the offence on the condition that the accused pays 7.5% of the cheque amount by way of costs. (d) Finally, if the cheque amount is tendered before this Court, the figure would increase to 10% of the cheque amount.” 7. The Hon’ble Supreme Court directed that at the stage of revision before the High Court, when the petitioner comes forward to compromise the matter, the entire cheque amount along with 10% of the amount has to be paid to the de-facto complainant. 8. Complainant is absent before this Court. Offence under Section 138 of NI Act is compoundable under Section 147 of NI Act. For compounding the offence consent of victim is required. The Hon’ble Supreme Court in A.S.Pharma Pvt. Ltd. Vs. Nayati Medical Pvt. Ltd and others has decided this issue as follows: “17. It is in the aforesaid circumstances that we held that the question whether the offence under Section 138, N.I. 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 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.” 9. Since, consent of complainant is mandatory for compounding offence under Section 138 of NI Act, in this case, offence cannot be compounded. However, considering long pendency of this matter it would be justified to dispose of the present Criminal Revision Case by confirming conviction of petitioner in view of order of the learned trial court under Section 138 of NI Act but converting substantive sentence of Simple Imprisonment of three months to fine which shall be treated as compensation to victim in tune of entire cheque amount together with 10% of the amount, over and above fine amount already ordered. 10. By following the said guidelines of the Hon’ble Apex Court, I deem it appropriate to pass necessary orders and dispose of the matter, as the matter has been pending since 2009. In view of the same, the petitioner is directed to deposit the entire cheque amount of Rs.57,500/- together with 10% of the said amount, i.e., Rs.5,750/-, totaling Rs.63,250/- (Rupees Sixty-Three Thousand Two Hundred and Fifty only), before the learned Trial Court within six weeks from the date of receipt of a copy of this order. 11. In view of the above, the Criminal Revision Case is disposed of. No order as to costs. As a sequel, miscellaneous petitions, if any, pending in this Criminal Revision Case shall stand closed. _______________________ SUBHENDU SAMANTA, J Date:28.09.2026 JLSR 163 THE HON’BLE SRI JUSTICE SUBHENDU SAMANTA CRIMINAL REVISION CASE No:2098 of 2009 28.09.2026 JLSR