R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/CRIMINAL REVISION APPLICATION (AGAINST CONVICTION - NEGOTIABLE INSTRUMENT ACT) NO. 2360 of 2026 ========================================================== VIJAYBHAI MOHANBHAI SHAH(CHOPRA) Versus STATE OF GUJARAT & ANR. ========================================================== Appearance: MR.MRUDUL M BAROT(3750) for the Applicant(s) No. 1 MS. C.M. SHAH, APP for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MS. JUSTICE S.V. PINTO Date : 11/08/2026 ORAL ORDER 1. Learned advocate Ms. Suman K. Chaudhary submits that he has instructions to appear on behalf of the respondent No.2 – original complainant and seeks permission to le her appearance. Registry to accept. 2. Rule. Learned APP waives service of rule for the respondent No.1-State and learned advocate Ms. Suman K. Chaudhary waives service of rule for the respondent No.2. 3. Learned advocate Mr. Mrudul M. Barot for the applicant and learned advocate Ms. Suman K. Chaudhary for the respondent No.2 – original complainant, jointly submit that the matter is amicably settled between the parties and R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 the present application be taken up for nal hearing and be disposed of accordingly. 4. In view of the above submissions made by the learned advocates for the respective parties, the matter is taken up for nal hearing. 5. By way of the present application, the applicant has prayed to quash and set aside the judgment and order passed by the learned City Civil Judge & Sessions Court No.15, Ahmedabad in Criminal Appeal No. 227 of 2009 dated 24.07.2026 con rming the judgment and order passed by the learned Metropolitan Magistrate, N.I. Act, Court No.2, Ahmedabad in Criminal Case No. 50 of 2008 dated 20.08.2009, whereby, the present applicant was sentenced to simple imprisonment for one year and ne of Rs.5000/-, and in default, simple imprisonment for three months for the o6ence under Section 138 of the Negotiable Instruments Act, 1881. 6. Heard learned advocate Mr. Mrudul M. Barot for the applicant, learned APP Ms. C.M. Shah for the respondent No.1 – State and learned advocate Ms. Suman K. Chaudhary for the respondent No.2 – original complainant. Page 2 of 9 R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 7. Learned advocate Mr. Mrudul M. Barot for the applicant submits that the dispute between the parties has been amicably settled and the respondent No.2 – original complainant has received the entire settlement amount and does not wish to prosecute the matter further. The compromise has been entered into voluntarily, without any coercion, undue in:uence or pressure and, therefore, the respondent No.2 has no objection if the impugned judgment and order of conviction as well as all other consequential proceedings arising pursuant thereto are quashed against the applicant – accused. 8. Learned advocate Ms. Suman K. Chaudhary for the respondent No.2 – original complainant submits that the respondent No.2, Vijaybhai Mohanbhai Shah (Chopra), - original complainant is present in-person before this Court and has produced a copy of a6idavit of the respondent No.2 – original complainant, which is taken on record. 9. Learned APP Ms. C.M. Shah for the respondent No.1 – State submits that the impugned judgment and order of sentence is just and proper; however, considering the fact R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 that the dispute between the parties is amicably settled, necessary order may be passed. 10. The respondent No.2 – original complainant is present in-person before this Court, and on inquiry, submits that the dispute between them has been settled amicably and the entire settlement amount has been received and he does not wish to prosecute the matter further. He admits to the contents of the a6idavit and submits that the compromise has been entered into of his own free will without any fear, threat and coercion. 11. The a6idavit led by the respondent No. 2 – original complainant reads as under: “I, Manhar Sukhlalbhai Patel, Aged: Years, Male, Residing at: 32, Mahalakshmi Society, Shahibaug, Ahmedabad, le the following a6idavit and state on solemn a6irmation on oath as under; 1. I state that I am the Respondent no. 2, i.e. original complainant, in connection with the Old Criminal Case No.102 of 2005 and New Criminal Case No.50 of 2008 against the Applicant for the o6ences punishable under Section 138 of NI Act, 1881 and I state that I have decided to settle the dispute with the present Applicant, i.e. original accused. I am ling the present a6idavit for the said purpose. That I am well conversant with the facts of the case and I have gone through the entire contents of the present application; I am competent to le the present a6idavit. Page 4 of 9 R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 2. In the present case, the matter has been amicably resolved through mutual talks and compromise between the parties. 3. I say and submit that, subsequently, a full and nal settlement has been arrived at between me and the Applicant. In pursuance thereof, I have received a total sum of Rs. 5,00,000/- (Rupees Five Lakhs Only) from the Applicant, i.e. the Original Accused. Pursuant to the said settlement, a Settlement Deed has also been duly executed between the parties. I state that I have no grievance, claim, or objection whatsoever against the Applicant in respect of the subject matter of the present proceedings. A copy of the said Settlement Deed is annexed herewith and marked as Annexure – R1. 4. I say and submit that I have no objection if the impugned judgment and order dated 24.07.2026 passed by the Learned City Civil Judge and Sessions Court, Ahmedabad in Criminal Appeal No. 227 of 2009 and order dated 20.08.2009 passed by the Ld. Magistrate N.I.A Court No. 2, Ahmedabad in Old Criminal Case No. 102 of 2005 and New Criminal Case No.50 of 2008 and all proceedings arising therefrom be quashed and set aside in the interest of justice. 5. I say and submit that since the dispute is settled, I do not want to pursue further with the present Applicant, i.e. original accused and therefore, I have settled the matter with the present Applicant, i.e. original accused. 6. I say and submit that the present a6idavit is being led by me on my own volition without any force, threat, duress or coercion.” 12. Section 147 of the N.I.Act makes o6ences under the Act compoundable notwithstanding anything contained in the Code of Criminal Procedure. The Hon’ble Supreme Court R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663, recognized that the primary object of proceedings under Section 138 N.I. Act is compensatory in nature and encouraged compounding even at later stages subject to payment of appropriate costs. 13. Recently, in Gian Chand Garg v. Harpal Singh and Another, 2025 SCC OnLine SC 2317, the Hon’ble Supreme Court has observed in Para Nos. 5 to 10 as under : “5. Be that as it may, at the outset, it is apposite to advert to settled position of law enunciated by this Court with regard to nature of proceedings under Section 138 of N.I.Act and the legal consequences that ensues upon a compromise being entered into between the parties. 6. This court in M/s. Meters and Instruments Private Limited & Anr. v. Kanchan Mehta, 2018 (1) SCC 560 held that the nature of o6ence under section 138 of the N.I.Act is a mainly a civil wrong and has been made speci cally compoundable by section 147 of the N.I.Act which was inserted by the 2002 amendment to the said Act. The relevant observations have been extracted for reference: “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. 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 su6ers a setback. At the same time, it was also noted that nature of o6ence under Section 138 primarily related to a civil wrong and the 2002 amendment speci cally made it compoundable.” 7. It is also apposite to reiterate the observations in P. Mohanraj & Ors. v. M/s. Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258 wherein this court referred the o6ence R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 under section 138 N.I.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 v. Manoj Goel (2021) SCC OnLine SC 925 this court took into consideration the e6ect 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 bene ts that the settlement agreement postulates. Once parties voluntarily entered into such an agreement and agree to abide by the consequence of non-compliance of the settlement agreement, they cannot be allowed to reverse the e6ects of the agreement by pursuing both the original complaint and the subsequent complaint arising from such non-compliance. The Settlement agreement subsumes the original complaint……” 9. In B.V. Seshaiah v. 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 o6ence, 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 dishonour of cheque entails criminal consequence, the legislature by virtue of section 147 of the N.I.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.” 14. Further, in Sanjabij Tari v. Kishore S. Borcar and Another (Criminal Appeal No. 1755 of 2010, decided on 25.09.2025), the Hon’ble Supreme Court modi ed the R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 earlier guidelines relating to compounding costs and observed that where payment is made before the Sessions Court or High Court in revision/appeal, compounding may be permitted on payment of 7.5% of the cheque amount by way of costs. 15. So far as the objection that post-conviction compromise may dilute the rigour of criminal process is concerned, the same does not survive in view of the law laid down in Gian Chand Garg (supra), wherein the Hon’ble Supreme Court speci cally held that compounding under Section 138 N.I. Act can be permitted even after conviction and that such exercise does not violate the statutory scheme but rather advances the object of ensuring payment and reducing unnecessary litigation. 16. Accordingly, the present application is allowed. 17. The judgment and order of conviction passed by the learned City Civil Judge & Sessions Court No.15, Ahmedabad in Criminal Appeal No. 227 of 2009 dated 24.07.2026 con rming the judgment and order passed by the learned Metropolitan Magistrate, N.I. Act, Court No.2, Ahmedabad in Criminal Case No. 50 of 2008 dated 20.08.2009 R/CR.RA/2360/2026 ORDER DATED: 11/08/2026 under Section 138 of the N.I.Act are hereby quashed and set aside on the basis of compromise between the parties. 18. However, as the settlement has been arrived at the stage of proceedings before this Court, the applicant shall deposit costs equivalent to 7.5% of the cheque amount with the Gujarat State Legal Services Authority within a period of four weeks from the date of this order and shall place proof of such deposit on record. 19. Subject to deposit of the aforesaid costs, the o6ence shall stand compounded and the applicant shall stand acquitted of the charge under Section 138 of the N.I.Act. 20. Rule made absolute. 21. Direct service is permitted. (S. V. PINTO,J) ROHAN SONI Original copy of this order has been signed by the Hon'ble Judge. Digitally signed by: ROHAN SONI(HC02356), ENGLISH STENO GRADE-II\, at High Court of Gujarat on 11/08/2026 19:00:24