R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/CRIMINAL REVISION APPLICATION (AGAINST CONVICTION - NEGOTIABLE INSTRUMENT ACT) NO. 1689 of 2026 ========================================================== NILESHKUMAR RAMESHBHAI PARMAR Versus STATE OF GUJARAT ========================================================== Appearance: MR DURGESHKUMAR R RAWAL(13653) for the Applicant(s) No. 1 MR MAYANK P SHAH(13933) for the Applicant(s) No. 1 MR SOAHAM M JOSHI, APP for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MS. JUSTICE S.V. PINTO Date : 04/08/2026 ORAL ORDER 1. Learned advocate Mr. Tulan U. Vaishnav submits that he has instructions to appear on behalf of the respondent No.2 – original complainant and seeks permission to le his appearance. Registry to accept. 2. Rule. Learned APP waives service of rule for the respondent No.1-State and learned advocate Mr. Tulan U. Vaishnav for the respondent No.2. 3. Learned advocate Mr. Mayank P. Shah for the applicant and learned advocate Mr. Tulan U. Vaishnav for the respondent No.2 – original complainant, jointly submit that the matter is amicably settled between the parties and the R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 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 – accused has prayed to quash and set aside the judgment and order of conviction passed by the learned Additional Sessions Judge, Court No.23, City Civil & Sessions Court, Ahmedabad in Criminal Appeal No. 336 of 2024 dated 16.05.2026 conrming the judgment and order passed by the learned Additional Chief Metropolitan Magistrate, N.I. Act, Court No.32, Ahmedabad in Criminal Case No. 91588 of 2018 dated 30.03.2024, whereby, the present applicant - accused was sentenced simple imprisonment for one year and ordered to pay an amount of Rs.7,30,000/- as compensation to the complainant within three months, and in default, simple imprisonment for three months for the o9ence under Section 138 of the Negotiable Instruments Act, 1881. 6. Heard learned advocate Mr. Mayank P. Shah for the applicant, learned APP Mr. Soaham M. Joshi for the R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 respondent No.1 – State and learned advocate Mr. Tulan U. Vaishnav for the respondent No.2 – original complainant. 7. Learned advocate Mr. Mayank P. Shah 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. Learned advocate further submits that the applicant at present is in custody undergoing the sentence. 8. Learned advocate Mr. Tulan U. Vaishnav for the respondent No.2 – original complainant submits that the respondent No.2, Jashwantbhai Dabgar, - original complainant has appeared through online mode and has produced a copy of a9idavit of the respondent No.2 – original complainant, which is taken on record. Page 3 of 11 R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 9. Learned APP Mr. Soaham M. Joshi for the respondent No.1 – State submits that the impugned judgment and order of sentence is just and proper; however, considering the fact that the dispute between the parties is amicably settled, necessary order may be passed. 10. The respondent No.2 – original complainant has appeared through online mode, 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 a9idavit and submits that the compromise has been entered into of his own free will without any fear, threat and coercion. 11. The a9idavit led by the respondent No. 2 – original complainant reads as under: “I, Jashwantbhai Dabgar, S/o. Ramanbhai Dabgar, aged about 66 Years, Hindu, Occupation: Retired, Residing at: B/5, Girivrund Society, Opp. Kubreshwar Mahadev, Naroda Road, Ahmedabad-382345, do hereby solemnly a9irm that; 1. I am the Respondent No. 2 herein, being the Original Complainant in Criminal Case No. 91588 of 2018, and I am conversant with the facts of the case and competent to a9irm this A9idavit. R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 2. I had led a Complaint under Section 138 of the Negotiable Instruments Act, 1881 against the Applicant herein, Nileshkumar Rameshbhai Parmar, before the Learned Additional Chief Metropolitan Magistrate, Court No. 32, Ahmedabad, in respect of the dishonour of Cheque No. 038286 dated August 20, 2018, drawn by the Applicant in my favour for an amount of Rs. 7,00,000/- (Rupees Seven Lakh Only), which was returned unpaid vide Bank Memo dated August 23, 2018 with the remark "Payment Stopped by Drawer". The said Complaint was registered as Criminal Case No. 91588 of 2018. 3. By Judgment and Order dated March 30, 2024, the Learned Magistrate convicted the Applicant for the o9ence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced him to undergo simple imprisonment for a period of one (01) year, together with a direction to pay compensation of Rs. 7,30,000/- (Rupees Seven Lakh Thirty Thousand Only) to me, in default whereof to undergo further simple imprisonment for a period of three (03) months. Being aggrieved thereby, the Applicant preferred Criminal Appeal No. 336 of 2024 before the Learned Additional Sessions Judge, Ahmedabad City, in the course of which the Applicant deposited 20% of the cheque amount, i.e., Rs. 1,46,000/- (Rupees One Lakh Forty-Six Thousand Only), on May 31, 2024 and July 12, 2024, which amount was withdrawn by me pursuant to Order dated October 16, 2024. 4. The aforesaid Criminal Appeal No. 336 of 2024 came to be dismissed by the Learned Additional Sessions Judge vide Order dated May 16, 2026, upholding the conviction and sentence recorded by the Learned Trial Court. Being aggrieved thereby, the Applicant has preferred the present Criminal Revision Application No. 1689 of 2026 before this R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 Hon'ble High Court, wherein the Applicant is presently in judicial custody since August 01, 2026. Pursuant to discussions held between the families of the parties, an amicable settlement has since been arrived at between the Applicant and myself, and I am a9irming this Consent A9idavit in furtherance of the said settlement. 5. I, the Original Complainant/Respondent No. 2 herein, do hereby a9irm and conrm the aforesaid settlement and consent to the settlement amount of Rs. 6,00,000/- (Rupees Six Lakh Only), over and above the amount of Rs. 1,46,000/-already deposited by the Applicant and withdrawn by me as stated in Paragraph 3 above, in full and nal settlement of all claims arising out of the aforesaid transaction. 6. I hereby acknowledge receipt of the aforesaid sum of Rs. 6,00,000/- (Rupees Six Lakh Only) paid by the Applicant through NEFT/RTGS transfer into my bank account, the copy of the transfer conrmation /receipt being annexed hereto and marked as ANNEXURE-A. 7. In view of the receipt of the full and nal settlement amount as aforesaid, I have no objection whatsoever to the release of the Applicant and to the setting aside or quashing of the conviction and sentence passed by the Learned Magistrate, Court No. 32, in Criminal Case No. 91588 of 2018, as upheld by the Learned Additional Sessions Judge, Ahmedabad City, in Criminal Appeal No. 336 of 2024, and I have no objection to this Hon'ble Court allowing Criminal Revision Application No. 1689 of 2026 and acquitting the Applicant of the charge under Section 138 of the Negotiable Instruments Act, 1881. 8. 8. I hereby a9irm and declare that, upon receipt of the aforesaid settlement amount, no dues, claims, or demands whatsoever remain outstanding or payable by the Applicant to me arising out of Criminal Case No. 91588 of R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 2018, Criminal Appeal No. 336 of 2024, or the present Criminal Revision Application No. 1689 of 2026, or out of the underlying transaction between the parties, and I shall not initiate or pursue any further civil, criminal, or other proceedings against the Applicant in respect thereof. 9. The contents of this A9idavit have been read over and explained to me in Gujarati, my regional language, and having understood the same, I have a9irmed this A9idavit voluntarily and without any coercion, threat, undue in;uence, or inducement from any person. 10. The contents of this A9idavit are true and correct to the best of my knowledge, information, and belief, and nothing material has been concealed therefrom.” 12. Section 147 of the N.I.Act makes o9ences under the Act compoundable notwithstanding anything contained in the Code of Criminal Procedure. The Hon’ble Supreme Court 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 R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 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 o9ence under section 138 of the N.I.Act is a mainly a civil wrong and has been made specically 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 su9ers a setback. At the same time, it was also noted that nature of o9ence under Section 138 primarily related to a civil wrong and the 2002 amendment specically 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 o9ence 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 e9ect 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 benets that the settlement agreement postulates. Once parties voluntarily entered into such an agreement and agree R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 to abide by the consequence of non-compliance of the settlement agreement, they cannot be allowed to reverse the e9ects 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 o9ence, 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 modied the 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 R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 Supreme Court specically 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 Additional Sessions Judge, Court No.23, City Civil & Sessions Court, Ahmedabad in Criminal Appeal No. 336 of 2024 dated 16.05.2026 conrming the judgment and order passed by the learned Additional Chief Metropolitan Magistrate, N.I. Act, Court No.32, Ahmedabad in Criminal Case No. 91588 of 2018 dated 30.03.2024 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 two weeks of his release and shall place proof of such deposit on record. Page 10 of 11 R/CR.RA/1689/2026 ORDER DATED: 04/08/2026 19. Subject to deposit of the aforesaid costs, the o9ence shall stand compounded and the applicant shall stand acquitted of the charge under Section 138 of the N.I.Act. As the applicant is in custody undergoing the sentence, he shall be released forthwith. 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 04/08/2026 18:40:21