R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/CRIMINAL REVISION APPLICATION (AGAINST CONVICTION - NEGOTIABLE INSTRUMENT ACT) NO. 2371 of 2026 With CRIMINAL MISC.APPLICATION (FOR SUSPENSION OF SENTENCE) NO. 1 of 2026 In R/CRIMINAL REVISION APPLICATION NO. 2371 of 2026 ========================================================== ZAKIRBHAI GANIBHAI MANKAD Versus STATE OF GUJARAT & ANR. ========================================================== Appearance: MR MOHAMMEDASAD M KADIWALA(12733) 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 ORDER IN CRIMINAL REVISION APPLICATION: 1. Learned advocate Mr. Smit Vaghela submits that he has instructions to appear on behalf of the respondent no. 2 and seeks permission to file his appearance. Registry to accept the same. 2. Rule, learned APP waives service of rule for the respondent-State. Learned advocate Mr. Smit Vaghela for the respondent no. 2 waives service of rule for the respondent no. 2. 3. Learned advocates jointly submit that the matter is amicably settled between the parties as the applicant has R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 given the entire agreed amount to the respondent no. 2 and therefore, the present application be taken up for final 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 final 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 5th Additional Sessions Judge, Banaskantha at Deesa in Criminal Appeal No. 45/2026 dated 22.07.2026 confirming the judgment and order passed by the learned Additional Chief Judicial Magistrate, Deesa in Criminal Case No. 3722/2024 dated 30.01.2026, whereby, the present applicant - accused was sentenced simple imprisonment for one year and fine of of Rs. 5,00,000/-, and in default, simple imprisonment for six months for the offence under Section 138 of the Negotiable Instruments Act, 1881. 6. Heard learned advocate Mr. M.M. Kadiwala for the R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 applicant, learned advocate Mr. Smit Vaghela for the respondent no. 2 and learned APP Ms. C.M. Shah for the respondent – State. 7. Learned advocate Mr. M.M. Kadiwala for the applicant submits that the dispute between the parties has been amicably settled and the respondent no.2 – original complainant has received the settlement amount and does not wish to prosecute the matter further. The compromise has been entered into voluntarily, without any coercion, undue influence 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 Mr. Smit Vaghela submits that the respondent no. 2 – original complainant – Solanki Shankarbhai Naranji is present in-person before this Court. Learned advocate produces the affidavit filed by the respondent no. 2 which is taken on record. Learned advocate submits that the applicant has deposited an R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 amount of Rs. 1,00,000/- before the Sessions Court, Banaskantha at Deesa vide receipt no. 5156578 dated 27.02.2026 and the amount may be disbursed in favour of the respondent no. 2. 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 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 of has been received and he does not wish to prosecute the matter further. He admits to the contents of the affidavit and submits that the compromise has been entered into his own free will without any fear, threat and coercion. 11. The affidavit filed by the respondent no. 2 – original complainant reads as under: R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 “I, Shankarbhai son of Naranji Solanki, aged about 58 years, residing at: Behind Deepak Hotel, Kant Road, Deesa, Taluka: Deesa, District: Banaskantha, the respondent No. 2 – original complainant herein, do hereby state on oath and declare as under:- 1. It is respectfully stated that, I am the original complainant in Criminal Case No. 3722 of 2024 filed before the Court of the Learned Additional Chief Judicial Magistrate, Deesa, for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 2. It is respectfully stated that vide judgment and order dated 30.01.2026, the Learned Additional Chief Judicial Magistrate, Deesa, was pleased to convict the present applicant (original accused) and sentence him to undergo simple imprisonment for a period of one year, along with an order to pay a compensation of Rs. 5,00,000/-(Rupees Five Lakhs Only). The said judgment and order was confirmed by the Learned 5th Additional Sessions Judge, Banaskantha at Deesa, vide judgment and order dated 22.07.2026 in Criminal Appeal No. 45 of 2026. 3. It is respectfully submitted that the applicant (original accused) has preferred the above referred Criminal Revision Application challenging the aforesaid judgments and orders of conviction. And is further submitted that along with the said Revision Application, the applicant has also preferred the present Criminal Misc. Application seeking suspension of sentence and to be released on bail pending the final disposal of the Revision Application. 4. It is respectfully stated that during the pendency of the present proceedings, an amicable settlement has been arrived at between myself and the applicant (original accused) outside the Court. The dispute, has been resolved on the following agreed terms: A. The applicant has paid an amount of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only) in cash. B. The deponent, shall be permitted to withdraw the deposit amount of Rs. 1,00,000/- (Rupees One Lakh Only), which was deposited by the present applicant before the Learned Sessions Court, Banaskantha at Deesa. Page 5 of 11 R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 C. The remaining outstanding amount shall be paid by the applicant to deponent in regular, agreed-upon instalments. 5. It is respectfully submitted that in view of the aforesaid amicable settlement and the part-payment received. The grievance against the applicant stands entirely redressed. 6. It is respectfully submitted that considering the totality of the facts and circumstances of the case, the deponent have no objection whatsoever if this Honourable Court is pleased to allow the present Criminal Misc. Application by suspending the sentence imposed upon the applicant and releasing him on bail. 7. It is further stated that the deponent herein has no objection if this Honourable Court is pleased to allow the captioned Criminal Revision Application, and quash and set aside the impugned judgment and order of conviction dated 30.01.2026 passed by the Learned Additional Chief Judicial Magistrate, Deesa, in Criminal Case No. 3722 of 2024 (as confirmed by the impugned judgment and order dated 22.07.2026 passed by the Learned 5th Additional Sessions Judge, Banaskantha at Deesa, in Criminal Appeal No. 45 of 2026), and consequently acquit the applicant. 8. What is stated hereinabove is true and correct to the best of my personal knowledge, information, and belief, and I believe the same to be true. Solemnly affirmed at Ahmedabad on this the 11th day of August, 2026. 12. Section 147 of the N.I.Act makes offences 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 R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 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 offence under section 138 of the N.I.Act is a mainly a civil wrong and has been made specifically 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 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.” 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 offence under section 138 N.I.Act as a “Civil Sheep” in “Criminal R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 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 effect 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 benefits 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 effects 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 offence, 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.” R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 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 modified 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% by way of cost. 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 specifically 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. Thus, permitting the present compromise does not offend the principles laid down in Damodar S. Prabhu (Supra) or Sanjabij Tari (Supra); rather, the same is subject to payment of costs in terms of the modified guidelines. Page 9 of 11 R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 16. Accordingly, the present application is allowed. 17. The judgment and order of conviction passed by the learned 5th Additional Sessions Judge, Banaskantha at Deesa in Criminal Appeal No. 45/2026 dated 22.07.2026 confirming the judgment and order passed by the learned Additional Chief Judicial Magistrate, Deesa in Criminal Case No. 3722/2024 dated 30.01.2026 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 settlement amount before the District Service Legal Authority, Banaskantha @ Palanpur by any mode, within a period of four weeks from the date of his release and shall place proof of such deposit on record. 19. Subject to deposit of the aforesaid costs, the offence shall stand compounded and the applicant shall stand acquitted of the charge under Section 138 of the N.I.Act. Page 10 of 11 R/CR.RA/2371/2026 ORDER DATED: 11/08/2026 20. The respondent no. 2 is permitted to withdraw the amount of Rs. 1,00,000/- deposited by the applicant before the Additional Sessions Court, Banaskantha at Deesa vide receipt no. 5156578 dated 27.02.2026. The Additional Sessions Court, Banaskantha at Deesa, is directed to release the said amount of Rs. 1,00,000/- to the respondent no. 2 – original complainant, upon due verification. 21. Rule is made absolute to the aforesaid extent. Direct service is permitted. ORDER IN CRIMINAL MISC. APPLICATION: In view of the above, the present application does not survive and is disposed of accordingly. (S. V. PINTO,J) VASIM S. SAIYED Original copy of this order has been signed by the Hon'ble Judge. Digitally signed by: VASIM SHABBIR SAIYED(HC01902), PRIVATE SECRETARY, at High Court of Gujarat on 11/08/2026 18:57:58