Narendra Kumar v. Sagar) under Section

4. Learned counsel for applicant has submitted that with respect to the dishonour of cheque bearing No.000011 dated 29.9.2018 of an amount of Rs.75,000/- a statutory demand notice came to be issued by the opposite party No.2 which followed by a complaint under Section 138 of N.I. Act and post conduction of trial the Court of Judicial Magistrate, Nawabganj, Bareilly on 16.1.2025 passed in Complaint Case No.25 of 2019 (Narendra Kumar Vs. Sagar) proceeded to convict the applicant under Section 138 of the N.I. Act for a simple imprisonment of six months and for a fine to the tune of Rs.1,17,501.88/- out of which Rs.1,13,501.88/- was to be accorded to the opposite party no.2 and Rs.4,000/- as fine to State.

5. Assailing the order of conviction applicant preferred Criminal Appeal No.299 of 2025 (Sagar Vs. State of U.P.) which came to be dismissed for want of non prosecution on 25.3.2025.

6. Learned counsel for applicant has submitted that now the parties have entered into compromise on 30.4.2025. A copy whereof is on record as Annexure - No.8 at page 41 onwards reference whereon has been made in Paragraph No.16 according to them the opposite party No.2 has received an amount of Rs.70,000/- and now nothing remains to be be further proceeded with and the conviction order to be set aside.

7. Mohammad Waseem, learned counsel for opposite party no.2 has invited the attention of the Court towards their affidavit filed on 28.7.2025 that now the compromise stands entered into between the parties and the amount has been received and nothing remains further and the proceedings be quashed.

8. Learned AGA accepted the arguments of learned counsel for the parties.

9. I have heard these submissions so made across at bar and perused the record carefully.

10. Apparently, with respect to the dishonour of cheque bearing No.000011 dated 29.9.2018 for an amount of Rs.75,000/- a statutory demand notice came to be issued followed by an order of conviction passed by the Judicial Magistrate, Nawabganj, Bareilly on 16.1.2025 in Complaint Case No.25 of 2019 sentencing the applicant for simple imprisonment of six months and fine of Rs.1,17,501.88/- out of which Rs.1,13,501.88/- which to be paid to the opposite party No.2 ad Rs.4,000/- to State. An appeal came to be preferred being Crl. Appeal No.299 of 2025 which came to be dismissed for want of non prosecution on 25.3.2025 and thereafter on 30.4.2025 the parties have entered into compromise. The details of the compromise are being quoted herein:- "समझझौततानतामता नररेन्द्र ककमतार पकत्र शश्री हश्रीरतालताल ननवतासश्री पकरतानता ब्ललॉक कचहरश्री ररोड , ननकट दकरतार्गा मनन्दर कस्बता व थतानता-नबतावरगंज, जजलता बररेलश्री, (मरो० नगं०-8077673570) ...................प्रथम पक व/मध्य सतारर पकत्र शश्री रगंरतारताम , ननवतासश्री गताम पईपकरता, डलॉ० रमपकरता, थतानता नबलतासपकर, जजलता रतामपकर। (मरो०नगं० 9756485769) ....................नद्वितश्रीय पक प्रथम पक व नद्वितश्रीय पक मम उक्त समझझौतता स्वरेच्छता सरे नबनता जरोर दबताव नकयता रयता जजसकरो ननम्न प्रकतार रवताहहों कक उपनस्थनत मम जलखता व हस्तताकररत नकयता रयता-

1. यह नक प्रथम पक नरे नदनतागंक 20.02.2019 करो नद्वितश्रीय पक करे नवरूद्ध एक पररवताद सगं० 25/2019, नररेन्द्र ककमतार बनताम सतारर, धतारता 138 एन०आई०एक्ट, थतानता नबतावरगंज जजलता बररेलश्री , मता० न्यतायतालय न्यतानयक मजजस्टटरेट, नबतावरगंज, जजलता बररेलश्री मम प्रस्तकत नकयता थता।

2. यह नक उक्त पररवताद मम मता० न्यतायतालय न्यतानयक मजजस्टटरेट, नबतावरगंज, बररेलश्री नरे नद्वितश्रीय पक करो दरोषश्री करतार दरेतरे हहए नदनतागंक 16.01.2025 करो धतारता 138 परताकताम्य जलखत अजधननयम करे तहत छह मताह (6 मताह) करे सताधतारण कतारतावतास एवगं रूपयता 1,17,501.88/- रू करे अथर्गादण्ड सरे दनण्डत नकयता थता।

3. यह नक नद्वितश्रीय पक द्वितारता मता० न्यतायतालय न्यतानयक मजजस्टटरेट, नबतावरगंज करे उक्त दण्डतादरेश नदनतागंक 16.01.2025 करे नवरूद्ध एक (अपश्रील) नक०नम० नगं० 299/2025 नदनतागंक 19.02.2025 करो सत्र न्यतायताधश्रीश, बररेलश्री करे न्यतायतालय मम यरोजजत कक थश्री।

4. यह नक उक्त अपश्रील नद्वितश्रीय पक करे अजधवक्तता कक घरोर लतापरवताहश्री करे कतारण फझौजदतारश्री अपश्रील परोषणश्रीयतता करे नबन्दक पर सकनवताई करे नदन नदनतागंक 25.03.2025 करो नद्वितश्रीय पक करे अजधवक्तता करे न्यतायतालय न पहहगंचनरे/अनकपनस्थनत करे कतारण उक्त फझौजदतारश्री अपश्रील करो मता० सत्र न्यतायताधश्रीश नरे अगंरश्रीकरण करे नबन्दक पर अपश्रीलताथर्थी कक अनकपनस्थनत मम नबनता रकण दरोष पर नवचतार नकयरे ननरस्त कर दश्री थश्री।

5. यह नक नद्वितश्रीय पक नरे उक्त दण्डतादरेश करे नवरूद्ध पकननः करोई अपश्रील नकसश्री भश्री न्यतायतालय मम प्रस्तकत नहहीं कक हह तथता अब प्रथम पक व नद्वितश्रीय पक मम ककछ भलरे व सम्भतान्त लरोरहों नरे बहठताकर सकलह करता दश्री हह तथता प्रथम पक नररेन्द्र ककमतार करो नद्वितश्रीय पक सतारर नरे रू 70,000/- (सत्तर हजतार रूपयरे) अपनरे खतातता सगं० 05261000013890 बबक पगंजताब एण्ड जसगंध बबक शताखता कतादरश्रीरगंज नबलतासपकर, आई०एफ०एस०सश्री० करोड PSIB0000526 सरे (UPI) करे मताध्यम सरे नदनतागंक 30.04.2025 करो प्रथम पक नररेन्द्र ककमतार करे भतारतश्रीय स्टरेट बबक शताखता नबतावरगंज करे खतातता सगं० 33209172946 आई०एफ०एस०सश्री० करोड SBIN0004716 मम टटतागंसफर कर नदयरे हब जरो नक प्रथम पक नररेरे्द्र ककमतार (पररवताद करे पररवतादश्री) करो प्रताप्त हरो रयरे हब जजसकक टटतागंजक्शन आई०डश्री०टश्री-2504301148015856339782 तथता यय०टश्री०आर० नगं० 422149850283 हह।

6. यह नक प्रथम पक नद्वितश्रीय पक सरे प्रताप्त रू 70,000/- (सत्तर हजतार रूपयरे) मम सन्तकष्ट हह तथता अपनता सम्पयणर्गा दतानयत्व/दतावता नद्वितश्रीय पक करे प्रनत समताप्त करतता हह तथता अब प्रथम पक कता करोश्री रूपयता /दतावता नद्वितश्रीय पक पर बताकक नहहीं हह तथता उक्त पररवताद/दरोष जसनद्ध करो उक्त समझझौतरेनतामम करे आधतार पर समताप्त करतानता चताहतता हह तथता अब प्रथम पक, नद्वितश्रीय पक पर करोश्री कतायर्गावताहश्री नहहीं चताहतता हह।

7. यह नक प्रथम पक करो नद्वितश्रीय पक सरे सम्पयणर्गा रूपयता प्रताप्त हरो चककता हह तथता परथम पक इस तथ्य करो भश्री प्रकट करतता हह नक उक्त समझझौतरे करे आधतार पर नद्वितश्रीय पक करे नवरूद्ध उक्त पररवताद कक समस्त न्यतानयक उपशनमत कक जतावरे तथता नद्वितश्रीय पक करे नवरूद्ध पररवताद सगं० 25/2019 मम पताररत दरोषजसनद्ध आदरेश करो समताप्त करतानता चताहतता हह।

8. यह नक उक्त समझझौतरेनतामता स्वरेच्छता सरे, नबनता जरोर दबताव, स्वच्छ मनस्तष्क सरे रवताहहों करे समक व उपनस्थनत मम जलखत नकयता रयता हह जजस पर प्रथम पक व नद्वितश्रीय पक व रवताह स्वरेच्छता सरे हस्तताकर कर रहरे हब। रवताह-1 चन्द्र ककमतार पकत्र शश्री मगंशता रताम जसगंह ननवतासश्री सरेक्टर-1 रतामरगंरता नरर कलॉलरोनश्री, बश्री०डश्री०ए० नबचपकरश्री, जजलता बररेलश्री। (मरो०नगं०-8773837443) रवताह-2 अशरोक ककमतार पकत्र रणरेश रताम, ननवतासश्री ककसकमनर सतामनरे एम०जरे०पश्री० ययननवजसर्गाटश्री, जजलता बररेलश्री। (मरो०नगं० 9720794359) सत्यतापन समझझौततानतामता कक मद सगं० 1 लरतायत 8 सत्य व सहश्री हह, प्रथम पक व नद्वितश्रीय उक्त समझझौतरेनतामम पर अपनरे-अपनरे हस्तताकर स्वरेच्छता सरे, नबनता जरोर दबताव और स्वस्थ नचत मनस्तष्क सरे मय रवताहहों करे हस्तताकर रवताहहों करे समक व सतामनरे कर रहरे हब ततानक सनद रहरे व वक्त जरूरत कताम आवरे। सत्यतापन व तस्दश्रीक आज नदनतागंक 30.04.2025 वमककताम बररेलश्री कचहरश्री, बररेलश्री मम नकयता रयता। सगंलग्नकनः- आधतार कताडर्गा प्रथम पक, नद्वितश्रीय पक व रवताहतान।"

11. A short affidavit is also available on record wherein paragraph Nos. 2 to 4 the following has been averred. Further in paragraph No.17 of the application the following has been averred:- "That as per the terms and conditions of the compromise dated 30.4.2025 mentioned in para No.5 that the opposite party No.2 has received money Rs.70,000/- in his account bearing No.05261000013890 of Punjab and Sindh Bank on the very same day i.e. 30.04.2025."

12. Once the parties have entered into compromise and according to them nothing remains to be further proceeded and the entire amounts stands deposited then the next question which would be whether in exercise of jurisdiction under Section 482 Cr.P.C./528 B.N.S.S. the Court can annul/conviction and appellate order or not.

13. The Hon. Apex Court in B.V. Seshaiah: B Vamsi Krishna Vs. State of Telangana & another 2023 LawSuit (SC) 83 had the occasion to consider the said aspect it has observed as under:-

7. It is also to be noted that as per the terms of the agreement, the Respondent No.2 was bound to file a compromise petition before the High Court, however he failed to do so. The lack of filing of such a compromise petition, as agreed upon by the Respondent No.2, has now led to the High Court dismissing the Revision and confirming the Conviction of the Appellants.

8. In our view, the terms and conditions of the settlement entered into by the parties binds them to settle the dispute amicably, or through an arbitration as has been stated in clause 8 of the Memorandum Of Understanding.

9. In such a circumstance, the Appellants cannot be convicted on the basis of the orders passed by the courts below, as the settlement is nothing but a compounding of the offence.

10. In the case of M/S Meters and Instruments Private Limited & Anr. Vs. Kanchan Mehta, 2018 1 SCC 560, this court held that the nature of offence under Section 138 of the N.I Act is primarily related to a civil wrong and has been specifically 1 2018 (1) SCC 560 made a compoundable offence. The relevant paragraph of the judgment has been extracted herein: "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."

11. This is a very clear case of the parties entering into an agreement and compounding the offence to save themselves from the process of litigation. When such a step has been taken by the parties, and the law very clearly allows them to do the same, the High Court then cannot override such compounding and impose its will.

12. It must also be noted that the Respondent No.2 was duty bound to file a compromise petition before the High Court, and by not doing the same has withdrawn key information from the High Court, which has led to an unwarranted confirmation of the Appellants' conviction.

13. We, therefore, allow these Appeals and set aside the order of conviction passed by the trial court. It is, however, kept open to the parties to settle their dispute as per the terms of the Memorandum Of Understanding.

14. Further, in Rishi Mohan Sirvastav Vs. State of U.P. & another U/S 482/378/407 No.516 of 2021 decided on 13.8.2021, the following was observed as under:-

27. In reference to offence under section 138 of N.I. Act read with section 147 of the said Act, the parties are at liberty to compound the matter at any stage even after the dismissal of the revision application. Even a convict undergoing imprisonment with the liability to pay the amount of fine imposed by the court and/or under an obligation to pay the amount of compensation if awarded, as per the scheme of N.I. Act, can compound the matter. The complainant i.e. person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this court under section 482 Cr.P.C. If the parties are asked to approach the Apex Court then, what will be situation, is a question which is required to be considered in the background of another accepted progressive and pragmatic principle accepted by our courts that if possible, the parties should be provided justice at the door step. The phrase "justice at the door step" has taken the court to think and reach to a conclusion that it can be considered and looked into as one of such special circumstances for the purpose of compounding the offence under section 147 of the N. I. Act.

29. Merely because the litigation has reached to a revisional stage or that even beyond that stage, the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage, the nature of offence punishable under Section 138 of the N.I. Act should be treated as if the same is falling under table-II of Section 320 IPC. I would like to reproduce some part of the statement of objects and reasons of the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002 : "The Negotiable Instrument Act 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instrument Act, 1981, namely Section 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques. Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act.

2. A large number of cases are reported to be pending under Sections 138 and 142 of the Negotiable Instruments Act in various courts in the country. Keeping in view the large number of complaints under the said Act, pending in various courts, a Working Group was constituted to review Section 138 of the Negotiable Instruments Act, 181 and make recommendations as to what changes were needed to effectively achieve the purpose of that Section.

3. .............

4. Keeping in view the recommendations of the Standing Committee on finance and other R/SCR.A/2491/2018 ORDER representations, it has been decided to bring out, inter alia the following amendments in the Negotiable Instrument Act 1881, namely. (i) xxxxxx (ii) xxxxxx (iii) xxxxxx (iv) to prescribe procedure for dispensing with preliminary evidence of the complainant. (v) xxxxxx (vi) xxxxx (vii) to make the offences under the Act compoundable. ........

5. xxxxxx

6. The Bill seeks to achieve the above objects.

31. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect.

32. So the intention of the legislature and object of enacting "Banking", Public Financial Institutions and the Negotiable Instrument Laws (Amended Act) 1988 and subsequent enactment, 1.e., Negotiable Instruments (Amendment & Miscellaneous Provisions Act 2002 leads this Court to a conclusion that the offence made punishable under Section 138 of N.I. Act is not only an offence qua property but it is also of the nature of an economic offence, though not covered in the list of statutes enacted in reference to Section 468 of Cr.P.C. Thus, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage even after the dismissal of the application.

33. In the instant case, the problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute, furthermore, the arguments on behalf of the opposite parties on the fact that unlike Section 320 Cr.P.C., Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court.

34. I am also conscious of the view that judicial endorsement of the above quoted guidelines as given in the case of Damodar S. Prabhu (supra) 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. I have already explained that the scheme contemplated under Section 320 of the Cr.P.C. cannot be followed in the strict sense.

35. In view of the aforesaid discussion, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage. The complainant i.e. the person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this Court under Section 482 Cr.P.C. read with Article 226 of the Constitution of India.

36. Generally, the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however considering the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to appellate court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties."

15. Further, in Ravindra Kumar Yadav Vs. State of U.P. & another decided on 27.5.2024 it was observed as under:- para 27, 28, 29, 45, 46, 47,48.

27. In the instant case, it is true that this Court had dismissed the criminal revision and upheld the conviction and sentence passed by the court below but it cannot be lost sight of the fact that this Court has the power to intervene in exercise of the powers vested under section 482 Cr.P.C. only with a view to do the substantial justice or to avoid miscarriage and the spirit of the compromise arrived at between the parties. This is perfectly justified and legal too.

28. I have considered the judgments cited by the learned counsel for the applicant as well as by the learned Counsel for the State and other decisions of the Hon'ble Apex Court and I do not think it necessary to enlist those decisions which are taken into consideration for the purpose of the present proceedings.

29. In the instant case, the applicant is invoking the inherent power as vested under section 482 Cr.P.C. after the dismissal of the revision petition under section 397 Cr.P.C. read with section 401 Cr.P.C. In this circumstances, I have to examine the maintainability of the present application under section 482 Cr.P.C. and also to examine as to whether for entertaining the aforesaid application, any special circumstances are made out or not. The gist of the ratio is reflected in the decision of the Hon'ble Apex Court in the case of Rajinder Prasad vs. Bashir and Others; AIR 2001 SC 3524. In that case, it was contended before the Apex Court that as per the earlier revision filed by the accused persons under section 397 of the Code has been rejected by the High Court vide order dated 13.05.1990, they had no right to file the application under section 482 Cr.P.C. with the prayer for quashing the same order. While dealing with the above contention, observed under:- Court Apex "We are of the opinion that no special circumstances were spelt out in the subsequent application for invoking the jurisdiction of the High Court under section 482 of the Code and the impugned order is liable to be set aside on this ground alone." So it can be legitimately argued and inferred and held that in all cases where the applicants are able to satisfy this court that there are special circumstances which can be clearly spelt out, subsequent application invoking inherent powers under section 482 Cr.P.C. can be moved and cannot be thrown away on the technical argument as to its sustainability.

45. In view of the aforesaid discussion, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage. The complainant i.e. the person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this Court under Section 482 Cr.P.C. read with article 226 of the Constitution of India.

46. Generally, the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however, considering the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to appellate court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties.

47. As discussed above, the court is inclined to hold accordingly only because there is no formal embargo in Section 147 of the N.I. Act. This principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under Section 138 of the N.I. Act is distinctly different from the normal offences made punishable under Chapter XVII of IPC (i.e. the offences qua property).

48. In view of the observations and in view of the guidelines as laid down in the case of Damodar S. Prabhu (Supra) and also in view of the observations made in the judgment referred and taking into account the fact that the parties have settled the dispute amicably by way of compromise, this Court is of the view that the compounding of the offence as required to be permitted.

16. Accordingly, the present application under Section 528 B.N.S.S is allowed in terms of the compromise entered into between the parties through out of the Court on 30.4.2025. The judgment and order dated 16.01.2025 passed in Complaint Case No.25 of 2019 (Narendra Kumar Vs. Sagar) passed by Judicial Magistrate, Nawabganj, Bareilly, convicting the appellant under Section 138 of N.I. Act sentencing him for imprisonment of six months and directing for making of payment of Rs.1,17,501.88/- as compensation is hereby annulled and modified to the extent that applicant shall be treated acquitted on account of compounding offence with the complainant in pursuance of the compromise so entered into between them on 30.4.2025.

17. Learned Trial Court is directed that in case any amount stands deposited with the Trial Court which remains to be paid to the opposite party no.2/complainant by the applicant.

18. The parties are at liberty to file an appropriate application for relief of the same.

19. Accordingly, instant application is allowed. Order Date :- 21.8.2025 Md Faisal

4. Learned counsel for applicant has submitted that with respect to the dishonour of cheque bearing No.000011 dated 29.9.2018 of an amount of Rs.75,000/- a statutory demand notice came to be issued by the opposite party No.2 which followed by a complaint under Section 138 of N.I. Act and post conduction of trial the Court of Judicial Magistrate, Nawabganj, Bareilly on 16.1.2025 passed in Complaint Case No.25 of 2019 (Narendra Kumar Vs. Sagar) proceeded to convict the applicant under Section 138 of the N.I. Act for a simple imprisonment of six months and for a fine to the tune of Rs.1,17,501.88/- out of which Rs.1,13,501.88/- was to be accorded to the opposite party no.2 and Rs.4,000/- as fine to State.

5. Assailing the order of conviction applicant preferred Criminal Appeal No.299 of 2025 (Sagar Vs. State of U.P.) which came to be dismissed for want of non prosecution on 25.3.2025.

6. Learned counsel for applicant has submitted that now the parties have entered into compromise on 30.4.2025. A copy whereof is on record as Annexure - No.8 at page 41 onwards reference whereon has been made in Paragraph No.16 according to them the opposite party No.2 has received an amount of Rs.70,000/- and now nothing remains to be be further proceeded with and the conviction order to be set aside.

7. Mohammad Waseem, learned counsel for opposite party no.2 has invited the attention of the Court towards their affidavit filed on 28.7.2025 that now the compromise stands entered into between the parties and the amount has been received and nothing remains further and the proceedings be quashed.

8. Learned AGA accepted the arguments of learned counsel for the parties.

9. I have heard these submissions so made across at bar and perused the record carefully.

10. Apparently, with respect to the dishonour of cheque bearing No.000011 dated 29.9.2018 for an amount of Rs.75,000/- a statutory demand notice came to be issued followed by an order of conviction passed by the Judicial Magistrate, Nawabganj, Bareilly on 16.1.2025 in Complaint Case No.25 of 2019 sentencing the applicant for simple imprisonment of six months and fine of Rs.1,17,501.88/- out of which Rs.1,13,501.88/- which to be paid to the opposite party No.2 ad Rs.4,000/- to State. An appeal came to be preferred being Crl. Appeal No.299 of 2025 which came to be dismissed for want of non prosecution on 25.3.2025 and thereafter on 30.4.2025 the parties have entered into compromise. The details of the compromise are being quoted herein:- "समझझौततानतामता नररेन्द्र ककमतार पकत्र शश्री हश्रीरतालताल ननवतासश्री पकरतानता ब्ललॉक कचहरश्री ररोड , ननकट दकरतार्गा मनन्दर कस्बता व थतानता-नबतावरगंज, जजलता बररेलश्री, (मरो० नगं०-8077673570) ...................प्रथम पक व/मध्य सतारर पकत्र शश्री रगंरतारताम , ननवतासश्री गताम पईपकरता, डलॉ० रमपकरता, थतानता नबलतासपकर, जजलता रतामपकर। (मरो०नगं० 9756485769) ....................नद्वितश्रीय पक प्रथम पक व नद्वितश्रीय पक मम उक्त समझझौतता स्वरेच्छता सरे नबनता जरोर दबताव नकयता रयता जजसकरो ननम्न प्रकतार रवताहहों कक उपनस्थनत मम जलखता व हस्तताकररत नकयता रयता-

1. यह नक प्रथम पक नरे नदनतागंक 20.02.2019 करो नद्वितश्रीय पक करे नवरूद्ध एक पररवताद सगं० 25/2019, नररेन्द्र ककमतार बनताम सतारर, धतारता 138 एन०आई०एक्ट, थतानता नबतावरगंज जजलता बररेलश्री , मता० न्यतायतालय न्यतानयक मजजस्टटरेट, नबतावरगंज, जजलता बररेलश्री मम प्रस्तकत नकयता थता।

2. यह नक उक्त पररवताद मम मता० न्यतायतालय न्यतानयक मजजस्टटरेट, नबतावरगंज, बररेलश्री नरे नद्वितश्रीय पक करो दरोषश्री करतार दरेतरे हहए नदनतागंक 16.01.2025 करो धतारता 138 परताकताम्य जलखत अजधननयम करे तहत छह मताह (6 मताह) करे सताधतारण कतारतावतास एवगं रूपयता 1,17,501.88/- रू करे अथर्गादण्ड सरे दनण्डत नकयता थता।

3. यह नक नद्वितश्रीय पक द्वितारता मता० न्यतायतालय न्यतानयक मजजस्टटरेट, नबतावरगंज करे उक्त दण्डतादरेश नदनतागंक 16.01.2025 करे नवरूद्ध एक (अपश्रील) नक०नम० नगं० 299/2025 नदनतागंक 19.02.2025 करो सत्र न्यतायताधश्रीश, बररेलश्री करे न्यतायतालय मम यरोजजत कक थश्री।

4. यह नक उक्त अपश्रील नद्वितश्रीय पक करे अजधवक्तता कक घरोर लतापरवताहश्री करे कतारण फझौजदतारश्री अपश्रील परोषणश्रीयतता करे नबन्दक पर सकनवताई करे नदन नदनतागंक 25.03.2025 करो नद्वितश्रीय पक करे अजधवक्तता करे न्यतायतालय न पहहगंचनरे/अनकपनस्थनत करे कतारण उक्त फझौजदतारश्री अपश्रील करो मता० सत्र न्यतायताधश्रीश नरे अगंरश्रीकरण करे नबन्दक पर अपश्रीलताथर्थी कक अनकपनस्थनत मम नबनता रकण दरोष पर नवचतार नकयरे ननरस्त कर दश्री थश्री।

5. यह नक नद्वितश्रीय पक नरे उक्त दण्डतादरेश करे नवरूद्ध पकननः करोई अपश्रील नकसश्री भश्री न्यतायतालय मम प्रस्तकत नहहीं कक हह तथता अब प्रथम पक व नद्वितश्रीय पक मम ककछ भलरे व सम्भतान्त लरोरहों नरे बहठताकर सकलह करता दश्री हह तथता प्रथम पक नररेन्द्र ककमतार करो नद्वितश्रीय पक सतारर नरे रू 70,000/- (सत्तर हजतार रूपयरे) अपनरे खतातता सगं० 05261000013890 बबक पगंजताब एण्ड जसगंध बबक शताखता कतादरश्रीरगंज नबलतासपकर, आई०एफ०एस०सश्री० करोड PSIB0000526 सरे (UPI) करे मताध्यम सरे नदनतागंक 30.04.2025 करो प्रथम पक नररेन्द्र ककमतार करे भतारतश्रीय स्टरेट बबक शताखता नबतावरगंज करे खतातता सगं० 33209172946 आई०एफ०एस०सश्री० करोड SBIN0004716 मम टटतागंसफर कर नदयरे हब जरो नक प्रथम पक नररेरे्द्र ककमतार (पररवताद करे पररवतादश्री) करो प्रताप्त हरो रयरे हब जजसकक टटतागंजक्शन आई०डश्री०टश्री-2504301148015856339782 तथता यय०टश्री०आर० नगं० 422149850283 हह।

6. यह नक प्रथम पक नद्वितश्रीय पक सरे प्रताप्त रू 70,000/- (सत्तर हजतार रूपयरे) मम सन्तकष्ट हह तथता अपनता सम्पयणर्गा दतानयत्व/दतावता नद्वितश्रीय पक करे प्रनत समताप्त करतता हह तथता अब प्रथम पक कता करोश्री रूपयता /दतावता नद्वितश्रीय पक पर बताकक नहहीं हह तथता उक्त पररवताद/दरोष जसनद्ध करो उक्त समझझौतरेनतामम करे आधतार पर समताप्त करतानता चताहतता हह तथता अब प्रथम पक, नद्वितश्रीय पक पर करोश्री कतायर्गावताहश्री नहहीं चताहतता हह।

7. यह नक प्रथम पक करो नद्वितश्रीय पक सरे सम्पयणर्गा रूपयता प्रताप्त हरो चककता हह तथता परथम पक इस तथ्य करो भश्री प्रकट करतता हह नक उक्त समझझौतरे करे आधतार पर नद्वितश्रीय पक करे नवरूद्ध उक्त पररवताद कक समस्त न्यतानयक उपशनमत कक जतावरे तथता नद्वितश्रीय पक करे नवरूद्ध पररवताद सगं० 25/2019 मम पताररत दरोषजसनद्ध आदरेश करो समताप्त करतानता चताहतता हह।

8. यह नक उक्त समझझौतरेनतामता स्वरेच्छता सरे, नबनता जरोर दबताव, स्वच्छ मनस्तष्क सरे रवताहहों करे समक व उपनस्थनत मम जलखत नकयता रयता हह जजस पर प्रथम पक व नद्वितश्रीय पक व रवताह स्वरेच्छता सरे हस्तताकर कर रहरे हब। रवताह-1 चन्द्र ककमतार पकत्र शश्री मगंशता रताम जसगंह ननवतासश्री सरेक्टर-1 रतामरगंरता नरर कलॉलरोनश्री, बश्री०डश्री०ए० नबचपकरश्री, जजलता बररेलश्री। (मरो०नगं०-8773837443) रवताह-2 अशरोक ककमतार पकत्र रणरेश रताम, ननवतासश्री ककसकमनर सतामनरे एम०जरे०पश्री० ययननवजसर्गाटश्री, जजलता बररेलश्री। (मरो०नगं० 9720794359) सत्यतापन समझझौततानतामता कक मद सगं० 1 लरतायत 8 सत्य व सहश्री हह, प्रथम पक व नद्वितश्रीय उक्त समझझौतरेनतामम पर अपनरे-अपनरे हस्तताकर स्वरेच्छता सरे, नबनता जरोर दबताव और स्वस्थ नचत मनस्तष्क सरे मय रवताहहों करे हस्तताकर रवताहहों करे समक व सतामनरे कर रहरे हब ततानक सनद रहरे व वक्त जरूरत कताम आवरे। सत्यतापन व तस्दश्रीक आज नदनतागंक 30.04.2025 वमककताम बररेलश्री कचहरश्री, बररेलश्री मम नकयता रयता। सगंलग्नकनः- आधतार कताडर्गा प्रथम पक, नद्वितश्रीय पक व रवताहतान।"

11. A short affidavit is also available on record wherein paragraph Nos. 2 to 4 the following has been averred. Further in paragraph No.17 of the application the following has been averred:- "That as per the terms and conditions of the compromise dated 30.4.2025 mentioned in para No.5 that the opposite party No.2 has received money Rs.70,000/- in his account bearing No.05261000013890 of Punjab and Sindh Bank on the very same day i.e. 30.04.2025."

12. Once the parties have entered into compromise and according to them nothing remains to be further proceeded and the entire amounts stands deposited then the next question which would be whether in exercise of jurisdiction under Section 482 Cr.P.C./528 B.N.S.S. the Court can annul/conviction and appellate order or not.

13. The Hon. Apex Court in B.V. Seshaiah: B Vamsi Krishna Vs. State of Telangana & another 2023 LawSuit (SC) 83 had the occasion to consider the said aspect it has observed as under:-

7. It is also to be noted that as per the terms of the agreement, the Respondent No.2 was bound to file a compromise petition before the High Court, however he failed to do so. The lack of filing of such a compromise petition, as agreed upon by the Respondent No.2, has now led to the High Court dismissing the Revision and confirming the Conviction of the Appellants.

8. In our view, the terms and conditions of the settlement entered into by the parties binds them to settle the dispute amicably, or through an arbitration as has been stated in clause 8 of the Memorandum Of Understanding.

9. In such a circumstance, the Appellants cannot be convicted on the basis of the orders passed by the courts below, as the settlement is nothing but a compounding of the offence.

10. In the case of M/S Meters and Instruments Private Limited & Anr. Vs. Kanchan Mehta, 2018 1 SCC 560, this court held that the nature of offence under Section 138 of the N.I Act is primarily related to a civil wrong and has been specifically 1 2018 (1) SCC 560 made a compoundable offence. The relevant paragraph of the judgment has been extracted herein: "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."

11. This is a very clear case of the parties entering into an agreement and compounding the offence to save themselves from the process of litigation. When such a step has been taken by the parties, and the law very clearly allows them to do the same, the High Court then cannot override such compounding and impose its will.

12. It must also be noted that the Respondent No.2 was duty bound to file a compromise petition before the High Court, and by not doing the same has withdrawn key information from the High Court, which has led to an unwarranted confirmation of the Appellants' conviction.

13. We, therefore, allow these Appeals and set aside the order of conviction passed by the trial court. It is, however, kept open to the parties to settle their dispute as per the terms of the Memorandum Of Understanding.

14. Further, in Rishi Mohan Sirvastav Vs. State of U.P. & another U/S 482/378/407 No.516 of 2021 decided on 13.8.2021, the following was observed as under:-

27. In reference to offence under section 138 of N.I. Act read with section 147 of the said Act, the parties are at liberty to compound the matter at any stage even after the dismissal of the revision application. Even a convict undergoing imprisonment with the liability to pay the amount of fine imposed by the court and/or under an obligation to pay the amount of compensation if awarded, as per the scheme of N.I. Act, can compound the matter. The complainant i.e. person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this court under section 482 Cr.P.C. If the parties are asked to approach the Apex Court then, what will be situation, is a question which is required to be considered in the background of another accepted progressive and pragmatic principle accepted by our courts that if possible, the parties should be provided justice at the door step. The phrase "justice at the door step" has taken the court to think and reach to a conclusion that it can be considered and looked into as one of such special circumstances for the purpose of compounding the offence under section 147 of the N. I. Act.

29. Merely because the litigation has reached to a revisional stage or that even beyond that stage, the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage, the nature of offence punishable under Section 138 of the N.I. Act should be treated as if the same is falling under table-II of Section 320 IPC. I would like to reproduce some part of the statement of objects and reasons of the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002 : "The Negotiable Instrument Act 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instrument Act, 1981, namely Section 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques. Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act.

2. A large number of cases are reported to be pending under Sections 138 and 142 of the Negotiable Instruments Act in various courts in the country. Keeping in view the large number of complaints under the said Act, pending in various courts, a Working Group was constituted to review Section 138 of the Negotiable Instruments Act, 181 and make recommendations as to what changes were needed to effectively achieve the purpose of that Section.

3. .............

4. Keeping in view the recommendations of the Standing Committee on finance and other R/SCR.A/2491/2018 ORDER representations, it has been decided to bring out, inter alia the following amendments in the Negotiable Instrument Act 1881, namely. (i) xxxxxx (ii) xxxxxx (iii) xxxxxx (iv) to prescribe procedure for dispensing with preliminary evidence of the complainant. (v) xxxxxx (vi) xxxxx (vii) to make the offences under the Act compoundable. ........

5. xxxxxx

6. The Bill seeks to achieve the above objects.

31. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect.

32. So the intention of the legislature and object of enacting "Banking", Public Financial Institutions and the Negotiable Instrument Laws (Amended Act) 1988 and subsequent enactment, 1.e., Negotiable Instruments (Amendment & Miscellaneous Provisions Act 2002 leads this Court to a conclusion that the offence made punishable under Section 138 of N.I. Act is not only an offence qua property but it is also of the nature of an economic offence, though not covered in the list of statutes enacted in reference to Section 468 of Cr.P.C. Thus, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage even after the dismissal of the application.

33. In the instant case, the problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute, furthermore, the arguments on behalf of the opposite parties on the fact that unlike Section 320 Cr.P.C., Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court.

34. I am also conscious of the view that judicial endorsement of the above quoted guidelines as given in the case of Damodar S. Prabhu (supra) 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. I have already explained that the scheme contemplated under Section 320 of the Cr.P.C. cannot be followed in the strict sense.

35. In view of the aforesaid discussion, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage. The complainant i.e. the person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this Court under Section 482 Cr.P.C. read with Article 226 of the Constitution of India.

36. Generally, the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however considering the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to appellate court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties."

15. Further, in Ravindra Kumar Yadav Vs. State of U.P. & another decided on 27.5.2024 it was observed as under:- para 27, 28, 29, 45, 46, 47,48.

27. In the instant case, it is true that this Court had dismissed the criminal revision and upheld the conviction and sentence passed by the court below but it cannot be lost sight of the fact that this Court has the power to intervene in exercise of the powers vested under section 482 Cr.P.C. only with a view to do the substantial justice or to avoid miscarriage and the spirit of the compromise arrived at between the parties. This is perfectly justified and legal too.

28. I have considered the judgments cited by the learned counsel for the applicant as well as by the learned Counsel for the State and other decisions of the Hon'ble Apex Court and I do not think it necessary to enlist those decisions which are taken into consideration for the purpose of the present proceedings.

29. In the instant case, the applicant is invoking the inherent power as vested under section 482 Cr.P.C. after the dismissal of the revision petition under section 397 Cr.P.C. read with section 401 Cr.P.C. In this circumstances, I have to examine the maintainability of the present application under section 482 Cr.P.C. and also to examine as to whether for entertaining the aforesaid application, any special circumstances are made out or not. The gist of the ratio is reflected in the decision of the Hon'ble Apex Court in the case of Rajinder Prasad vs. Bashir and Others; AIR 2001 SC 3524. In that case, it was contended before the Apex Court that as per the earlier revision filed by the accused persons under section 397 of the Code has been rejected by the High Court vide order dated 13.05.1990, they had no right to file the application under section 482 Cr.P.C. with the prayer for quashing the same order. While dealing with the above contention, observed under:- Court Apex "We are of the opinion that no special circumstances were spelt out in the subsequent application for invoking the jurisdiction of the High Court under section 482 of the Code and the impugned order is liable to be set aside on this ground alone." So it can be legitimately argued and inferred and held that in all cases where the applicants are able to satisfy this court that there are special circumstances which can be clearly spelt out, subsequent application invoking inherent powers under section 482 Cr.P.C. can be moved and cannot be thrown away on the technical argument as to its sustainability.

45. In view of the aforesaid discussion, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage. The complainant i.e. the person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this Court under Section 482 Cr.P.C. read with article 226 of the Constitution of India.

46. Generally, the powers available under Section 482 of the Code would not have been exercised when a statutory remedy under the law is available, however, considering the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to appellate court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties.

47. As discussed above, the court is inclined to hold accordingly only because there is no formal embargo in Section 147 of the N.I. Act. This principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under Section 138 of the N.I. Act is distinctly different from the normal offences made punishable under Chapter XVII of IPC (i.e. the offences qua property).

48. In view of the observations and in view of the guidelines as laid down in the case of Damodar S. Prabhu (Supra) and also in view of the observations made in the judgment referred and taking into account the fact that the parties have settled the dispute amicably by way of compromise, this Court is of the view that the compounding of the offence as required to be permitted.

16. Accordingly, the present application under Section 528 B.N.S.S is allowed in terms of the compromise entered into between the parties through out of the Court on 30.4.2025. The judgment and order dated 16.01.2025 passed in Complaint Case No.25 of 2019 (Narendra Kumar Vs. Sagar) passed by Judicial Magistrate, Nawabganj, Bareilly, convicting the appellant under Section 138 of N.I. Act sentencing him for imprisonment of six months and directing for making of payment of Rs.1,17,501.88/- as compensation is hereby annulled and modified to the extent that applicant shall be treated acquitted on account of compounding offence with the complainant in pursuance of the compromise so entered into between them on 30.4.2025.

17. Learned Trial Court is directed that in case any amount stands deposited with the Trial Court which remains to be paid to the opposite party no.2/complainant by the applicant.

18. The parties are at liberty to file an appropriate application for relief of the same.

19. Accordingly, instant application is allowed. Order Date :- 21.8.2025 Md Faisal