V.K. Singh and Anr v. Shree Nath Enterprises and Anr

1o o o o 126o INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAoATo CHANDIGARHo o o V.K.oSinghoandoanothero ….Petitionerso versuso o ShreeoNathoEnterprises,othroughoowneroofofirmoandoanotheroo ….Respondentso o DateoofoDecision:oAprilo21,o2026o DateoofoUploading:oAprilo21,o2026o o CORAM:o HON'BLEoMR.oJUSTICEoSUMEEToGOELo o Present:-o Mr.oAmitoParashar,oAdvocateoforotheopetitioner.ooPresent: o o o Mr.oAkashoMehra,oAdvocateoandoo o o Mr.oAjayoGhangas,oAdvocateofororespondentoNo.1.oo o o o Mr.oAdhirajoSinghoThind,oAAGoPunjab.o o *****o SUMEEToGOEL,oJ.o(ORAL)oo o o o Theopresentocriminalorevisionopetitionohasobeenofiledoseekingo settingo asideo ofo theo impugnedo ordero datedo 21.12.2017,o video which,o theo learnedoSessionsoJudge,oFaridabado(foroshorto'SessionsoJudge')ohasodismissedo theoappealopreferredobyotheopetitioner,oforowantoofoprosecution,oagainstotheo judgmento ofo conviction/o ordero ofo sentenceo datedo 09.11.2017/o 13.11.2017o passedo byo learnedo Judicialo Magistrateo Isto Class,o Faridabado (foro shorto 'JMIC'),owherebyotheopetitionerowasoconvictedoforocommissionoofooffenceo punishableounderoSectiono138oofoNegotiableoInstrumentsoAct,o1881oandowaso

o o 2o o o sentencedo too undergoo Rigorouso Imprisonmento foro 02o yearso ando too payo compensation,otootheocomplainant,otootheotuneoofoRs.20,60,002/-.oo

2.o o Learnedocounseloforotheopetitionerohasosubmittedothatoduringotheo pendencyoofoproceedings,otheopetitionerohasopaidotheocompleteoamountoofo fine/o compensationo too respondento No.1/o complainanto ando theo sameo iso decipheredo fromo theo ordero datedo 11.12.2024o passedo byo learnedo JMIC,o Faridabad,oandomatterohasonowobeenoamicablyosettledobetweenotheopetitionero andorespondentoNo.1/ocomplainant.oLearnedocounselohasofurtherosubmittedo thato ano applicationo (CRM-17069-2025)o haso alsoo beeno filedo seekingo permissiono too compoundo theo offenceo ino questiono ando too seto asideo theo impugnedo judgmento ofo conviction/o ordero ofo sentenceo datedo 09.11.2017/o

13.11.2017o passedo byo learnedo JMIC,o aso alsoo theo impugnedo ordero datedo

21.12.2017o passedo byo learnedo Sessionso Judge.o Learnedo counselo foro theo petitionerohasofurtherosubmittedothatosinceotheopartiesohaveoamicablyosettledo theiro dispute(s),o theo mattero mayo beo compoundedo ando theo petitionero beo acquittedoofotheocharge(s)oframedoagainstohim.oo

3.o o LearnedocounseloappearingofororespondentoNo.1ohasoratifiedotheo factumo ofo mattero havingo beeno settledo betweeno theo partieso ando haso dulyo receivedo theo entireo amounto ino question,o aso statedo ino theo ordero datedo

11.12.2024o passedo byo theo learnedo JMIC,o Faridabad.o Accordingly,o heo haso iteratedo thato respondento No.1-complainanto haso noo objection,o ino case,o theo offenceoisopermittedotoobeocompoundedoandotheopetitioneroisoorderedotoobeo acquitted.oo

4.o o Io haveo heardo learnedo counselo foro theo rivalo partieso ando haveo perusedotheoavailableorecord.oo

o o 3o o o

5.o o Itowouldobeoappositeotooreferohereinotooaojudgmentopassedobyo threeo Judgeo Bencho ofo theo Hon'bleo Supremeo Courto titledo aso Damodaro S.o Prabhuovs.oSayedoBabalaloH.,oAIRo2010(SC)o1907,orelevantowhereoforeadso thus:o "15.oWithoregardotootheoprogressionoofolitigationoinochequeobouncingocases,o theolearnedoAttorneyoGeneralohasourgedothisoCourtotooframeoguidelinesoforo ao gradedo schemeo ofo imposingo costso ono partieso whoo undulyo delayo compoundingo ofo theo offence.o Ito waso submittedo thato theo requiremento ofo depositoofotheocostsowilloactoasoaodeterrentoforodelayedocomposition,osinceoato present,ofreeoandoeasyocompoundingoofooffencesoatoanyostage,ohowevero belated,ogivesoanoincentiveotootheodraweroofotheochequeotoodelayosettlingotheo casesoforoyears.oAnoapplicationoforocompoundingomadeoafteroseveraloyearso notoonlyoresultsoinotheosystemobeingoburdenedobutotheocomplainantoisoalsoo deprivedoofoeffectiveojustice.oInoviewoofothisosubmission,oweodirectothatotheo followingoguidelinesobeofollowed:-o o THEoGUIDELINESo o (i)oInotheocircumstances,oitoisoproposedoasofollows:o

(a)o Thato directionso cano beo giveno thato theo Writo ofo Summonso beo suitablyo modifiedo makingo ito clearo too theo accusedo thato heo couldo makeoanoapplicationoforocompoundingoofotheooffencesoatotheofirstooro secondohearingoofotheocaseoandothatoifosuchoanoapplicationoisomade,o compoundingomayobeoallowedobyotheocourtowithoutoimposingoanyo costsoonotheoaccused.o

(b)oIfotheoaccusedodoesonotomakeoanoapplicationoforocompoundingo aso aforesaid,o theno ifo ano applicationo foro compoundingo iso madeo beforeotheoMagistrateoatoaosubsequentostage,ocompoundingocanobeo allowedosubjectotootheoconditionothatotheoaccusedowillobeorequiredo toopayo10%oofotheochequeoamountotoobeodepositedoasoaoconditionoforo compoundingowithotheoLegaloServicesoAuthority,oorosuchoauthorityo asotheoCourtodeemsofit.o

(c)oSimilarly,oifotheoapplicationoforocompoundingoisomadeobeforeo theoSessionsoCourtooroaoHighoCourtoinorevisionooroappeal,osucho compoundingomayobeoallowedoonotheoconditionothatotheoaccusedo payso15%oofotheochequeoamountobyowayoofocosts.o

(d)oFinally,oifotheoapplicationoforocompoundingoisomadeobeforeotheo SupremeoCourt,otheofigureowouldoincreaseotoo20%oofotheochequeo amount.o o Letoitoalsoobeoclarifiedothatoanyocostsoimposedoinoaccordanceowitho theseoguidelinesoshouldobeodepositedowithotheoLegaloServicesoAuthorityo operatingoatotheoleveloofotheoCourtobeforeowhichocompoundingotakesoplace.o Foroinstance,oinocaseoofocompoundingoduringotheopendencyoofoproceedingso beforeoaoMagistrate'soCourtooroaoCourtoofoSessions,osuchocostsoshouldobeo depositedo witho theo Districto Legalo Serviceso Authority.o Likewise,o costso imposedoinoconnectionowithocompositionobeforeotheoHighoCourtoshouldobeo depositedowithotheoStateoLegaloServicesoAuthorityoandothoseoimposedoino connectiono witho compositiono beforeo theo Supremeo Courto shouldo beo depositedowithotheoNationaloLegaloServicesoAuthority.o o xxxo o xxxo o xxxo o xxxo o 17.oo Weo areo alsoo consciouso ofo theo viewo thato theo judicialo endorsementoofotheoaboveoquotedoguidelinesocouldobeoseenoasoanoactoofo

o o 4o o o judicialolaw-makingoandothereforeoanointrusionointootheolegislativeodomain.o ItomustobeokeptoinomindothatoSectiono147oofotheoActodoesonotocarryoanyo guidanceoonohowotooproceedowithotheocompoundingoofooffencesounderotheo Act.o Weo haveo alreadyo explainedo thato theo schemeo contemplatedo underoSectiono320oofotheoCrPCocannotobeofollowedoinotheostrictosense.oIno viewoofotheolegislativeovacuum,oweoseeonoohurdleotootheoendorsementoofo someosuggestionsowhichohaveobeenodesignedotoodiscourageolitigantsofromo undulyodelayingotheocompositionoofotheooffenceoinocasesoinvolvingoSectiono 138oofo theo Act.o Theo gradedo schemeo foro imposingo costso iso ao meanso too encourageocompoundingoatoanoearlyostageoofolitigation.oInotheostatusoquo,o valuableotimeoofotheoCourtoisospentoonotheotrialoofotheseocasesoandotheo partieso areo noto liableo too payo anyo Courto feeo sinceo theo proceedingso areo governedobyotheoCodeoofoCriminaloProcedure,oevenothoughotheoimpactoofo theo offenceo iso largelyo confinedo too theo privateo parties.o Eveno thougho theo impositionoofocostsobyotheocompetentocourtoisoaomatteroofodiscretion,otheo scaleo ofo costso haso beeno suggestedo ino theo interesto ofo uniformity.o Theo competentoCourtocanoofocourseoreduceotheocostsowithoregardotootheospecifico factsoandocircumstancesoofoaocase,owhileorecordingoreasonsoinowritingoforo suchovariance.oBonaofideolitigantsoshouldoofocourseocontestotheoproceedingso tootheirologicaloend.oEvenoinotheopast,othisoCourtohasousedoitsopowerotoodoo completeojusticeounderoArticleo142oofotheoConstitutionotooframeoguidelineso inorelationotoosubject-matterowhereothereowasoaolegislativeovacuum."o o

5.1.o o FurtherotheoHon'bleoSupremeoCourtoinoaojudgmentotitledoasoM/so NewoWinoExporto&Anr.ovs.oA.oSubramaniamo2024oINSCo535o:o2024(3)oLawo Heraldo(SC)o2098,orelevantowhereoforeadsoasounder:o "6.oo Ato thiso juncture,o weo wouldo alsoo likeo too reiterateo ao fewo wordso regardingotheoprinciplesoofocompoundingoofooffencesoinotheocontextoofoNIo Act.o Ito iso too beo rememberedo thato dishonouro ofo chequeso iso ao regulatoryo offenceowhichowasomadeoanooffenceoonlyoinoviewoofopublicointerestosoothato theo reliabilityo ofo theseo instrumentso cano beo ensured.o Ao largeo numbero ofo casesoinvolvingodishonouroofochequesoareopendingobeforeocourtsowhichoisoao seriouso concerno foro ouro judicialo system.o Keepingo ino mindo thato theo 'compensatoryoaspect'ooforemedyoshallohaveopriorityooverotheo'punitiveo aspect',ocourtsoshouldoencourageocompoundingoofooffencesounderotheoNIo Actoifo partieso areo willingo too doo so.o (See:oDamodaro S.o Prabhuo v.o Sayedo BabalaloH.o(2010)o5oSCCo663o(Parao18),oGimpexoPrivateoLimitedov.oManojo Goelo(2022)o 11o SCCo 705o (Parao 29),o Meterso Ando Instrumentso PrivateoGoel 2022)o 11o SCCo 705o ,o Meterso Ando Instrumentso Privateo LimitedoAndoAnr.ov.oKanchanoMehtao(2018)o1oSCCo560(Parao18.2)"o o

5.2.o o Moreorecently,otheoHon'bleoSupremeoCourtoinoaojudgmentotiledo asoSanjabijoTariovs.oKishoreoS.oBorcaroandoanothero=o2025oINSCo1158,ohaso heldoasounder:o "38.oSinceoaoveryolargeonumberoofochequeobouncingocasesoareostillopendingo andointerestoratesohaveofallenoinotheolastofewoyears,othisoCourtoisoofotheoviewo thato ito iso timeo too 'revisito ando tweako theo guidelines'.o Accordingly,o theo aforesaidoguidelinesoofocompoundingoareomodifiedoasounder:-o

o o 5o o o

(a)oIfotheoaccusedopaysotheochequeoamountobeforeorecordingoofohisoevidenceo (namelyodefenceoevidence),othenotheoTrialoCourtomayoallowocompoundingo ofotheooffenceowithoutoimposingoanyocostooropenaltyoonotheoaccused.o

(b)o Ifo theo accusedo makeso theo paymento ofo theo chequeo amounto posto theo recordingoofohisoevidenceobutopriorotootheopronouncementoofojudgmentobyo theoTrialoCourt,otheoMagistrateomayoallowocompoundingoofotheooffenceoono paymentoofoadditionalo5%oofotheochequeoamountowithotheoLegaloServiceso AuthorityoorosuchootheroAuthorityoasotheoCourtodeemsofit.o

(c)o Similarly,o ifo theo paymento ofo chequeo amounto iso madeo beforeo theo SessionsoCourtooroaoHighoCourtoinoRevisionooroAppeal,osuchoCourtomayo compoundotheooffenceoonotheoconditionothatotheoaccusedopayso7.5%oofotheo chequeoamountobyowayoofocosts.o

(d)oFinally,oifotheochequeoamountoisotenderedobeforeothisoCourt,otheofigureo wouldoincreaseotoo10%oofotheochequeoamount."o o

5.3.o o TheostatutoryoprovisionoofoSectiono359oofoBNSS,o2023o(Sectiono 320oofoCr.P.C.,o1973)oandoSectiono147oofoNegotiableoInstrumentsoAct,o1881o whenoexaminedoalongwithoSectiono528oofoBNSS,o2023oinotheoguidingolighto ofotheojudgmentsoofotheoHon'bleoSupremeoCourtoinocasesoofoDamodaroS.o Prabhuo(supra),oM/soNewoWinoExporto(supra)oandoSanjabijoTario(supra),oleado too theo unequivocalo conclusiono thato theo offenceo undero Sectiono 138o ofo Negotiableo Instrumentso Act,o 1881o cano beo compoundedo ato allo stageso ofo litigation,oincludingowhenotheomatterohasoreachedotheoHighoCourtoafterohavingo beenoconclusivelyodealtowithobyotheoMagisterialoasoalsootheoSessionsoCourt.oo Inootherowords,osuchoanooffenceocanobeocompromised/compoundedoevenoaftero theopetitioner-accusedohasobeenoconvictedobyotheoCourtoofolearnedoMagistrateo andohisoappealoagainstotheosameohasobeenodismissedobyotheolearnedoSessionso Court.ooo

5.4.o o TheoHon'bleoSupremeoCourtoinotheojudgmentoofoDamodaroS.o Prabhuo (supra)o haso alsoo enunciatedo that,o ordinarily,o costso oughto too beo imposedowhenotheooffenceounderoSectiono138oofoNegotiableoInstrumentsoActo ofo1881oisocompoundedoatoaostageowhenosubstantialoproceedingsohaveoalreadyo beenoundertakenobyotheoCourtsosooasotoodissuadeotheounscrupulousolitiganto

o o 6o o o fromo undulyo delayingo theo compoundingo ofo sucho offences.o However,o discretiono haso beeno reservedo ino favouro ofo theo concernedo Courto too reduce/waiveo sucho costs,o ino caseo facts/circumstanceso ofo ao giveno caseo soo warrant.oTheoHon'bleoSupremeoCourtoinocaseoofoSanjabijoTario(supra)ohasoSanjabijoTari revisitedotheoguidelines,oinsofaroasoitorelatesotootheoquantumoofoimpositionoofo costso upono theo accused,o buto haso noto modifiedo theo leewayo grantedo ino theo judgmentoofoDamodaroS.oPrabhuo(supra)owhichopermitsoreductionoorowaivero ofocostsobasedoonotheofactualomilieuoofoaoparticularocaseoalbeitosubjectotootheo recordingooforeasonsoforosuchovariance.oForotheosakeoofoclarityoitoisoreiteratedo thatolibertyoreservedoinofavouroofotheocourtsotoowaiveotheoimpositionoofocostso mayobeoexercisedobyoanyoofotheocourtsoseizedoofotheomatter―beoitotheoHigho Court,otheoSessionsoCourtoorotheomagisterialoCourtoconductingotrial.oItois,o however,oimperativeotoobearoinomindothatodiscretionotoowaiveotheoimpositiono ofocostsoisonototoobeoinvokedoasoaomatteroofoordinaryocourse.oTheoexerciseoofo sucho discretiono musto beo predicatedo upono exceptional,o compellingo ando accentuatingo circumstanceso which,o ino theo consideredo opiniono ofo theo concernedoCourtoseizedoofotheomatter,owarrantodeviationofromotheogeneralo ruleoofoimpositionoofocost.oTheoCourt,owhileoinvokingosuchodiscretion,omusto recordoclear,ocogentoandoreasonedofindingsodelineatingotheospecialofactorsothato justifyotheowaiver.oThisorequirementoisoinoconsonanceowithotheolegislativeo intento ando theo underlyingo purposeo soughto too beo achievedo byo theo criminalizationoofotheoactoofodishonoroofocheque,oi.e.otooinculcateofinancialo disciplineoandoupholdotheocredibilityoandosanctityoofonegotiableoinstruments.oo

5.5.o o Stillofurther,otheoinherentojurisdictionoofotheoHighoCourtoundero Sectiono528oBNSS,o2023oisoprimarilyoaimedoatopreventingoabuseoofojudicialo

o o 7o o o processo ando securingo theo endso ofo justice.o Thus,o whereo theo disputeo iso essentiallyopersonaloinonatureoandoaogenuineocompromiseohasobeenoreached,o theo Higho Courto mayo interveneo too quasho theo conviction,o recognizingo thato continuedo proceedingso wouldo beo non-productiveo ando unjusto ino theo giveno circumstances.oTheoinherentopowersoofoaoHighoCourtoareoincidentalorepleteo powers,oinotheoabsenceoofowhich,otheoCourtowouldobeoobligedotoositostilloando helplesslyo witnesso theo processo ofo lawo beingo abusedo foro theo purposeso ofo injustice.o Ino othero words;o sucho power(s)o iso intrinsico too theo Higho Court,o formingoitsoveryolife-blood,oitsoveryoessence,oitsoimmanentoattribute.oWithouto suchopower(s),oaoHighoCourtowouldoretainoformobutolackosubstance.oTheseo powerso ofo ao Higho Courto henceo deserveo too beo construedo witho theo widesto possibleoamplitude.oTheseoinherentopowersoareoinoconsonanceowithotheonatureo ofo ao Higho Courto whichooughto toobe,oando hasoino facto been,o investedo witho power(s)otoomaintainoitsoauthorityotoopreventotheoprocessoofolaw/Courtsofromo beingoobstructedooroabused.oItoisoaotriteopositoofojurisprudenceothatothougho lawsoattemptotoodealowithoallocasesothatomayoarise,otheoinfiniteovarietyoofo circumstancesowhichoshapeoeventsoandotheoimperfectionsoofolanguageomakeoito impossibleotoolayodownoprovisionsocapableoofogoverningoeveryocase,owhichoino factoarises.oAoHighoCourtowhichoexistsoforotheofurtheranceoofojusticeoinoano indefatigableo manner,o shouldo therefore,o haveo unfetteredo power(s)o too dealo withosituationsowhich,othoughonotoexpresslyoprovidedoforobyotheolaw,oneedotoo beodealtowith,otoopreventoinjusticeoorotheoabuseoofotheoprocessoofolawoando Courts.oTheojuridicalobasisoofotheseoplenaryopower(s)oisotheoauthority;oinofacto theoseminalodutyoandoresponsibilityoofoaoHighoCourt;otoouphold,otooprotecto andotoofulfillotheojudicialofunctionoofoadministeringojustice,oinoaccordanceo

o o 8o o o witholaw,oinoaoregular,oorderlyoandoeffectiveomanner.oInootherowords;oSectiono 528oofoBNSS,o2023oreflectsopeerlessoandoinherentopowers,oofoaoHighoCourto whicho mayo beo invokedo whenevero ito iso justo ando equitableo too doo so,o ino particularotooensureotheoobservanceoofotheodueoprocessoofolaw,otooprevento vexationo oro oppression,o too doo justiceo nayo substantialo justiceo betweeno theo partiesoandotoosecureotheoendsoofojustice.oTherefore,otheoHighoCourt,oinotheo exerciseo ofo itso inherento powero undero sectiono 528o BNSS,o 2023o haso theo discretionotooquashoaoconvictionowhereotheopartiesohaveoreachedoanoamicableo settlement,oprovidedothatosuchocompromiseoneitheroimpingeouponotheopublico interestonoroundermineotheocauseojustice,oasowelloasotheosubstantialojustice.oo

6.o o Revertingotootheofactsoofotheocaseoinohand,oitoisonotodisputedobyo theoconcernedorivalopartiesothatoanoamicableosettlementohasobeenoarrivedoato betweenothemo and,o therefore,o compoundingoofotheo offenceo andonecessaryo furtherodirectionsohaveobeenosoughtofromothisoCourt.oAoperusaloofotheoordero datedo 11.12.2024o passedo byo theo learnedo JMIC,o Faridabado showso thato respondentoNo.1/ocomplainantohasoreceivedofulloandofinalopaymentofromotheo petitioner,oand,othus,otheopartiesohaveosoughtotooresolveotheirodispute(s)oino totooandoburyotheohatchet.oConsequently,oinotheoconsideredoopinionoofothiso Court,otheofactualomatrixoofotheocaseorequiresothatotheooffence(s)ooughtotoobeo permittedotoobeocompoundedoandotheopetitionerodeservesotoobeoacquitted.oo

6.1.o o Keepingo ino viewo theo entiretyo ofo theo attendingo facts/o circumstancesoofotheocase,otheopetitionerohavingofacedotheowrathoofocriminalo litigationosinceoaboutotheoyearo2011;othisoCourtodoesonotodeemoitoappropriateo toosaddleotheopetitionerowithocosts.oo

7.o o Inoviewoofotheoprevenientoratiocination,oitoisoordainedothus:o

o o 9o o o

(i)o Theoimpugnedojudgmentoofoconviction/oorderoofosentenceo datedo09.11.2017/o13.11.2017opassedobyolearnedoJMIC,oasoalsoo theo impugnedo ordero datedo 21.12.2017o passedo byo learnedo SessionsoJudge,oareoset-asideoandotheopetitioneroisoacquitted.oo o

(ii)o Disposedoof,oaccordingly.oo o

(iii)oo Nooorderoasotoocosts.oo o

(iv)oo Pendingoapplication(s),oifoany,oshalloalsoostandsodisposedo of.oo o o o o o o o o o o o o o o ooo o oooooooo(SUMEEToGOEL)o o o o o ooooooJUDGEo Aprilo21,o2026oo mahavirooo o Whetherospeaking/reasoned:o o Yes/Noo Whetheroreportable:o o o Yes/Noo

o o