Satbir Singh v. Hdfc Bank Ltd. and Anr

1o o o o 122o INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAoAToINoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANA ATo CHANDIGARHo o o SatbiroSinghoo ….Petitionero versuso o HDFCoBankoLtd.oandoanotheroo ….Respondentso o DateoofoDecision:oJanuaryo29,o2026o DateoofoUploading:oJanuaryo29,o2026o o CORAM:o HON'BLEoMR.oJUSTICEoSUMEEToGOELo o Present:-o Mr.oBhupinderoSingh,oAdvocateoforotheopetitioners.oo o o o Mr.oDheerajoGautam,oAdvocateofororespondentoNo.1.oo o o o Ms.oMahimaoYashpaloSingla,oSenioroDAGoHaryana.oo o *****o SUMEEToGOEL,oJ.o(ORAL)oo o o o Theopresentocriminalorevisionopetitionohasobeenofiledoimpugningo theo judgmento ando sentenceo datedo 10/11.07.2017o passedo byo learnedo Subo DivisionaloJudicialoMagistrate,oAssandh,oinoComplaintoNo.136/2014otitledoaso "HDFCoBankoLtd.oversusoSatbiroSingh",owherebyotheopetitionerohasobeeno convictedo ando sentencedo foro offenceo undero Sectiono 138o ofo Negotiableo InstrumentsoAct,o1881oandowasodirectedotoopayoaosumoofoRs.15,00,000/-,oaso compensationoandoinocaseoofodefault,otoofurtheroundergoosimpleoimprisonmento foro04omonths.oFurther,otheopetitionerohasochallengedotheoimpugnedojudgmento datedo01.10.2022opassedobyotheolearnedoAdditionaloSessionsoJudge,oKarnal,o

o o 2o o o ino Criminalo Appealo No.CRA-161/2020,o wherebyo appealo filedo byo theo petitionero againsto theo judgmento ando ordero datedo 10/11.07.2017o waso dismissed.oo

2.o o Learnedocounseloforotheopetitionerohasosubmittedothatoduringotheo pendencyoofoproceedings,otheopetitioneroandotheocomplainantohaveoenteredo intooaosettlement/agreementodatedo20.08.2025o(copyowhereofoappendedoaso AnnexureoP-Aowithotheopresentopetition).oLearnedocounseloforotheopetitionero haso furthero submittedo thato sinceo theo partieso haveo amicablyo settledo theiro dispute(s),otheomatteromayobeocompoundedoandotheopetitionerobeoacquitted.oo

3.o o LearnedocounseloappearingofororespondentoNo.1ohasoratifiedotheo factumoofosettlement/agreementohavingobeenoarrivedoatobetweenotheopartieso andohasofurtherovouchedotheogenuinenessoofotheocompromise/settlementodatedo

20.08.2025ostatedo too beo arrivedo betweeno theoparties.o Learnedo counseloforo respondentoNo.1ohasoalsoosubmittedothatoNOCohasoalsoobeenoissuedoinofavouro ofo theo petitioner.o Accordingly,o heo haso iteratedo thato respondento No.1-complainanto haso noo objection,o ino case,o theo offenceo iso permittedo too beo compoundedoandotheopetitioneroisoorderedotoobeoacquitted.oo

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

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

o o 3o o o 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 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

o o 4o o o 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

5.1.o o FurtherotheoHon'bleoSupremeoCourtoinoaojudgmentotitledoasoM/so NewoWinoExporto&Anr.ovs.oA.oSubramaniamo2024oINSCo535o:o2024(3)oLawoNewoWinoExporto&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 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

(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 o o

o o 5o o o

5.3.o o TheostatutoryoprovisionoofoSectiono359oofoBNSS,o2023o(Sectiono 320oofoCr.P.C.,o1973)oandoSectiono147oofoNegotiableoInstrumentsoAct,o1881o whenoexaminedoalongwithoSectiono528oofoBNSS,o2023oinotheoguidingolighto ofotheojudgmentsoofotheoHon'bleoSupremeoCourtoinocasesoofoDamodaroS.oDamodaroS.o Prabhuo(supra),oM/soNewoWinoExporto(supra)oandoSanjabijoTario(supra),oleadoPrabhuo M/soNewoWinoExporto SanjabijoTario 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 beoPrabhuo imposedowhenotheooffenceounderoSectiono138oofoNegotiableoInstrumentsoActo ofo1881oisocompoundedoatoaostageowhenosubstantialoproceedingsohaveoalreadyo beenoundertakenobyotheoCourtsosooasotoodissuadeotheounscrupulousolitiganto 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)ohaso revisitedotheoguidelines,oinsofaroasoitorelatesotootheoquantumoofoimpositionoofo costso upono theo accused,o buto haso noto modifiedo theo leewayo grantedo ino theo judgmentoofoDamodaroS.oPrabhuo(supra)owhichopermitsoreductionoorowaiveroDamodaroS.oPrabhuo

o o 6o o o 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 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

o o 7o o o 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 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

o o 8o o o discretionotooquashoaoconvictionowhereotheopartiesohaveoreachedoanoamicableo settlement,oprovidedothatosuchocompromiseoneitheroimpingeouponotheopublico interestonoroundermineotheocauseojustice,oasowelloasotheosubstantialojustice.oo

6.o o Revertingotootheofactsoofotheocaseoinohand,oitoisonotodisputedobyo theoconcernedorivalopartiesothatoanoamicableosettlementohasobeenoarrivedoato betweenothemo and,o therefore,o compoundingoofotheo offenceo andonecessaryo furthero directionso haveo beeno soughto fromo thiso Court.o Ao perusalo ofo theo settlement/agreemento datedo 20.08.2025o statedo too beo arrivedo betweeno theo partiesoreflectsothatotheopartiesohaveosoughtotooresolveotheirodispute(s)oinototoo andoburyotheohatchet.oConsequently,oinotheoconsideredoopinionoofothisoCourt,o theo factualo matrixo ofo theo caseo requireso thato theo offence(s)o oughto too beo permittedotoobeocompoundedoandotheopetitionerodeservesotoobeoacquitted.oo

6.1.o o Keepingo ino viewo theo entiretyo ofo theo attendingo facts/circumstancesoofotheocase;oespeciallyofactumoofotheopetitionerohavingo sufferedoincarcerationoforoabouto01omonthoafterohavingobeenoconvictedobyotheo SessionsoCourt,otheopetitionerohavingofacedotheowrathoofocriminalolitigationo sinceoaboutotheoyearo2022;othisoCourtodoesonotodeemoitoappropriateotoosaddleo theopetitionerowithocosts.ooo

7.o o Inoviewoofotheoprevenientoratiocination,oitoisoordainedothus:o

(i)o Theo impugnedo judgmento ando sentenceo datedo 10/11.07.2017o passedo byo learnedo Subo Divisionalo Judicialo Magistrate,o Assandh,o ino Complainto No.136/2014o titledo aso "HDFCoBankoLtd.oversusoSatbiroSingh",owherebyotheopetitionero hasobeenoconvictedoandosentencedoforooffenceounderoSectiono138o ofoNegotiableoInstrumentsoAct,o1881oandowasodirectedotoopayoao sumoofoRs.15,00,000/-,oasocompensationoandoinocaseoofodefault,o

o o 9o o o toofurtheroundergoosimpleoimprisonmentoforo04omonths,oandotheo impugnedo judgmento datedo 01.10.2022o passedo byo theo learnedo Additionalo Sessionso Judge,o Karnal,o ino Criminalo Appealo No.CRA-161/2020,o wherebyo appealo filedo byo theo petitionero againsto theo judgmento ando ordero datedo 10/11.07.2017o waso dismissed,oareoset-asideoandotheopetitioneroisoacquitted.oo o

(ii)o o Theorivalopartiesoshalloremainoboundobyotheotermso ofo theo settlement/agreemento datedo 20.08.2025o (Annexureo A)o enteredointoobetweenotheoparties.ooInocaseoofonon-complianceo thereof,otheoaggrievedopartyoshallobeoatolibertyotooseekorecalloofo thisoorder,oalbeitouponoshowingosufficientocause.oItoisoclarifiedo thatoinocaseonon-complianceoisofoundotoobeoshown,otheoerringo partyomayobeosaddledowithoexemplaryopunitiveomeasure(s).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 Januaryo29,o2026o mahavirooo o o Whetherospeaking/reasoned:o o Yes/Noo o Whetheroreportable:o o o Yes/Noo

o o