M/S Phosphate India Pvt Ltd and Another v. Paramjit Kaur and Others

INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAoATo CHANDIGARHo o o o 149o o o o o o CRRoNos.3187,o3191oo o o o o o o &o3196oofo2025o(O&M)o o o o o o o Dateoofodecision:o19.12.2025o o o o o o o Dateoofouploading:o19.12.2025o o M/soPhosphateoIndiaoPrivateoLimitedoandoanotheroooo o o o o o o o o o o ....Petitionerso V/so ParamjitoKauroandootherso o o o o o o o o o ....Respondentso o CORAM:oo HON'BLEoMR.oJUSTICEoSUMEEToGOELo Present:oo Mr.oVipuloJoshi,oAdvocateoforotheopetitioner(s).o o o Mr.oAbhishekoSanghi,oAdvocateofororespondentoNos.1o&o2.o o Mr.oAdhirajoSingh,oAAG,oPunjabo fororespondentoNo.3.o o o o o o o o o *****o SUMEEToGOEL,oJ.o(Oral)o

1.o o Byothisocommonoorder,otheoaforesaidothreeorevisionopetitionsoi.e.o CRRoNos.3187,o3191o&o3196oofo2025,oareobeingodisposedooffotogether,oaso theosameoinvolveocommonalityoofofactsoandoissue(s).o o o Forotheosakeoofoconvenience,otheofactsoareobeingodrawnooutofromo CRR-3187-2025o(titledoasoPhosphateoIndiaoPrivateoLimitedoandoanothero Vs.oParamjitoKauroandoothers).o

2.o o Theo presento criminalo revisiono petitionso haveo beeno filedo impugningotheojudgmentodatedo19.11.2025opassedobyotheolearnedoAdditionalo Sessionso Judge,o Rupnagaro &o theo judgmento ando ordero ofo sentenceo datedo st28.02.2020opassedobyoJudicialoMagistrateo1 oClass,oRupnagarowherebyotheo petitioneroNo.2onamelyoAkashoGoyalohasobeenoconvictedoandosentencedoforo offenceounderoSectiono138oofoNegotiableoInstrumentsoAct,o1881.ooNAVEEN NAGPAL CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o2o o

3.o o Learnedocounseloforotheopetitionersohasosubmittedothatoduringo theopendencyoofoproceedings,otheopetitioneroNo.2oandotheocomplainantohaveo enteredo intoo ao settlement/compromiseo datedo 08.12.2025o (Annexureo P-1).o Learnedo counselo foro theo petitionerso haso furthero submittedo thato sinceo theo partieso haveo amicablyo settledo theiro dispute(s),o theo mattero mayo beo compoundedoandotheopetitioneroNo.2obeoacquitted.ooo

4.o o LearnedocounseloappearingoforotheorespondentoNos.1o&o2ohaso ratifiedo theo factumo ofo compromise/settlemento havingo beeno arrivedo ato betweeno theo partieso ando haso furthero vouchedo theo genuinenesso ofo theo compromise/settlementodatedo08.12.2025ostatedotoobeoarrivedobetweenotheo parties.oAccordingly,oheohasoiteratedothatotheorespondent-complainantohasonoo objectiono ino caseo theo offenceo iso permittedo too beo compoundedo ando theo petitioneroNo.2oisoorderedotoobeoacquitted.oo

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

6.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 o "15.o Witho regardo too theo progressiono ofo litigationo ino chequeo bouncingo cases,o theo learnedo Attorneyo Generalo haso urgedo thiso Courto too frameo guidelinesoforoaogradedoschemeoofoimposingocostsoonopartiesowhooundulyo delayocompoundingoofotheooffence.oItowasosubmittedothatotheorequiremento ofodepositoofotheocostsowilloactoasoaodeterrentoforodelayedocomposition,o sinceoatopresent,ofreeoandoeasyocompoundingoofooffencesoatoanyostage,o howeverobelated,ogivesoanoincentiveotootheodraweroofotheochequeotoodelayo settlingotheocasesoforoyears.oAnoapplicationoforocompoundingomadeoaftero severalo yearso noto onlyo resultso ino theo systemo beingo burdenedo buto theo complainanto iso alsoo deprivedo ofo effectiveo justice.o Ino viewo ofo thiso submission,oweodirectothatotheofollowingoguidelinesobeofollowed:-o I attest to the accuracy ando (i)oInotheocircumstances,oitoisoproposedoasofollows:o CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o3o o 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 o (b)oIfotheoaccusedodoesonotomakeoanoapplicationoforocompoundingo aso aforesaid,o theno ifo ano applicationo foro compoundingo iso madeo beforeotheoMagistrateoatoaosubsequentostage,ocompoundingocanobeo allowedosubjectotootheoconditionothatotheoaccusedowillobeorequiredo toopayo10%oofotheochequeoamountotoobeodepositedoasoaoconditiono foro compoundingo witho theo Legalo Serviceso Authority,o oro sucho authorityoasotheoCourtodeemsofit.o o (c)oSimilarly,oifotheoapplicationoforocompoundingoisomadeobeforeo theoSessionsoCourtooroaoHighoCourtoinorevisionooroappeal,osucho compoundingomayobeoallowedoonotheoconditionothatotheoaccusedo payso15%oofotheochequeoamountobyowayoofocosts.o o (d)oFinally,oifotheoapplicationoforocompoundingoisomadeobeforeotheo SupremeoCourt,otheofigureowouldoincreaseotoo20%oofotheochequeo amount.o o Letoitoalsoobeoclarifiedothatoanyocostsoimposedoinoaccordanceowithotheseo guidelineso shouldo beo depositedo witho theo Legalo Serviceso Authorityo 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 o xxxo o o xxxo o o xxxo o xxxo o o xxxo o o xxxo o o xxxo o 17.oo Weoareoalsooconsciousoofotheoviewothatotheojudicialoendorsementoofo theo aboveo quotedo guidelineso couldo beo seeno asoano acto ofo judicialo law-makingoandothereforeoanointrusionointootheolegislativeodomain.oItomustobeo keptoinomindothatoSectiono147oofotheoActodoesonotocarryoanyoguidanceoono howotooproceedowithotheocompoundingoofooffencesounderotheoAct.oWeohaveo alreadyoexplainedothatotheoschemeocontemplatedounderoSectiono320oofotheo CrPCocannotobeofollowedoinotheostrictosense.oInoviewoofotheolegislativeo vacuum,oweoseeonoohurdleotootheoendorsementoofosomeosuggestionsowhicho haveo beeno designedo too discourageo litigantso fromo undulyo delayingo theo 2025.12.19 17:38 compositionoofotheooffenceoinocasesoinvolvingoSectiono138oofotheoAct.oTheo CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o4o o gradedoschemeoforoimposingocostsoisoaomeansotooencourageocompoundingo atoanoearlyostageoofolitigation.oInotheostatusoquo,ovaluableotimeoofotheoCourto isospentoonotheotrialoofotheseocasesoandotheopartiesoareonotoliableotoopayoanyo CourtofeeosinceotheoproceedingsoareogovernedobyotheoCodeoofoCriminalo Procedure,oevenothoughotheoimpactoofotheooffenceoisolargelyoconfinedotoo theoprivateoparties.oEvenothoughotheoimpositionoofocostsobyotheocompetento courtoisoaomatteroofodiscretion,otheoscaleoofocostsohasobeenosuggestedoinotheo interestoofouniformity.oTheocompetentoCourtocanoofocourseoreduceotheocostso witho regardo tootheo specifico factso ando circumstanceso ofo ao case,o whileo recordingoreasonsoinowritingoforosuchovariance.oBonaofideolitigantsoshouldo ofocourseocontestotheoproceedingsotootheirologicaloend.oEvenoinotheopast,o thisoCourtohasousedoitsopowerotoodoocompleteojusticeounderoArticleo142oofo theoConstitutionotooframeoguidelinesoinorelationotoosubject-matterowhereo thereowasoaolegislativeovacuum."o

6.1.o o FurtherotheoHon'bleoSupremeoCourtoinoaojudgmentotitledoasoM/so NewoWinoExporto&Anr.ovs.oA.oSubramaniamo2024oINSCo535o:o2024(3)o LawoHeraldo(SC)o2098,orelevantowhereoforeadsoasounder:o o "6.oo Ato thiso juncture,o weo wouldo alsoo likeo too reiterateo ao fewo wordso regardingotheoprinciplesoofocompoundingoofooffencesoinotheocontextoofoNIo Act.oItoisotoobeorememberedothatodishonouroofochequesoisoaoregulatoryo offenceowhichowasomadeoanooffenceoonlyoinoviewoofopublicointerestosoothato theoreliabilityoofotheseoinstrumentsocanobeoensured.oAolargeonumberoofo casesoinvolvingodishonouroofochequesoareopendingobeforeocourtsowhichoiso ao seriouso concerno foro ouro judicialo system.o Keepingo ino mindo thato theo 'compensatoryoaspect'ooforemedyoshallohaveopriorityooverotheo'punitiveo aspect',ocourtsoshouldoencourageocompoundingoofooffencesounderotheoNIo Actoifopartiesoareowillingotoodooso.o(See:oDamodaroS.oPrabhuov.oSayedo Babalalo H.o(2010)o 5o SCCo 663o (Parao 18),o Gimpexo Privateo Limitedo v.o Manojo Goelo(2022)o 11o SCCo 705o (Parao 29),o Meterso Ando Instrumentso PrivateoLimitedoAndoAnr.ov.oKanchanoMehtao(2018)o1oSCCo560(Parao

18.2)"o

6.2.o o Moreorecently,otheoHon'bleoSupremeoCourtoinoaojudgmentotiledo asoSanjabijoTariovs.oKishoreoS.oBorcaroandoanothero?o2025oINSCo1158,ohaso heldoasounder:o o "38.o Sinceo ao veryo largeo numbero ofo chequeo bouncingo caseso areo stillo pendingoandointerestoratesohaveofallenoinotheolastofewoyears,othisoCourtoiso ofo theo viewo thato ito iso timeo too 'revisito ando tweako theo guidelines'.o CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o5o o Accordingly,otheoaforesaidoguidelinesoofocompoundingoareomodifiedoaso under:-o o (a)o Ifo theo accusedo payso theo chequeo amounto beforeo recordingo ofo hiso evidenceo (namelyo defenceo evidence),o theno theo Trialo Courto mayo allowo compoundingoofotheooffenceowithoutoimposingoanyocostooropenaltyoonotheo accused.o o (b)o Ifo theo accusedo makeso theo paymento ofo theo chequeo amounto posto theo recordingoofohisoevidenceobutopriorotootheopronouncementoofojudgmentobyo theoTrialoCourt,otheoMagistrateomayoallowocompoundingoofotheooffenceoono paymentoofoadditionalo5%oofotheochequeoamountowithotheoLegaloServiceso AuthorityoorosuchootheroAuthorityoasotheoCourtodeemsofit.o o (c)oSimilarly,oifotheopaymentoofochequeoamountoisomadeobeforeotheoSessionso CourtooroaoHighoCourtoinoRevisionooroAppeal,osuchoCourtomayocompoundo theooffenceoonotheoconditionothatotheoaccusedopayso7.5%oofotheochequeo amountobyowayoofocosts.o o (d)oFinally,oifotheochequeoamountoisotenderedobeforeothisoCourt,otheofigureo wouldoincreaseotoo10%oofotheochequeoamount."o o o

6.3.o o TheostatutoryoprovisionoofoSectiono359oofoBNSS,o2023o(Sectiono 320oofoCr.P.C.,o1973)oandoSectiono147oofoNegotiableoInstrumentsoAct,o1881o whenoexaminedoalongwithoSectiono528oofoBNSS,o2023oinotheoguidingolighto ofotheojudgmentsoofotheoHon'bleoSupremeoCourtoinocasesoofoDamodaroS.o Prabhuo(supra),M/soNewoWinoExporto(supra)oandoSanjabijoTario(supra),o leadotootheounequivocaloconclusionothatotheooffenceounderoSectiono138oofo Negotiableo Instrumentso Act,o 1881o cano beo compoundedo ato allo stageso ofo litigation,o includingo wheno theo mattero haso reachedo theo Higho Courto aftero havingobeenoconclusivelyodealtowithobyotheoMagisterialoasoalsootheoSessionso Court.ooInootherowords,osuchoanooffenceocanobeocompromised/compoundedo evenoafterotheopetitioner-accusedohasobeenoconvictedobyotheoCourtoofolearnedo Magistrateo ando hiso appealo againsto theo sameo haso beeno dismissedo byo theo learnedoSessionsoCourt.ooo

6.4.o o TheoHon'bleoSupremeoCourtoinotheojudgmentoofoDamodaroS.o Prabhuo (supra)o haso alsoo enunciatedo that,o ordinarily,o costso oughto too beo NAVEEN NAGPAL imposedowhenotheooffenceounderoSectiono138oofoNegotiableoInstrumentsoActo CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o6o o ofo 1881o iso compoundedo ato ao stageo wheno substantialo proceedingso haveo alreadyobeenoundertakenobyotheoCourtsosooasotoodissuadeotheounscrupulouso litigantofromoundulyodelayingotheocompoundingoofosuchooffences.ooHowever,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)owhichopermitsoreductionoorowaivero ofocostsobasedoonotheofactualomilieuoofoaoparticularocaseoalbeitosubjectotootheo recordingooforeasonsoforosuchovariance.oForotheosakeoofoclarity,oitoisoreiteratedo 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,ocogentoandoreasonedofindingsodelineatingotheospecialofactorso thato justifyo theo waiver.o Thiso requiremento iso ino consonanceo witho theo legislativeointentoandotheounderlyingopurposeosoughtotoobeoachievedobyotheo criminalizationoofotheoactoofodishonoroofocheque,oi.e.otooinculcateofinancialo disciplineoandoupholdotheocredibilityoandosanctityoofonegotiableoinstruments.o

6.5.o o Stillofurther,otheoinherentojurisdictionoofotheoHighoCourtoundero Sectiono528oBNSS,o2023oisoprimarilyoaimedoatopreventingoabuseoofojudicialo CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o7o 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 possibleo amplitude.o Theseo inherento powerso areo ino consonanceo witho theo natureoofoaoHighoCourtowhichooughtotoobe,oandohasoinofactobeen,oinvestedo withopower(s)otoomaintainoitsoauthorityotoopreventotheoprocessoofolaw/Courtso fromobeingo obstructedo oro abused.o Ito iso ao triteopositoofo jurisprudenceo thato thougholawsoattemptotoodealowithoallocasesothatomayoarise,otheoinfiniteovarietyo ofo circumstanceso whicho shapeo eventso ando theo imperfectionso ofo languageo makeoitoimpossibleotoolayodownoprovisionsocapableoofogoverningoeveryocase,o whichoinofactoarises.oAoHighoCourtowhichoexistsoforotheofurtheranceoofojusticeo inoanoindefatigableomanner,oshouldotherefore,ohaveounfetteredopower(s)otoo dealowithosituationsowhich,othoughonotoexpresslyoprovidedoforobyotheolaw,o needotoobeodealtowith,otoopreventoinjusticeoorotheoabuseoofotheoprocessoofolawo andoCourts.oTheojuridicalobasisoofotheseoplenaryopower(s)oisotheoauthority;oino facto theo seminalo dutyo ando responsibilityo ofo ao Higho Court;o too uphold,o too protecto ando too fulfillo theo judicialo functiono ofo administeringo justice,o ino accordanceowitholaw,oinoaoregular,oorderlyoandoeffectiveomanner.oInoothero words;oSectiono528oofoBNSS,o2023oreflectsopeerlessoandoinherentopowers,oofo CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o8o o aoHighoCourtowhichomayobeoinvokedowheneveroitoisojustoandoequitableotoodoo so,o ino particularo too ensureo theo observanceo ofo theo dueo processo ofo law,o too preventovexationoorooppression,otoodoojusticeonayosubstantialojusticeobetweeno theopartiesoandotoosecureotheoendsoofojustice.oTherefore,otheoHighoCourt,oino theoexerciseoofoitsoinherentopowerounderosectiono528oBNSS,o2023ohasotheo discretionotooquashoaoconvictionowhereotheopartiesohaveoreachedoanoamicableo settlement,oprovidedothatosuchocompromiseoneitheroimpingeouponotheopublico interestonoroundermineotheocauseojustice,oasowelloasotheosubstantialojustice.o

7.o o Revertingotootheofactsoofotheocaseoinohand,oitoisonotodisputedobyo theoconcernedorivalopartiesothatoanoamicableosettlementohasobeenoarrivedoato betweenothemoand,otherefore,ocompoundingoofotheooffenceoandonecessaryo furthero directionso haveo beeno soughto fromo thiso Court.o o Ao perusalo ofo theo compromise/settlementodatedo08.12.2025ostatedotoobeoarrivedobetweenotheo partiesoreflectsothatotheopartiesohaveosoughtotooresolveotheirodispute(s)oinototoo andoburyotheohatchet.oConsequently,oinotheoconsideredoopinionoofothisoCourt,o theo factualo matrixo ofo theo caseo requireso thato theo offence(s)o oughto too beo permittedo too beo compoundedo ando theo petitionero No.2o deserveso too beo acquitted.ooo

7.1.o o Keepingo ino viewo theo entiretyo ofo theo attendingo facts/circumstanceso ofo theo case;o especiallyo factumo ofo theo petitionero No.2o havingo sufferedo incarcerationo foro abouto oneo montho aftero havingo beeno convictedobyotheoSessionsoCourt,otheopetitioneroNo.2ohavingofacedotheowratho ofocriminalolitigationosinceoaboutotheoyearo2016,otheopetitionerobeingoaopersono agedo 61o years;o thiso Courto doeso noto deemo ito appropriateo too saddleo theo petitionerowithocosts.ooo

8.o o Inoviewoofotheoprevenientoratiocination,oitoisoordainedothus:o CRRoNos.3187,o3191o&o3196o(O&M)o o o o P a g e o?o9o o

(i)o o Theo impugnedo judgmento datedo 19.11.2025o passedo byo theo learnedoAdditionaloSessionsoJudge,oRupnagaro&otheojudgmentoandoorderoofo stsentenceodatedo28.02.2020opassedobyoJudicialoMagistrateo1 oClass,oRupnagaro areoset-asideoandotheopetitionersoareoacquitted.ooNecessaryoconsequencesotoo follow.o

(ii)o o Theo rivalo partieso shallo remaino boundo byo theo termso ofo theo settlement/compromiseodatedo08.12.2025oenteredointoobetweenotheoparties.oo Inocaseoofonon-complianceothereof,otheoaggrievedopartyoshallobeoatolibertyotoo seekorecalloofothisoorder,oalbeitouponoshowingosufficientocause.ooItoisoclarifiedo thatoinocaseonon-complianceoisofoundotoobeoshown,otheoerringopartyomayobeo saddledowithoexemplaryopunitiveomeasure(s).ooo

(iii)o o Nooorderoasotoocosts.oo

(iv)oo o Pendingoapplication(s),oifoany,oshalloalsoostandsodisposedoof.oo

(v)oo o Photocopyoofothisoorderobeoplacedoonotheofileoofootheroconnectedo case(s).o o o o o o o o o o o oooooo(SUMEEToGOEL)o o o o o o o o o ooooJUDGEo Decembero19,o2025o Naveeno o o o o o Whetherospeaking/reasoned:o o Yeso o o Whetheroreportable:o o o Yeso o