After Complainant Accepts Full Settlement, Gujarat HC Quashes Jailed Man’s Cheque-Bounce Conviction, Orders 7.5% Costs

The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to one year’s simple imprisonment, a fine equivalent to twice the cheque amount, compensation under Section 357 CrPC, and 30 days’ simple imprisonment in default.

The conviction in Criminal Case No. 5212 of 2021 was confirmed on appeal in Criminal Appeal No. 179 of 2023

The petitioner sought to quash both orders and consequential proceedings under Articles 226 and 227 of the Constitution and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023

The complainant confirmed that the parties had settled, that he had received the agreed amount in full, and that he consented to quashing

Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, confers inherent power to make orders necessary to secure the ends of justice or prevent abuse of process.

The Court treated the Section 138 offence as compoundable and relied on Gian Singh v. State of Punjab, Madan Mohan Abbot v. State of Punjab, Nikhil Merchant v. CBI, Manoj Sharma v. State, Narinder Singh v. State of Punjab and State of Haryana v. Bhajanlal for the power to quash proceedings in light of settlement.

It also applied the guidelines in Sanjabij Tari v. Kishore S. Borcar (2025 LawSuit (SC) 1302), under which compounding before a Sessions Court or High Court in revision or appeal may be allowed on payment of 7.5% of the cheque amount as costs.

The Court accepted the complainant’s affidavit and submissions as confirming a voluntary, fully performed settlement, with no surviving grievance.

Given the private nature of the dispute and the complainant’s consent, it concluded that continuing the criminal proceedings would serve no useful purpose, would harass the petitioner, and would amount to an abuse of process; quashing was therefore warranted to secure the ends of justice.

Because settlement occurred after the conviction had been confirmed on appeal, the Court directed payment of 7.5% of the cheque amount in accordance with the Sanjabij Tari guideline.

The conviction dated 23 February 2023, the appellate order dated 27 February 2026, and all consequential proceedings against the petitioner were quashed and set aside.

The petitioner was directed to be released forthwith if not required in another case, and to deposit 7.5% of the cheque amount with the Gujarat High Court Legal Aid Services Authority within two weeks; failure to pay would result in recovery as a fine and as arrears of land revenue.

Rule was made absolute.