After Tata Capital’s Dues Were Paid, Gujarat HC Quashes Cheque-Bounce Conviction, Orders 7.5% Of Cheque Amount To Legal Aid

The petitioners sought to quash their conviction under Section 138 of the Negotiable Instruments Act, 1881, and consequential proceedings.

By judgment dated 16 February 2026, the Magistrate had sentenced the accused to one year’s simple imprisonment and ordered payment of compensation with interest, with a further six months’ imprisonment in default.

After the conviction, the parties settled; the complainant, Tata Capital Limited, confirmed that the outstanding dues had been paid and the loan account closed, and consented to quashing.

The petition was brought under Articles 226 and 227 of the Constitution and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

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

The Court relied on Gian Singh v. State of Punjab, Madan Mohan Abbot v. State of Punjab, Nikhil Merchant v. CBI, Manoj Sharma v. State and Narinder Singh v. State of Punjab, among other authorities, in considering quashing on the basis of settlement.

It also applied the cost guidelines stated in Sanjabij Tari v. Kishore S. Borcar: where payment is made before a Sessions Court or High Court in revision or appeal, compounding may be permitted on payment of 7.5% of the cheque amount as costs.

The Court accepted the complainant’s confirmation that the dues had been paid and the loan account closed, and noted the complainant’s consent to quashing.

In light of the settlement, it considered continuation of the criminal proceedings unnecessary and a potential abuse of process, and held that quashing would secure the ends of justice under Section 528 BNSS.

Applying the Sanjabij Tari guideline for payment before a High Court, it imposed costs equal to 7.5% of the cheque amount.

The petitioner was ordered to deposit 7.5% of the cheque amount with the Gujarat High Court Legal Aid Services Authority within two weeks. If unpaid, the amount was to be recovered as fine and as arrears of land revenue.