Facts
The applicant was convicted for an offence under Section 138 of the Negotiable Instruments Act, 1881, by the 4th Additional Judicial Magistrate, Bharuch, in Criminal Case No. 59 of 2013 on 20.01.2017
Source reference: p. 1-2This conviction, which included a one-year simple imprisonment and compensation of ₹4,92,000, was upheld by the Additional Sessions Judge, Bharuch, in Criminal Appeal No. 10 of 2017 on 19.12.2018
Source reference: p. 2During the pendency of the revision, the applicant deposited the cheque amount of ₹4,92,000 in a fixed deposit and subsequently filed an undertaking on 25.06.2026 to settle the matter amicably
Source reference: p. 2-3Issues
1. Whether the offence under Section 138 of the Negotiable Instruments Act can be compounded at the revision stage based on a mutual settlement between the parties.
Source reference: p. 3, para 7Law Applied
Section 147 of the Negotiable Instruments Act, 1881, which provides that every offence punishable under the Act shall be compoundable
Source reference: p. 3, para 7revisional jurisdiction under Section 397 read with Section 401 of the Code of Criminal Procedure, 1908
Source reference: p. 1, para 2Section 357(3) of the Code of Criminal Procedure regarding the payment of compensation where a fine is not part of the sentence
Source reference: p. 2, para 2Reasoning
The court noted that during the hearing, both the applicant and the original complainant expressed a willingness to settle the dispute
Source reference: p. 2, para 4The applicant submitted an undertaking to release the principal amount (₹4,92,000) and further agreed to pay an additional ₹1,50,000 to cover litigation costs and interest
Source reference: p. 3, para 5The respondent-complainant explicitly stated they had no objection to the compounding of the offence, provided the funds were released within a specific timeframe
Source reference: p. 3, para 6Given the compoundable nature of the offence under Section 147 of the N.I. Act, the court determined that judicial discretion should be exercised to facilitate the settlement, noting that the parties had willingly accepted the terms to resolve the litigation
Source reference: p. 3, para 7Holding
The court allowed the Revision Application and compounded the offence. The judgments and orders of conviction dated 20.01.2017 and 19.12.2018 were quashed and set aside, and the applicant was acquitted
The applicant was directed to deposit ₹1,50,000 towards litigation costs with the Trial Court within four weeks. Upon such deposit, the Trial Court is directed to release the total sum—the original ₹4,92,000 plus the ₹1,50,000—to the respondent-complainant
Source reference: p. 4, para 9Original Court PDF
HASMUKHBHAI MOTIBHAI PATELvsSTATE OF GUJARAT
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in