Gujarat High Court

Conviction under Section 138 Negotiable Instruments Act Quashed Pursuant to Compounding of Offence via Amicable Settlement

IMRAN BASHIRBEG MIRZA vs STATE OF GUJARAT

Gujarat High CourtJUDGMENT: July 08, 20262 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The applicant (original accused) was convicted by the Additional Civil Judge and JMFC, Jambusar, in Criminal Case No. 559 of 2014 for an offence under Section 138 of the Negotiable Instruments Act

Source reference: p. 2

This conviction was subsequently confirmed by the Additional Sessions Judge, Bharuch, in Criminal Appeal No. 56 of 2017 on 25.09.2018

Source reference: p. 2

The applicant challenged these orders via the present Revision Application.

Source reference: p. 2

During the pendency of the revision, the High Court suspended the sentence on the condition of depositing 30% of the cheque amount

Source reference: p. 2

Subsequently, the parties entered into an amicable settlement, and the disputed cheque amount was realized by the complainant

Source reference: p. 2
02

Issues

1. Whether the Court should exercise its power to compound the offence under the Negotiable Instruments Act in light of a post-conviction settlement between the parties

Source reference: p. 3
03

Law Applied

The Court applied Section 147 of the Negotiable Instruments Act, 1881, which prescribes that every offence punishable under the Act shall be compoundable

Source reference: p. 3

It also operated under the revisional jurisdiction defined by Sections 397 and 401 of the Code of Criminal Procedure, 1973

Source reference: p. 1
04

Reasoning

The Court noted that the matter was settled amicably between the parties during the final hearing stage

Source reference: p. 2

The respondent No. 2 (original complainant), appearing via virtual mode, confirmed the voluntary nature of the settlement and stated that no grievance remained regarding the disputed cheque

Source reference: p. 3

An affidavit filed by the complainant's wife further supported the fact of realization of the dues

Source reference: p. 2-3

Since Section 138 of the N.I. Act is primarily a civil wrong cloaked in a criminal nature, the Court found it fit to exercise its discretionary power under Section 147 to compound the offence, effectively nullifying the need for further incarceration or criminal proceedings

Source reference: p. 3
05

Holding

The High Court allowed the revision application and compounded the offence under Section 138 of the N.I. Act

The judgment and order dated 25.09.2018 passed by the Addl. Sessions Judge, Bharuch, and the judgment dated 28.07.2017 passed by the JMFC, Jambusar, were quashed and set aside

Source reference: p. 3-4

The applicant was acquitted of the charges following the compounding of the matter

Source reference: p. 4
Gujarat High Court

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IMRAN BASHIRBEG MIRZAvsSTATE OF GUJARAT

Gujarat High Court · July 08, 2026

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