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Judgment
Chirag Bhanu Singh, Judge (Oral)
. The petitioner had come to be convicted by the learned Additional Chief Judicial Magistrate, Shimla, District Shimla, and consequently sentenced to simple imprisonment for six months and to pay compensation of Rs. 1,70,000/-. His conviction and sentence even came to be upheld by the learned Additional Sessions Judge, Shimla, District Shimla, vide his judgment dated 02.06.2025. The Criminal Revision preferred by the petitioner before this Court also eventually came to be dismissed by this Court, vide order dated 21.05.2026 and hence the present petition under Section 528 of BNSS.
The petitioner having amicably settled the matter, now seeks the compounding of the offence under Section 138 of NI Act. He has agreed to pay a sum of Rs.2,54,000/- to the respondent/complainant. In pursuance thereto the petitioner has already paid an amount of Rs. 1,70,000/- in cash to the respondent/complainant and a sum of Rs.84,000/- is stated to be lying deposited before the learned trial . The comproimise deed has been placed on record as Annexure P-4.
The learned counsel for the petitioner further contends that the petitioner had paid an amount of Rs.1,70,000/- in cash. The learned counsel would thus contend that in case the amount of Rs.84,000/- lying deposited before the learned trial Court be released in favour of the respondent/complainant, the entire amount as agreed between the parties, shall stand paid.
The learned counsel for the respondent also submits that an amount of Rs.1,70,000/- stands paid in cash to him and if the balance amount is ordered to be released in favour of the respondent/complainant, the entire amount shall stand paid towards full and final settlement of the claim.
I have heard learned counsel for the parties and gone through the record carefully.
Seemingly, the parites have now burried the hatchet. The learned counsel for the respondent-complainant also submits that the entire compensation amount shall stands received by the respondent-complainant, in case the amount of Rs.84,000/- lying deposited with the learned trial Court is released in favour of respondent/complainant.
The learned counsel for the petitioner submits that since the parties had agreed to settle the matter in full and final settlement of the claim, the petition deserves to be allowed and the petitioner is entitled to be acquitted and released.
Hon’ble Supreme Court, in case titled as “K.M. Ibrahim versus K.P. Mohammed and another, 2010 (1) SCC 798." has categorically gone on to hold that the offences under Section 138 of the N.I. Act, can be allowed to be compounded even at the appellate stage.
The said view has been consistently followed from the year 2004, starting with Anil Kumar Haritwal versus Alka Gupta, reported in 2004 (4) SCC 366, in a series of judgments till K.M. Ibrahim’s case referred hereinabove (supra).
It would be apposite to reproduce para-9 of the K.M, Ibrahim’s case, which reads as under:-
“9.The golden thread in all these decisions is that once a person is allowed to compound a case as provided for under Section 147 of the Negotiable Instruments Act, the conviction under Section 138 of the said Act should also be set aside. In the case of Vinay Devanna Nayak (supra), the issue was raised and after taking note of the provisions of Section 320 Cr.P.C., this Court held that since the matter had been compromised between the parties and payments had been made in full and final settlement of the dues of the Bank, the appeal deserved to be allowed and the appellant was entitled to acquittal. Consequently, the order of conviction and sentence recorded by all the courts were set aside and the appellant was acquitted of the charge leveled against him.”
The Hon’ble Supreme Court thus, has categorically gone on to hold that Section 147 of the N.I. Act, does not in any way bar the parties from compounding an offence under the provisions of Section 138 of the N.I. Act, even at the appellate stage of the proceedings.
The Hon’ble Supreme Court has already held that even if the conviction is upheld, the Court can compound the same even if no proceedings are pending before the Court in Ramgopal and another versus State of H.P. (2022) 14 SCC 531. Even our own High Court in Chune Ram versus Brikam Chand (Cr.MMO No.188 of 2025, dated 13.11.2025) has held that compounding can be affected even if conviction is affirmed by the High Court.
Thus, keeping in view the aforesaid judgment and facts and circumstances discussed herein-above (supra), the parties having indeed buried their differences, the matter having been compromised and the entire compensation amount having been agreed to be paid to the respondent, in full and final settlement of the claim, the parties are allowed to compound the offence and as a sequel, the judgment of this Court dated 21.05.2026 is recalled and the judgments of the learned Courts below, are quashed and set-aside. The accused is acquitted of the charges. The amount of Rs. 84,000/- lying deposited with the learned trial Court is directed to be released in favour of the respondent/complainant.
The petition is disposed of accordingly, so also the pending application(s), if any.