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Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB))     26 April 2013

Compounding by accused alone

Hi Experts,

Complainant and Accused were in litigation from last 8 years , Accused never felt that any amount is payable to Complainant but maintained innosent throughout, ultimalely recently Accused convicted for one year. In appeal with session court he came with option of compounding and showing judgement of Supreme Court named...Damodar S.Prabhu vs Sayed Babalal H. on 3 May, 2010.

Now court is forcing to Complainant to take the cheque amount and forget everything happened in last 8 years ant if he dont accept the cheque amount than that amount will be deposited in court, case will be closed. Counsel of Accused is making fun of the situation. If it is only alternate left with Complainant than what is the fun of 15 days period in legal notice u/s 138(b) and what is use of criminal nature of this section. No Accused will care to legal notice and wait 7-8 years, enjoy the amount of Complainant . Ultimately he will come with original amount of cheque in court after long litigation. pl suggest the other alternates left with Complainant.



 11 Replies

R Trivedi (     26 April 2013

But this is true..


After a certain point of time a genuine complainant would like to see the accused behind the bar, but that is just his aggrived feelings only, not a just cause for imprisonment.


This compoundable ruling by Hon Apex Court (Hon K G Balkrishnan and others) is not sufficiently thought of order, but it is Apex Court order. I have read a case (cant recall) in which HC acquitted the accused with 200% + 20% compensation. The figure of 20% came from Apex Court order.

madhu mittal (director)     27 April 2013

Respected Sir, 

With due regard, in my opinion The citation named  Damodar S. Prabhu v. Syed Babalal H. of  Supreme Court is being misunderstood, in this citation, it was nowhere decided that compromise can be made by accused only . In this citation itself, at para 2, it was stated that “the appellant has prayed for the setting aside of his conviction in these matters by relying on the consent terms that have been arrived at between the parties. The respondent has not opposed this plea and, therefore, we allow the compounding of the offence and set aside the appellant's conviction in each of the impugned judgments.”

On this point please also refer citation of Delhi High court decided on 08.10.2010 named : Hitek Industries Industries (Bihar) Ltd. and Ors.
Vs. The State of Delhi and Anr. In which it  was stated

5. The sum and substance of argument of the petitioner's counsel is that even if respondent does not agree to the compromise, in view of the judgment in Damodar S. Prabu case (supra), the Court has to force compromise on the respondent and on deposit of the cheque amount plus cost as stated above, the Court should quash the criminal complaint. I consider that this is not the spirit of the judgment of the Supreme Court. The word 'compromise' itself signifies an agreement between the two parties to compound the offence. If the parties do not agree to compound the offence, the Court has to proceed with the complaint.

On compounding of offence, please also see Vishnu Bhat vs. Narayan R. Bandekar, Managing Director, Rajaram Bandekar (Sirigao) Mines Pvt. Ltd., (25.10.2007 - BOMHC) in which it was stated:

25.    Compounding essentially involves a compromise or agreement and there cannot be a one way traffic whilst entering into a compromise and that would be both for the purpose of Section 147 of the Act as well as Section 320 of the Code. If the Complainant is not willing to accept a compromise, the same cannot be imposed upon him by the Court and the matter will have to be dealt with in accordance with law. Application filed by the accused, therefore needs to be rejected.

On compounding of offence, please also see The Assistant Commissioner, Assessment-II, Bangalore and Ors. vs. Velliappa Textiles Ltd. and Ors. (16.09.2003 – SC), a three judge bench decision, ) in which it was stated:

46…. If some one has committed an offence, he must be prosecuted and if found guilty, must be punished in accordance with law. Compounding of an offence is not a right of the accused nor it is his unilateral act. It can only be done with consent of the authorities enumerated in the provision. No additional right can be created in favour of an accused to enable him to save himself from the "disgrace and ignominy of the prosecution".

madhu mittal (director)     27 April 2013

Respected Sir,

The thinking and behaviour of judiciary, just like in your case is main and root cause of pending of 38 lacs u/s 138 N I Act  in our country about 4 or 5 year ago becasue there is no fear psyche in accused specially in cases u/s 138 N I Act and other crimes in general. They(accused) are gainers/real beneficiary even if they are convicted, that is why they kept on dragging the cases for years, if They(accused) won the case anyhow, they will get the benefit of whole amount, and even if they were convicted, victim/complainant is hardly compenseted fully, in spite of section 30,80 and 117 of N I act itself.

R Trivedi (     27 April 2013

Thats what compounding should be with he mutual consent of two parties, and this aspect is not at all touched upon by Apex Court, and hence I said not well though of.


The other aspect is curative aspect of court, in such kind of regulatory offenses which are quasi civil, at any stage if accused realises the mistake, then after adequate compensation to complainant the case must be settled. Also please note that 8-10 years is due to court's over burdenness, not because of accused or complainant in general.


To me it is absolute ineptness of our judical system that a regulatory offense like this with almost 200 years of experience takes years to settle.

DAULAT DILBAUG (Problems related to money marriage     27 April 2013

At the same time the complainant should also keep in mind that what is surity that case will be decided in his / her favour.


Every litigation has limitation , every evidence can not be brought on record. And also what transpired between the accused and complainant at the time of actual transection can not be accurately replicated.


We are in agreement with various legal persons who work for accused in such criminal cases that to come out of cheque bounce case is more easy than to prove it by complainant.


Every day new rulings are coming in the matter of cheque bounce by higher courts.

madhu mittal (director)     27 April 2013

Respected Sirs in all in general and Sh. R.Trivedi in particular,


First of all, I want to thank the persons/lawyers who started this lawyersclub of  India, for advise/discussion on legal problems, afterwards I want to thank all the lawyers/persons who are giving their valuable time for cause of justice in this forum. But with great respect, If Sir Trivedi, you study a case u/s 138 N I Act, most of accused have taken money, very few are exceptional ones. In our cases, most of the accused side even did not appear in witness box, what the accused does, is simply, he does not give reply of notice, he did not appear in court until and unless he was arrested, means summon and bailable warrant no fear. Even after arrest, he was given bail being a bailable offence(here bail is given second time, firstly at the time of bailable warrant), and at every stage of trial, he makes two or three adjournment applications for lame excuses, afterwards his bail is forfeited, and when again brought to court, he was again given bail in the name of his liberty, here is the point why a person is allowed to  drag the case, by manipulating the court process and gaining time, so prolonging the case is at sweet will of accused, and thus most of our judicial officer, indirectly, knowing or unknowing, support the accused in prolonging the case, at his sweet will. Though there are a number of rulings, that 2nd time bail is not right of accused even in bailable offence. Second time, he should be released on bail only after depositing the face value of cheque+ 18 % p.a. interest thereon from the date of dishonour (s 80 N I Act and s 82 C)+ prosecution cost (s 117 ) except in rarest of rare case. Most of  pendency will disappear and very few cases will come to the court, thus increasing the cause of national economy. Some other example, accused did not fight the case, that he did not take the money, he sometimes put application for sending the cheque of Handwriting Expert even without denying the signature of his own on cheques or transaction at all, or placing the report of any privately Handwriting Expert thus taking three or four dates of hearing, if all goes well in court, otherwise in getting deciding an application like this again 6 or 7 hearing dated elapsed and afterwards dismissing the application, no loss to him, if his application is allowed, another three to four years at FSL. The accused knew very well from the beginging there is no harm to him if case goes to court, and whenever and whatever and at the most, face value of cheque, he wants to give, he will be set free in the name of reducing the pendency, and in real sense paving the way for dishonour of cheaues in future and not pressuring the accused in the cases at court and only pressuring the victim/complainant for taking whatever( just like beg) is being given to him for saving his future time and productive money. Thus if accused won the case by technicalties or any mistake in fight the case, he is gaining the whole amount whatever due to him and even if he losses or even convicted at least saving the interest for protracted time, and out of this interest, some amount is spent on lawyers etc., thus he is the real beneficiary of thinking and behaviour of the persons/lawyers/judicial officers/sympathizer of borrower, who thinks, that the accused should be let free even after conviction, because this is quasi-criminal/civil matter and no problem whatever valuable time of court and police, for dragging the matter at his sweet will, he consumed. We should also think, what will happen and how one feel, when his hard earned money will not be returned even by banks, as banks will not be in position to recover their dues in our judicial system. What is happening in our India, the most of the nationalized banks are reluctant to lend the money to the persons of less means, defeating the purpose, they were nationalized. Now again, they are providing the loans only to borrower of means, just like gold, land and house etc. some tangible assests, what was being done in pre-nationalising period of banks.  Small amount for productive purpose for shop etc are given in less, in camparison to the small amount for consumption purpose ie. for cars, for having white goods etc. And still the some person are daring to advance on the basis of post dated cheque in our India, most of them either have closed their business or thinking even not to close, only to reduce the lawful business, because of this mis-sympathy in our system. Let me Hope one day comes in our India, when the wrong doer will not be able to find/get sympathier for his wrongs in judicial system in particular and society in general.

Thanks and with regards,


There are people who give advice or conduct cases so that accused fails and so people like you should be happy.


When you are aware that so much hardships are there still how money is advanced on the strength of piece of paper.


So most of the complainants are illegal money lenders and even NBFC.S.




SO we  AND MANY WITH US HELP THE ACCUSED IN CHEQUE BOUNCE CASE ANY WHERE SO THAT CASE AGAINST HIM / HER IS DECIDED AGAINST THE COMPLAINANT. Victims / accused are welcome to contact at- with complete details of the case.


Please read the following news item published in media about BANGALORE episode. It is an eye opener for all the legal persons who work for accused.


We at our end try to provide best of guidance and action for any accused of cheque bounce case to come out it  located any where.and facing action .


Thursday, May 6, 2010

Corruption in ACMM court Bangalore: officials, banks, lawyers nexus

Bangalore Mirror has broken a story which shows how corruption is seeping right through Indian judiciary.  The Provident Fund scam was involved with high court judges and a supreme court judge too.  The case below involves court officials but not judges.

So there is taint of corruption in courts right from Supreme court to lower courts… corruption has become the great leveller in Indian judiciary.

Bangalore Mirror has exclusive details of the cheating committed on innocent citizens of India. A room full of some 70,000 fake Non-Bailable Warrants (NBW) is being scrutinised at the court.

Officials investigating the scam have found fake seals of judges’ signatures, and cooked-up court papers. The documents were found in the pending branch of the court complex.

A bank-court staff ring used these papers against clueless borrowers of ICICI Bank, Kotak Mahindra Bank Limited, Cholamandalam DBS Finance Limited, Reliance Capital and HDFC Bank, among others. The fraud was committed against borrowers whose cheques bounced.

When an EMI cheque bounces, the bank and its advocates get into the act by getting forged documents and NBWs out of the ‘parallel court’ operating at the court.

Then, the bank sends its musclemen or takes the help of the police to confront the ‘accused’ with fake warrants.
After threatening the debtor, they recover the entire loan amount, and not just the EMI.

This is against the procedure laid down under Section 138 of the Negotiable Instruments Act, 1881. No sworn statement of the bank manager is recorded nor is any sworn statement taken in any of these cases.

Another major fraud is that most of the accused are not in Bangalore. Many live in cities like Kolkata, Chennai, Hyderabad, Mumbai, Allahabad, and in remote corners of Jharkand and Bihar. The story unfolded after many such harassed customers complained to the court, sources said.

The law says a Bangalore court cannot have jurisdiction on an offence committed outside the city.

The truth is, none of these accused had even visited Bangalore before. So, there was no question of the XIV ACMM having jurisdiction over these people.

The scam has shaken the judiciary in Karnataka. One source told this journalist that an advocate had filed 30,000 such cases allegedly on behalf of Cholamandalam DBS Finance in the last six months. An advocate reportedly representing Kotak Mahindra Bank has filed around 10,000 fake cases in the last six months.

The preliminary inquiry has revealed that advocates representing many banks, in collusion with court staff, have created their fake stationery for preparing the orders.

These orders don't have the date of execution nor are the so-called signatures supported by dates. A closer look at the order sheets reveals that they have been faked.




R Trivedi (     28 April 2013

To Madhu Mittal,


1. Courts cannot convict accused due to feelings of complainant.

2. A complainant may be very bitter after years of litigation, but that cannot be the ground for conviction, yes court can decide suitable compensation.


Problem with S.138, it has become like DV Act/498A type wife complaint. It is proved beyond reasonable doubt that  DV act is substantially misused. It is not proved yet, but it is true, that S.138 is also being hugely misused.


All money lending companies, banks, firms, individuals must be out of perview of NI Act, for the simple reason if any one lends money he should ensure proper mortgagable security, in case of default they can initiate civil recovery under law. A cheque leaf cannot be a security. I do not know when will courts understand.

Ashish Singla 098140 76600 (Cheque Victim's Lawyer. LUDHIANA (PB))     30 April 2013




_ Compounding means agreement of two parties of case on same direction, at same time, at same meaning, at same point. The word ‘compromise’ itself signifies an agreement between the two parties to compound the offence. If the parties do not agree to compound the offence, the Court has to proceed with the complaint. It is different thing that the Court on considering the offer of payment of cheque amount plus cost may not award a punishment of imprisonment and may only award penalty plus compensation. But the Court cannot force the complainant to enter into a compromise on deposit of cheque amount or the penalty amount by the accused.  ( IN THE HIGH COURT OF DELHI AT NEW DELHI, Date of Order: 8th October, 2010 M/s Hitek Industries(Bihar) Ltd. & Ors. ... Versus The State of Delhi & Anr. ... )


_ Compounding by both the parties is possible with charges is discretion power of competent court (10%, 15%, 20%) depends on so many circumstances of each case like stage of compromise, costing to judiciary etc.

_ If complainant gets perfect compensation to meat up his financial deficiency, he can definitely give his consent to accused  to enter in compounding.

_ If accused thinks that after wasting the statutory period period of 15 days notice u/s 138(b), at the stage of conviction, he will deposit the cheque amount with some penalties into the court to quit the matter, even without consent of complainant, that deposit will not be accepted by any court to acquit him.

_ If accused makes clear his innocence and defense on his first/second appearance in concerned court and ready/brings to deposit the cheque amount , than court can think if it seams to genuine, may accept the cheque amount to acquit the accused even without consent of complainant…( In the High Court of Punjab and Haryana, at Chandigarh. Date of Decision: 14.10.2010 M/s Sunil Kumar & Company and Another Versus Baltej Singh Sidhu)

_ No compromise or settlement is possible by one of party alone without the consent of other party/parties of case, after facing  proper trial.



R Trivedi (     01 May 2013

The present status with respect to compounding under S.147 of NI Act.


1. any time at any stage if complainant compounds, matter ends. There are many orders of Hon Punjab & Haryana High Court and other High Courts where the accused was acquitted on the grounds that matter was compounded after conviction from the trial court. In such cases question of additional penalty 5%, 10%, 20% does not come for consideration.


2. Now the Hon Apex Court order talks of comppounding penalty of 5%, 10% & 20%, what does it mean, if complainant is voluntary party to compounding, and says matter is closed with accused, I do not think under such circumstances court  will impose any kind of compounding charges so called 5% to 20%.



So this observation of Supreme Court (which I have stated earlier also lacks full thought) can only mean that court can compound the case at any stage (5%,10%,20%) even if complainant is not willing.


This order has made the prosecution a dud piece, accused will never have the fear of jail, as he will keep fighting and finally after 10-12 years he can say to SC ok, now I can pay 200% + 20%, acquitt me.


Till the time SC does not review this order, I do not think any other meaning can be attached to this order. This is my personal opinion only.

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