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Kiran Kumar (Lawyer)     21 June 2011

Recent Bombay HC judgment on 138 NI Act

Hon'ble Bombay HC has recently held in 




Criminal Application No. 530 of 2009 decided on 18.07.2009


in case of Dishonour of cheque, the offence is compoundable, if the parties settle the matter outside court but subsequently the accused failed to make the payment then it will not amount to admission of guilt by accused.  Accused has right to contest the case on merits.


 4 Replies

Amit Parmar (Junior Lawyer)     24 June 2011

Thanks Sir ..........

Nadeem Qureshi (Advocate/ nadeemqureshi1@gmail.com)     25 June 2011

if a complainant is not ready to settle the matter then what remedy  avaliable to accused, can court have power to settle the metter without consent of the complainant, if yes , any citation, pls provide

Kiran Kumar (Lawyer)     25 June 2011

well the basic purpose of 138 is to ensure that money is returned to the complainant/ victim....the court may ask the complainant to accept the money but that does not mean that court can compel complainant at any stage.....court may impose fine upon the accused which is to be paid to the complainant as a matter of compensation.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     26 July 2011

Please also go through following Delhi DC citaion which further explains the SC directive for compounding in NI 138 cases :- 




Hitek Industries Industries (Bihar) Ltd. and Ors. v. The State of Delhi and Anr. MANU/DE/2667/2010 (Decided on 08.10.2010)

Criminal- Petition filed for quashing of complaint under Section 138 of Negotiable Instruments Act-In the instant case Petitioners entered into a compromise with the respondent and the learned Trial Court took cognizance of the offence in disregard to the compromise which resulted breach of compromise agreement- What if the Respondent does not agree to the compromise- Whether the Court has power to force compromise on the respondent?

Held, that the Court should quash the Criminal Complaint and 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. 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. The Court cannot force the Respondent to enter into a compromise on deposit of cheque amount or the penalty amount by the accused. The Court can only advise/ask the Respondent to consider the offer of compromise. The petitioner during arguments offered to pay 15% of the cheque amount as cost to be deposited with Legal Aid. It is submitted that in view of this offer of the petitioner the petition should be allowed and complaint under Section 138 NIC Act should be quashed.

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