Case Note & Summary
The petitioner, Arthi Kamlesh Purohit, was convicted by the Fast Track Court No.II (Magisterial Level), Erode in S.T.C.No.695 of 2018 for the offence under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to six months simple imprisonment with a direction to pay Rs.08,01,990/- as compensation to the complainant, M/s.Sri Vimala Nehru Exports Private Ltd., represented by its Director Rishabh Parakh. The conviction was confirmed by the II Additional District and Sessions Judge, Erode in C.A.No.157 of 2021 on 02.02.2026. The petitioner filed a criminal revision before the Madras High Court under Section 438 read with Section 442 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, challenging the concurrent findings. During the pendency of the revision, the parties arrived at an amicable settlement and filed a Memo of Compromise dated 18.03.2026. The respondent/complainant appeared via video conferencing and affirmed the settlement. The Court, considering the nature of the offence and the compromise, permitted the parties to compound the offence. Consequently, the judgment of the appellate court and the trial court were set aside, the revision was allowed, and the petitioner was acquitted of all charges. The Court also directed refund of any fine amount paid and discharge of bail bonds.
Headnote
A) Negotiable Instruments Act - Section 138 - Compounding of Offence - Settlement - The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque. The parties subsequently arrived at an amicable settlement and filed a Memo of Compromise. The Court permitted compounding of the offence in view of the compromise and set aside the conviction and sentence. Held that the offence under Section 138 is compoundable and upon settlement, the conviction can be set aside and the accused acquitted. (Paras 2-4)
Issue of Consideration
Whether the conviction under Section 138 of the Negotiable Instruments Act can be set aside upon the parties entering into a compromise and compounding the offence.
Final Decision
The criminal revision is allowed. The judgment dated 02.02.2026 in C.A.No.157 of 2021 and the judgment dated 07.10.2021 in S.T.C.No.695 of 2018 are set aside. The petitioner is acquitted of all charges. Fine amount, if any, to be refunded; bail bonds discharged.
Law Points
- Compounding of offence under Section 138 of Negotiable Instruments Act is permissible upon settlement between parties
- Criminal revision allowed on compromise
- Conviction set aside upon compounding
