Madras High Court
Kandasamy vs Murugesan on 6 July, 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
CORAM
DATED: 06.07.2026
THE HONOURABLE MR.JUSTICE SHAMIM AHMED
Crl.R.C.No.1848 of 2024 &
Crl.M.P.No.15587 of 2024
Kandasamy …. Petitioner
/vs/
Murugesan ... Respondent
Prayer : Criminal Revision Petition filed under sections 438 r/w.442 of BNSS to set
aside the judgment and conviction passed by the learned Principal District and
Sessions Judge, Ariyalur in Crl.A.No.11/2022 dated 16.07.2024 as well as the
judgment of conviction dated 10.08.2022 passed in STC.No.425/2019 on the file of
the learned District Munsif cum Judicial Magistrate, Sendurai, Ariyalur District and
to revise the same and to acquit the petitioner/Appellant/accused herein.
For Petitioner ... Mr. Illanchezhian
For Respondent .... Mr. S. Sarath Chandran
ORDER
Heard Mr.Illanchezhian, learned counsel appearing for the Revision Petitioner
and Mr.S. Sarath Chandran , learned counsel appearing for the respondent.
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2. The instant Criminal Revision Case has been filed challenging the conviction
and sentence passed in C.A.No.11 of 2022, dated 16.07.2024 by the learned Principal
District and Sessions Judge, Ariyalur, confirming the conviction and sentence made
in STC.No.425 of 2019, dated 10.08.2022 passed by the District Munsif cum
Judicial Magistrate, Sendurai, Ariyalur District.
3. The learned trial Judge has convicted the Revision Petitioner/accused under
section 138 of Negotiable Instruments Act and sentenced him to undergo Simple
Imprisonment for six months and to pay a compensation of Rs.11,00,000/-, (i.e., the
amount due upon the cheque along with Rs.1,00,000/- as compensation to the
complainant for mental agony), in default, to undergo, two months simple
imprisonment. The conviction and sentence imposed by the trial court was also
confirmed by the First Appellate Court.
4. The facts leading to filing of this Criminal Revision Case is as follows;
(i) The revision petitioner, borrowed a sum of Rs.10,00,000/- from the respondent
and to discharge his liability, the revision petitioner issued cheque, dated 06.06.2014.
When the cheque was presented for encashment, the same was returned with an
endorsement ‘Funds Insufficient’. Immediately, the respondent issued legal notice
demanding the cheque amount and it was received by the petitioner on 19.08.2014.
Since the petitioner neither returned the amount, nor gave any reply, the respondent
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filed a complaint for the offence of section 138 of the Negotiable Instruments Act
before the District Munsif-cum-Judicial Magistrate, Sendurai.
5. After recording the sworn statement of the respondent and after being
satisfied that prima facie case has been made out to proceed further against the
Revision Petitioner for the offence under section 138 of NI Act, the trial Court has
issued summon to the Revision Petitioner. On the appearance of the Revision
Petitioner, copies have been furnished and the substance of allegation has been put to
him. The Revision Petitioner has denied the allegation and has claimed to be tried.
6. After considering the arguments, the learned trial court has found the
Revision Petitioner guilty of the offence under section 138 of the Negotiable
Instruments Act and the Revision Petitioner has been convicted and sentenced to
undergo SI for a period of six months and also directed him to pay a compensation of
Rs.11,00,000/- to the complainant, (I.e.the amount due upon the cheque along with
Rs.1,00,000/- as compensation for the mental agony) in default to undergo two
months simple imprisonment. The conviction and sentence imposed by the trial court
was also confirmed by the First Appellate Court.
7. Aggrieved by the judgment, the Revision Petitioner has preferred the appeal
in C.A.No.11 of 2022 before the Principal District and Sessions Judge, Ariyalur and
the first appellate court dismissed the appeal vide judgment and order dated
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16.07.2024, by confirming the judgment of conviction and sentence imposed by the
trial court in STC.No425 of 2019 and it directed to secure the Revision Petitioner to
undergo the sentence and to pay the compensation amount.
8. Challenging the conviction and sentence passed by the both courts below, the
Revision Petitioner has preferred the present Criminal Revision Case before this
Court.
9. During the pendency of the present Criminal Revision, the parties have
entered into a Joint Compromise Memo, dated 30.06.2026 which is taken on record
and the same is extracted hereunder:
“JOINT COMPROMISE MEMO’
‘The Petitioner/Sole Accused and the respondent/complainant above
named, most respectfully submits as follows:
1. The petitioner preferred the above Criminal Revision Petition against
the judgment passed in C.A.No.11 of 2022 dated 16.07.2024 on the file
of the Principal District and Sessions Judge, Ariyalur by confirming the
judgment passed in S.T.C.No.425 of 2019 dated 10.08.2022 on the file of
the District Munsif Cum Judicial Magistrate, Sendurai, Ariyalur
District.
2. This Hon’ble Court vide its order dated 18.11.2024 made in
Crl.M.P.No.15170 of 2024 suspended the sentence imposed on the
petitioner with a condition to deposit20% of the cheque amount (i.e.)
Rs.2,00,000/-. The said conditional order was not honoured by the
petitioner herein. Ultimately, this Hon’ble Court by its order dated
12.06.2026 directed the trial court to secure the presence of the
petitioner.
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3. Accordingly, the trial court secured the petitioner and remanded him
to judicial custody on 27.06.2026 and currently the petitioner is
confined at Central Prison, Trichy.
4. It is most respectfully submitted due to intervention of both the
family members the issue between the petitioner and the respondent was
amiably settled out of court and the entire amount payable to the
respondent by the petitioner settled and the respondent acknowledged
the same. Both the parties are now having no subsisting grievance
against each other. Due to compromise the respondent is willing to
withdraw the complainant given as against the petiitoner in
S.T.C.No.425 of 2019 dated 10.08.2022 on the file of the District Munsif
cum Judicial Magistrate, Sendurai, Ariyalur District and therefore seeks
this Hon’ble Court to setaside the judgment passed in C.A.No.11 of
2022 dated 16.07.2024 on the file of the Principal District and Sessions
Judge, Ariyalur by confirming the judgment passed in S.T.C.No.425 of
2019 dated 10.08.2022 on the file of the District Munsif cum Judicial
Magistrate, Sendurai, Ariyalur District the criminal proceedings in
Crl.R.C.No.1848 of 2024 pending on the file of this Hon’ble Court.
5. It is further submitted that this compromise is entered between the
parties voluntarily without any coercion, threat, or undue influence, and
further undertake to appear before this Hon’ble Court to affirm the
same.
6. This Hon’ble Court may be pleased to record this Joint Memo of
Compromise and set aside the judgment passed in C.A.No.11 of 2022
dated 16.067.2024 on the file of the Principal District and Sessions
Judge, Ariyalur by confirming the judgment passed in S.T.C.No.425 of
2019 dated 10.08.2022 on the file of the District Munsif cum Judicial
Magistrate, Sendurai, Ariyalur District in the interest of justice.
It is therefore prayed that this Hon’ble Court may be pleased to set
aside the judgment passed in C.A.No.11 of 2022, dated 16.07.2024 on
the file of the Principal District and Sessions Judge, Ariyalur, by
confirming the judgment passed in S.T.C.No.425 of 2019, dated
10.08.2022 on the file of the District Munsif Cum Judicial Magistrate,
Sendurai, Ariyalur District and allow the Crl.R.C.No.1848 of 2024
pending on the file of this Hon’ble Court and pass further orders as may
be deem fit in the facts and circumstances of the case and thus render
justice.’
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10. Learned counsel for the petitioner submitted that this court vide order dated
18.11.2024 made in Crl.M.P.No.15170 of 2024 suspended the sentence imposed on
the petitioner with a condition to deposit 20% of the cheque amount (i.e,
Rs.2,00,000/- and since the said conditional order was not honoured by the petitioner,
ultimately, this court, by its order dated 12.06.2026, directed the trial court to secure
the presence of the petitioner and accordingly, the trial court secured the petitioner
and remanded him to judicial custody on 27.06.2026 and as of now, the petitioner is
confined at Central Prison, Trichy.
10. Learned counsel for the Revision Petitioner submits that pending Criminal
Revision, both the parties have entered into a Joint Compromise Memo dated
30.06.2026 to the effect that the Criminal Revision case shall be settled in accordance
with the terms and conditions as contained therein.
12. He further submitted that the respondent and the petitioner have now
entered into a compromise. The total amount due to be paid to the respondent as per
the order of the trial court is Rs.11,00,000/-. (i.e.,the amount due upon the cheque
along with Rs.1,00,000/- towards mental agony). The respondent and petitioner have
agreed for a settlement of Rs.11,00,000/- and the respondent is ready to accept
Rs.11,00,000/- and the respondent has received Rs.11,00,000/-. Thus, it was argued
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by the learned counsel for the petitioner that the respondent has no objection if this
Court while exercising power under section 147 of the Negotiable Instruments Act,
compound the offence and dispose of this Criminal Revision Case.
13. The learned counsel for the respondent submits that the petitioner and the
respondent have entered into a compromise and he has received the entire amount as
ordered by the trial court and no amount is due. Thus, he submitted that recording
the Joint Compromise Memo, this Court may compound the offence and dispose of
this Criminal Revision Case.
14. Learned counsel for the Revision Petitioner further submits that the present
Revision has been filed on 23.10.2024 before this Court and on the basis of change in
circumstances, as the parties have entered into Compromise Memo filed by both
parties, it was prayed to this Court to compound the offence. It was further argued by
the learned counsel for the Revision Petitioner that this Court has inherent powers to
compound the offence, so that, ends of justice could be secured as the object of
Negotiable Instruments Act is primarily compensatory and not punitive and moreover
Section 147 of NI Act would have an overriding effect on section 320 Cr.P.C.,
irrespective of which stage, the parties are compromising with the kind leave of this
Hon’ble Court.
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15. In support of his arguments, learned counsel for the Revision Petitioner has
submitted that in the case of Damodar S. Prabhu vs. Sayed Babalal H reported at
2010 (2) SCC (Cri) 1328, the Hon’ble Apex Court had formulated the guidelines for
compounding the offence under section 138 N.I. Act wherein in para 21, it was
pleased to observe as under :
“With regard to the progression of litigation in cheque bouncing
cases, the learned Attorney General has urged this Court to frame
guidelines for a graded scheme of imposing costs on parties who
unduly delay compounding of the offence. It was submitted that the
requirement of deposit of the costs will act as a deterrent for delayed
composition, since at present, free and easy compounding of offences
at any stage, however belated, gives an incentive to the drawer of the
cheque to delay settling the cases for years. An application for
compounding made after several years not only results in the system
being burdened but the complainant is also deprived of effective
justice. In view of this submission, we direct that the following
guidelines be followed:-
THE GUIDELINES
(i) In the circumstances, it is proposed as follows:
(a) That directions can be given that the Writ of Summons be suitably
modified making it clear to the accused that he could make an
application for compounding of the offences at the first or second
hearing of the case and that if such an application is made,
compounding may be allowed by the court without imposing any
costs on the accused.
(b) If the accused does not make an application for compounding as
aforesaid, then if an application for compounding is made before the
Magistrate at a subsequent stage, compounding can be allowed
subject to the condition that the accused will be required to pay 10%
of the cheque amount to be deposited as a condition for compounding
with the Legal Services Authority, or such authority as the Court
deems fit.
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(c) Similarly, if the application for compounding is made before the
Sessions Court or a High Court in revision or appeal, such
compounding may be allowed on the condition that the accused pays
15% of the cheque amount by way of costs.
(d) Finally, if the application for compounding is made before the
Supreme Court, the figure would increase to 20% of the cheque
amount.”
16. Learned counsel for the Revision petitioner also submitted that in the case
of M/s Meters and Instruments Private Limited and another vs. Kanchan Mehta
reported at 2017 (7) Supreme 558, the Hon’ble the Apex Court in para 18, was
pleased to observe as under :
i) Offence under Section 138 of the Act is primarily a civil wrong.
Burden of proof is on accused in view presumption under Section
139 but the standard of such proof is “preponderance of
probabilities”. The same has to be normally tried summarily as per
provisions of summary trial under the Cr.P.C. but with such
variation as may be appropriate to proceedings under Chapter
XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will
apply and the Court can close the proceedings and discharge the
accused on satisfaction that the cheque amount with assessed costs
and interest is paid and if there is no reason to proceed with the
punitive aspect.
(ii)The object of the provision being primarily compensatory,
punitive element being mainly with the object of enforcing the
compensatory element, compounding at the initial stage has to be
encouraged but is not debarred at later stage subject to
appropriate compensation as may be found acceptable to the
parties or the Court.
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(iii)Though compounding requires consent of both parties, even in
absence of such consent, the Court, in the interests of justice, on
being satisfied that the complainant has been duly compensated,
can in its discretion close the proceedings and discharge the
accused.
(iv)Procedure for trial of cases under Chapter XVII of the Act has
normally to be summary. The discretion of the Magistrate under
second proviso to Section 143, to hold that it was undesirable to try
the case summarily as sentence of more than one year may have to
be passed, is to be exercised after considering the further fact that
apart from the sentence of imprisonment, the Court has jurisdiction
under Section 357(3) Cr.P.C. to award suitable compensation with
default sentence under Section 64 IPC and with further powers of
recovery under Section 431 Cr.P.C. With this approach, prison
sentence of more than one year may not be required in all cases.
(v) Since evidence of the complaint can be given on affidavit,
subject to the Court summoning the person giving affidavit and
examining him and the bank’s slip being prima facie evidence of
the dishonor of cheque, it is unnecessary for the Magistrate to
record any further preliminary evidence. Such affidavit evidence
can be read as evidence at all stages of trial or other proceedings.
The manner of examination of the person giving affidavit can be as
per Section 264 Cr.P.C. The scheme is to follow summary
procedure except where exercise of power under second proviso to
Section 143 becomes necessary, where sentence of one year may
have to be awarded and compensation under Section 357(3) is
considered inadequate, having regard to the amount of the cheque,
the financial capacity and the conduct of the accused or any other
circumstances’.
17. Learned counsel for the Revision Petitioner further has relied upon the
judgment of Gujarat High Court in the case of Kripal Singh Pratap Singh Ori vs.
Salvinder Kaur Hardip Singh reported at 2004 Crl. L. J. 3786 wherein, the Gujarat
High Court was pleased to observe as under:-
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31. In the circumstances, it is hereby declared that the compromise
arrived between the parties to this litigation out of court is accepted
as genuine and the order of conviction and sentence passed by the
learned JMFC, Vadodara and confirmed in appeal by the learned
Sessions Judge, Fast Track Court, Vadodara, therefore, on the given
set of facts are hereby quashed and set aside as this court intends,
otherwise to secure the ends of justice as provided under section 482
Cr.P.C. Obviously the order disposing Revision Application would
not have any enforceable effect.”
18. Learned counsel for the Revision Petitioner has also relied upon the
judgment of Hon’ble the Apex Court in the case of Vinay Devanna Nayak vs. Ryot
Seva Sahkari Bank Limited reported at AIR 2008 SC 716 wherein the Hon’ble Apex
Court was pleased to observe as under :
“18. Taking into consideration even the said provision (Section
147) and the primary object underlying Section 138, in our
judgment, there is no reason to refuse compromise between the
parties. We, therefore, disposeof the appeal on the basis of the
settlement arrived at between the appellant and the respondent.
19. For the foregoing reasons the appeal deserves to be allowed
and is accordingly allowed by holding that since the matter has
been compromised between the parties and the amount of
Rs.45,000/- has been paid by the appellant towards full and final
settlement to the respondent-bank towards its dues, the appellant
is entitled to acquittal. The order of conviction and sentence
recorded by all courts is set aside and he is acquitted of the
charge levelled against him.”
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19. Learned counsel for the Revision Petitioner has argued that the law
regarding compounding of offences under the N.I. Act is very clear and is no more
resintegra and the offences under the N.I. Act can be compounded even at any stage
of the proceedings. He submits that in terms of the aforesaid law laid down by the
Hon’ble Supreme Court, the parties may be permitted to compound the offence and
the conviction of the petitioner be set aside.
20. Per contra, the learned counsel who appeared for the State and assisted
this Court in the matter, has vehemently opposed the submissions made by the learned
counsel for the Revision Petitioner and submits that the Revision Petitioner has
already been convicted by the learned trial court and the conviction order had already
been upheld by the Appellate Court in the appeal.
21. The learned counsel for the respondent further submitted that the appeal
has been rejected on merit and the Revision Petitioner was convicted, then where the
parties or any one of them can be permitted to place compromise and to get the order
of acquittal from the Court is the question. He further submitted that the present case
is nothing, but a gross misuse of the process of law and thus sentence cannot be
compounded on the basis of compromise as filed by the parties.
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22. I have heard the learned counsel for the Revision Petitioner, learned counsel
for the respondent .
23. Considering the facts as narrated above, the following question arose for
consideration.
‘Whether the order passed by the Appellate Court confirming the
conviction of the trial court under section 138 of Negotiable Instruments
Act can be nullified by the High Court on the basis of compromise
entered between the parties’
24. Before answering the aforesaid question as framed, I shall examine the
relevant provision of the Cr.P.C., as well as the Negotiable Instrument Act. I may
extract Section 320 of Cr.P.C., and section 147 of Negotiable Instruments Act.
Section 320 Cr.P.C. – Compounding of Offences –
1) The offences punishable under the sections of the Indian Penal
Code (45 of 1860), specified in the first two columns of the Table
next following may be compounded by the persons mentioned in the
third column of that Table –
2) The offences punishable under the Sections of the Indian Penal
Code (45 of 1860), specified in the first two columns of the Table
next following may, with the permission of the Court before which
any prosecution for such offence is pending be compounded by the
persons mentioned in the third column of that Table –
3) When any offence is compoundable under this section, the
abetment of such offence or an attempt to commit such offence
(when such attempt is itself an offence) may be compounded in like
manner.
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4) (a) When the person who would otherwise be competent to
compound an offence under this section is under the age of
eighteen years or is an idiot or a lunatic, any person competent to
contract on his behalf may, with the permission of the Court,
compound such offence.
(b) When the person who would otherwise be competent to
compound an offence under this section is dead, the legal
representative, as defined in the Code of Civil Procedure, 1908 (5
of 1908) of such person may, with the consent of the Court,
compound such offence.
5) When the accused has been committed for trial or when he has
been convicted and an appeal is pending, no composition for the
offence shall be allowed without the leave of the Court to which he
is committed, or as the case may be, before which the appeal is to
be heard.
6) A High Court or Court of Session acting in the exercise of its
powers of revision under Section 401 may allow any person to
compound any offence which such person is competent to
compound under this section.
7) No offence shall be compounded if the accused is, by reason of a
previous conviction, liable either to enhanced punishment or to a
punishment of a different kind for such offence.
8) The composition of an offence under this section shall have the
effect of an acquittal of the accused with whom the offence has
been compounded.
9) No offence shall be compounded except as provided by this
section.
Section 147 of the Negotiable Instrument Act :’
“Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), every offence punishable under this Act
shall be compoundable.”
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25. I have to refer the compromise deed which is on the record for proper
adjudication :-
“JOINT COMPROMISE MEMO’
‘The Petitioner/Sole Accused and the respondent/complainant above
named, most respectfully submits as follows:
1. The petitioner preferred the above Criminal Revision Petition against
the judgment passed in C.A.No.11 of 2022 dated 16.07.2024 on the file
of the Principal District and Sessions Judge, Ariyalur by confirming the
judgment passed in S.T.C.No.425 of 2019 dated 10.08.2022 on the file of
the District Munsif Cum Judicial Magistrate, Sendurai, Ariyalur
District.
2. This Hon’ble Court vide its order dated 18.11.2024 made in
Crl.M.P.No.15170 of 2024 suspended the sentence imposed on the
petitioner with a condition to deposit20% of the cheque amount (i.e.)
Rs.2,00,000/-. The said conditional order was not honoured by the
petitioner herein. Ultimately, this Hon’ble Court by its order dated
12.06.2026 directed the trial court to secure the presence of the
petitioner.
3. Accordingly, the trial court secured the petitioner and remanded him
to judicial custody on 27.06.2026 and currently the petitioner is
confined at Central Prison, Trichy.
4. It is most respectfully submitted due to intervention of both the
family members the issue between the petitioner and the respondent was
amiably settled out of court and the entire amount payable to the
respondent by the petitioner settled and the respondent acknowledged
the same. Both the parties are now having no subsisting grievance
against each other. Due to compromise the respondent is willing to
withdraw the complainant given as against the petitioner in
S.T.C.No.425 of 2019 dated 10.08.2022 on the file of the District Munsif
cum Judicial Magistrate, Sendurai, Ariyalur District and therefore seeks
this Hon’ble Court to set aside the judgment passed in C.A.No.11 of
2022 dated 16.07.2024 on the file of the Principal District and Sessions
Judge, Ariyalur by confirming the judgment passed in S.T.C.No.425 ofhttps://www.mhc.tn.gov.in/judis
2019 dated 10.08.2022 on the file of the District Munsif cum Judicial
Magistrate, Sendurai, Ariyalur District the criminal proceedings in
Crl.R.C.No.1848 of 2024 pending on the file of this Hon’ble Court.
5. It is further submitted that this compromise is entered between the
parties voluntarily without any coercion, threat, or undue influence, and
further undertake to appear before this Hon’ble Court to affirm the
same.
6. This Hon’ble Court may be pleased to record this Joint Memo of
Compromise and set aside the judgment passed in C.A.No.11 of 2022
dated 16.067.2024 on the file of the Principal District and Sessions
Judge, Ariyalur by confirming the judgment passed in S.T.C.No.425 of
2019 dated 10.08.2022 on the file of the District Munsif cum Judicial
Magistrate, Sendurai, Ariyalur District in the interest of justice.
It is therefore prayed that this Hon’ble Court may be pleased to set
aside the judgment passed in C.A.No.11 of 2022, dated 16.07.2024 on
the file of the Principal District and Sessions Judge, Ariyalur, by
confirming the judgment passed in S.T.C.No.425 of 2019, dated
10.08.2022 on the file of the District Munsif Cum Judicial Magistrate,
Sendurai, Ariyalur District and allow the Crl.R.C.No.1848 of 2024
pending on the file of this Hon’ble Court and pass further orders as may
be deem fit in the facts and circumstances of the case and thus render
justice.’
26. It is well settled that inherent power of the Court can be exercised only
when no other remedy is available to the litigants and nor a specific remedy as
provided by the statute. It is also well settled that if an effective, alternative remedy is
available, the High Court will not exercise its inherent power, especially when the
Revision Petitioner may not have availed of that remedy. The power can be exercised
by the High Court to secure the ends of justice, prevent abuse of the process of any
court and to make such orders as may be necessary to give effect to any order under
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this Code or Act, depending upon the facts of the given case. This Court can always
take note of any miscarriage of justice and prevent the same by exercising its power.
These powers are neither limited, nor curtailed by any other provision of the Code or
Act. However, such inherent powers are to be exercised sparingly and with caution
27. In the instant case, it is true that the appeal was dismissed and the
conviction and sentence was upheld by the appellate court, but it cannot be lost sight
of the fact that this Court has power to intervene in exercise of its power only with a
view to do the substantial justice or to avoid a miscarriage and the spirit of
compromise arrived at between the parties. This is perfectly justified and legal too.
28. I have considered the judgments cited by the learned counsel for the
Revision Petitioner as well as by the learned Counsel for the State and other decisions
of the Hon’ble Apex Court and I do not think it necessary to enlist those decisions
which are taken into consideration for the purpose of the present proceedings.
29. In the instant case, the Revision Petitioner is invoking the inherent power of
this court after dismissal of the appeal confirming his conviction and sentence. In
these circumstances, I have to examine as to whether for entertaining the aforesaid
case, any special circumstances are made out or not, so it can be legitimately argued
and inferred and held that in all cases where the Revision Petitioner is able to satisfy
this Court that there are special circumstances which can be clearly spelt out
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subsequent proceeding invoking inherent power of this court can be modified and
cannot be thrown away on that technical argument as to its sustainability once the
contesting parties entered into subsequent compromise.
30. In the case of Krishan Vs. Krishnaveni, reported in (1997) 4 SCC 241,
Hon’ble the Apex Court has held that though the inherent power of the High Court is
very wide, yet the same must be exercised sparingly and cautiously particularly in a
case where the applicant is shown to have already invoked the revisional jurisdiction
under section 397 of the Code. Only in cases where the High Court finds that there
has been failure of justice or misuse of judicial mechanism or procedure, sentence or
order was not correct, the High Court may in its discretion prevent the abuse of
process or miscarriage of justice by exercising its power.
31. In the case of S.W. Palankattkar & others Vs. State of Bihar, 2002 (44)
ACC 168, it has been held by the Hon’ble Apex Court that quashing of the criminal
proceedings is an exception than a rule. The inherent powers of the High Court itself
envisages three circumstances under which the inherent jurisdiction may be
exercised:-(i) to give effect an order under the Code, (ii) to prevent abuse of the
process of the court ; (iii) to otherwise secure the ends of justice. The power of High
Court is very wide but should be exercised very cautiously to do real and substantial
justice for which the court alone exists.
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32. For adjudicating the instant case, the facts as stated herein above are very
relevant. Here, the Revision Petitioner has attempted to invoke the jurisdiction of this
court.
33. I am not in agreement that when the adjudication of a criminal offence has
reached to the state of revisional level, there cannot be any compromise without
permission of the court in all case including the offence punishable under ‘N.I. Act‘ or
the offence mentioned in Table-1 (one) can be compounded only if High Court or
Court of Sessions grants permission for such purpose. The Court presently, concerned
with an offence punishable under ‘N.I. Act‘.
34. It is evident that the permissibility of the compounding of an offence is
linked to the perceived seriousness of the offence and the nature of the remedy
provided. On this point I can refer to the following extracts from an academic
commentary [Cited from : K.N.C. Pillai, R.V. Kelkar’s Criminal
Procedure, 5th Edition :
“17.2 – compounding of offences – A crime is essentially a wrong
against the society and the State. Therefore, any compromise between
the accused person and the individual victim of the crime should not
absolve the accused from criminal responsibility. However, where the
offences are essentially of a private nature and relatively not quitehttps://www.mhc.tn.gov.in/judis
serious, the Code considers it expedient to recognize some of them as
compoundable offences and some others as compoundable only with
the permission of the court…”
35. Section 147 of NI Act begins with a non obstante clause and such clause
is being used in a provision to communicate that the provision shall prevail
despite anything to the contrary in any other or different legal provisions. So, in
light of the compass provided, a dispute in the nature of complaint under section
138 of N.I. Act, can be settled by way of compromise irrespective of any other
legislation including Cr.P.C. In general and section 320 (1)(2) or (6) of the
Cr.P.C. in particular. The scheme of section 320 Cr.P.C. deals mainly with
procedural aspects; but it simultaneously crystallizes certain enforceable rights
and obligation. Hence, this provision has an element of substantive legislation
and therefore, it can be said that the scheme of section 320 does not lay down
only procedure; but still, the status of the scheme remains under a general law of
procedure and as per the accepted proposition of law, the special law would
prevail over general law. For the sake of convenience, I would like to quote the
observations of Hon’ble the Apex Court in the case of Municipal Corporation,
Indore vs. Ratnaprabha reported in (AIR 1977 SC 308) which reads as under :
“As has been stated, clause (b) of section 138 of the Act provides
that the annual value of any building shall “notwithstanding
anything contained in any other law for the time being in force” be
deemed to be the gross annual rent for which the building might
“reasonably at the time of the assessment be expected to be let fromhttps://www.mhc.tn.gov.in/judis
year to year” While therefore, the requirement of the law is that the
reasonable letting value should determine the annual value of the
building, it has also been specifically provided that this would be so
“notwithstanding anything contained in any other law for the time
being in force”. It appears to us that it would be a proper
interpretation of the provisions of clause (b) of Section 138 of the
Act to hold that in a case where the standard rent of a building has
been fixed under Section 7 of the Madhya Pradesh Accommodation
Control Act, and there is nothing to show that there has been fraud
or collusion, that would be its reasonable letting value, but, where
this is not so, and the building has never been let out and is being
used in a manner where the question of fixing its standard rent does
not arise, it would be permissible to fix its reasonable rent without
regard to the provisions of the Madhya Pradesh Accommodation
Control Act, 1961. This view will, in our opinion, give proper effect
to the non-obstante clause in clause (b) with due regard to its other
provision that the letting value should be “reasonable”
36. The expression ‘special law’ means a provision of law, which is not
applicable generally but which applies to a particular or specific subject or class of
subjects. Section 41 of Indian Penal Code stands on the same footing and defines the
phrase special law. In this connection I would like to quote the well accepted
proposition of law emerging from various observations made by the Hon’ble Apex
Court in different decisions as a gist of the principle and it can be summarised as
under:
“When a special law or a statute is applicable to a particular
subject, then the same would prevail over a general law with
regard to the very subject, is the accepted principle in the field of
interpretation of statute.”
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37. In reference to offence under section 138 of N.I. Act read with section
147 of the said Act, the parties are at liberty to compound the matter at any stage
even after the dismissal of the revision/appeal. Even a convict undergoing
imprisonment with the liability to pay the amount of fine imposed by the court
and/or under an obligation to pay the amount of compensation if awarded, as per
the scheme of N.I. Act, can compound the matter. The complainant i.e. person or
persons affected can pray to the court that the accused, on compounding of the
offence may be released by invoking jurisdiction of this court. If the parties are
asked to approach the Apex Court then, what will be situation, is a question
which is required to be considered in the background of another accepted
progressive and pragmatic principle accepted by our courts that if possible, the
parties should be provided justice at the door step. The phrase “justice at the
door step” has taken the court to think and reach to a conclusion that it can be
considered and looked into as one of such special circumstances for the purpose
of compounding the offence under section 147 of the N. I. Act.
38. It is also well settled that the operation or effect of a general Act may be
curtailed by special Act even if a general Act contains a non obstante clause. But here
is not a case where the language of section 320 Cr.P.C. would come in the way in
recording the compromise or in compounding the offence punishable under section
138 of the N.I. Act. On the contrary provisions of section 147 of N.I. Act though starts
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with a non obstante clause, is an affirmative enactment and this is possible to infer
from the scheme that has overriding effect on the intention of legislature reflected in
section 320 Cr.P.C.
39. Merely because the litigation has reached to a revisional stage or that even
beyond that stage, the nature and character of the offence would not change
automatically and it would be wrong to hold that at revisional stage, the nature of
offence punishable under Section 138 of the N.I. Act should be treated as if the same
is falling under table-II of Section 320 IPC. I would like to reproduce some part of the
statement of objects and reasons of the Negotiable Instruments (Amendment &
Miscellaneous Provisions) Act, 2002
“The Negotiable Instrument Act 1881 was amended by the
Banking,Public Financial Institutions and Negotiable Instrument Laws
(Amendment) Act, 1988 wherein a new Chapter XVII was incorporated
for penalties in case of dishonour of cheques due to insufficiency of
funds in the account of the drawer of the cheque. These provisions were
incorporated with a view to encourage the culture of use of cheques
and enhancing the credibility of the instrument. The existing provisions
in the Negotiable Instrument Act, 1981, namely Section 138 to 142 in
ChapterXVII have been found deficient in dealing with dishonour of
cheques. Not only the punishment provided in the Act has proved to be
inadequate, the procedure prescribed for the courts to deal with such
matters has been found to be cumbersome. The Courts are unable to
dispose of such cases expeditiously in a time bound manner in view of
the procedure contained in the Act.
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2. A large number of cases are reported to be pending under Sections
138 and 142 of the Negotiable Instruments Act in various courts in the
country. Keeping in view the large number of complaints under the
saidAct, pending in various courts, a Working Group was constituted
to review Section 138 of the Negotiable Instruments Act, 181 and make
recommendations as to what changes were needed to effectively
achieve the purpose of that Section.
3. ……….…
4. Keeping in view the recommendations of the Standing Committee on
finance and other R/SCR.A/2491/2018 ORDER representations, it has
been decided to bring out, inter alia the following amendments in the
Negotiable Instrument Act 1881, namely.
(i) xxxxxx
(ii) xxxxxx
(iii) xxxxxx
(iv) to prescribe procedure for dispensing with preliminary evidence of
the complainant.
(v) xxxxxx
(vi) xxxxx
(vii) to make the offences under the Act compoundable. …..…
5. xxxxxx
6. The Bill seeks to achieve the above objects.”
40. In a commentary the following observations have been made with
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regard to offence punishable under section 138 of the N.I. Act. [ Cited from :
Arun Mohan, Some thoughts towards law reforms on the topic of Section 138
Negotiable Instrument Act -Tackling an avalanche of cases] :
“… … Unlike that for other forms of crime, the punishment here (in so
far as the complainant is concerned) is not a means of seeking
retribution,but is more a means to ensure payment of money. The
complainant’s interest lies primarily in recovering the money rather
than seeing the drawer of the cheque in jail. The threat of jail is only a
mode to ensure recovery. As against the accused who is willing to
undergo a jail term, there is little available as remedy for the holder of
the cheque. If we were to examine the number of complaints filed
which were ‘compromised’ or ‘settled’ before the final judgment on one
side and the cases which proceeded to judgment and conviction on the
other, we will find that the bulk was settled and only a miniscule
number continued.”
41. It is quite obvious that with respect to the offence of dishonour of cheques,
it is the compensatory aspect of the remedy which should be given
priority over the punitive aspect.
42. So the intention of the legislature and object of enacting “Banking”, Public
Financial Institutions and the Negotiable Instrument Laws (Amended Act) 1988 and
subsequent enactment, i.e., Negotiable Instruments (Amendment & Miscellaneous
Provisions Act 2002 leads this Court to a conclusion that the offence made punishable
under Section 138 of N.I. Act is not only an offence qua property but it is also of the
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nature of an economic offence, though not covered in the list of statutes enacted in
reference to Section 468 of Cr.P.C. Thus, the parties, in reference to offence under
Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound
the matter at any stage even after the dismissal of the proceedings.
43. In the instant case, the problem herein is with the tendency of litigants to
belatedly choose compounding as a means to resolve their dispute, furthermore, the
arguments on behalf of the counsel for the respondent on the fact that unlike Section
320 Cr.P.C., Section 147 of the Negotiable Instruments Act provides no explicit
guidance as to what stage compounding can or cannot be done and whether
compounding can be done at the instance of the complainant or with the leave of the
court.
44. I am also conscious of the view that judicial endorsement of the above
quoted guidelines as given in the case of Damodar S. Prabhu (supra) could be seen as
an act of judicial law making and therefore an intrusion into the legislative domain. It
must be kept in mind that Section 147 of the Act does not carry any guidance on how
to proceed with the compounding of offences under the Act. I have already explained
that the scheme contemplated under Section 320 of the Cr.P.C. cannot be followed in
the strict sense.
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45. In view of the aforesaid discussion, the parties, in reference to offence
under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to
compound the matter at any stage. The complainant i.e. the person or persons affected
can pray to the court that the accused, on compounding of the offence may be released
by invoking inherent jurisdiction of this Court.
46. Generally, the powers available would not have been exercised when a
statutory remedy under the law is available, however, considering the peculiar set of
facts and circumstances it would not be in the interest of justice to relegate the parties
to the court. Additionally when both the parties have invoked the jurisdiction of this
Court and there is no bar on exercise of powers and the inherent powers of this court
can always be invoked for imparting justice and bringing a quietus to the issue
between the parties.
47. As discussed above, the court is inclined to hold accordingly only because
there is no formal embargo in section 147 of the N.I. Act. This principle would not
help any convict in any other law where other applicable independent provisions are
existing as the offence punishable under section 138 of the N.I. Act is distinctly
different from the normal offences made punishable under Chapter XVII of IPC (i.e.
the offences qua property).
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48. In view of the observations and in view of the guidelines as laid down in
the case of Damodar S. Prabhu (Supra) and also in view of the observations made
in the judgment referred above and taking into account the fact that the parties have
settled the dispute amicably by way of compromise, this Court is of the view that the
compounding of the offence as required to be permitted.
49. Accordingly, the present Criminal Revision Case is disposed of in terms of
Compromise Memo arrived at between the parties to this litigation out of Court. The
Compromise Memo dated 30.06.2026 is taken on record. The impugned conviction
and sentence passed in C.A.No.11 of 2022, dated 16.07.2024 by the learned Principal
District and Sessions Judge, Ariyalur, confirming the conviction and sentence made
in STC.No.425 of 2019, dated 10.08.2022 by the learned District Munsif Cum
Judicial Magistrate, Sendurai, Ariyalur District are hereby modified. The conviction
and sentence under section 138 of the Negotiable Instruments Act in STC.No.425 of
2019 stands anulled as this Court intends, otherwise to secure the ends of justice. The
Revision Petitioner shall be treated as acquitted on account of compounding of the
offence with the complainant/person affected.
50. Office is directed to communicate this order to the learned trial court
concerned immediately.
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51. In the result,
ï‚· The Criminal Revision Case is disposed of in terms of Joint
Compromise Memo dated 30.06.2026. Consequently, the connected
miscellaneous petition is closed.
ï‚· The impugned conviction and sentence passed in C.A.No.11 of 2022,
dated 16.07.2024 by the learned Principal District and Sessions Judge,
Ariyalur, confirming the conviction and sentence made in STC.No.425
of 2019, dated 10.08.2022 by the learned District Munsif cum Judicial
Magistrate, Sendurai, Ariyalur District are hereby modified.
ï‚· The conviction and sentence imposed on the Revision Petitioner by
both the courts below stands anulled.
ï‚· The Revision Petitioner shall be treated as acquitted on account of
compounding of the offence with the complainant/respondent.
 The revision petitioner –Kandasamy, Son of Adai E.Periyasamy is
ordered to be released from jail forthwith without imposing any
conditions.
06.07.2026
msr
Index:yes/no
Internet: Reportable
To
1. The Principal District and Sessions Judge, Ariyalur
2. The District Munsif cum Judicial Magistrate, Sendurai
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3. The Superintendent,
Central Prison, Trichy.
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SHAMIM AHMED, J.
msr
Crl.R.C.No.1848 of 2024 &
Crl.M.P.No.15587 of 2024
06.07.2026
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