Jammu & Kashmir High Court – Srinagar Bench
Budgam vs Budgam on 9 July, 2026
HIGH COURT OF JAMMU & KASHMIR AND LADAKH2026:JKLHC-SGR:218
AT SRINAGAR
CM(M)193/2026
CM 3311/2026
Reserved on:03.06.2026.
Pronounced on:09.07.2026
Uploaded on10.07.2026
Whether operative part or full
judgment has been pronounced: Full
Gulla Ganaie Alias Gulzar Ahmad Ganaie
Aged 67 Years
S/o Assadullah Ganaie
R/o ZazbughShogpora Tehsil and District
Budgam.
...Petitioner(s)
Through: Mr. Irshad Rasheed, Advocate
Vs.
Ghulam Qadir Sheikh
S/o Mohammad Ismail Sheikh
R/o Yarikhah Tehsil Khansahib District
Budgam
...Respondent(s)
Through:
CORAM:
Hon'ble Mr. Justice Wasim Sadiq Nargal, Judge.
JUDGMENT
1) Through the medium of the instant petition filed under Article 227
of the Constitution of India, the petitioner seeks quashment of the
execution proceedings initiated before the Court of the learned Chief
Judicial Magistrate, Budgam vide order dated 17.11.2025, pursuant to the
disposal of the complaint under Section 138 of the Negotiable Instruments
Act, together with the consequential order dated 06.05.2026, whereby the
Page 1 of 17 CM(M) 193/2026
learned Chief Judicial Magistrate directed the complainant to furnish 2026:JKLHC-SGR:218
the
particulars of the petitioner’s property so that appropriate steps could be
taken towards its attachment.
BRIEF FACTS:
2) The factual matrix of the case is that the petitioner has invoked the
supervisory jurisdiction of this Court under Article 227 of the Constitution of
India seeking quashment of the execution proceedings initiated by the
learned Chief Judicial Magistrate, Budgam vide order dated 17.11.2025, and
the consequential order dated 06.05.2026, whereby directions came to be
issued to the complainant to furnish the particulars of the petitioner’s property
for the purposes of attachment in connection with the execution proceedings.
3) The record reveals that the respondent had instituted a complaint
under Section 138 of the Negotiable Instruments Act, 1881 before the
Court of learned Chief Judicial Magistrate, Budgam alleging dishonour of
cheque issued by the petitioner. During the pendency of the said
complaint, the parties entered into a compromise dated 26.07.2024. As per
the terms of the compromise, the petitioner allegedly agreed to pay an
amount of Rs.6.60 lakhs to the respondent whereas the respondent
undertook to provide a patch of land to the petitioner.
4) Pursuant to the compromise, the learned Chief Judicial Magistrate,
Budgam vide order dated 26.07.2024 recorded the statements of the
parties, dismissed the complaint and acquitted the petitioner.
5) According to the petitioner, upon dismissal of the complaint and
acquittal of the accused, the proceedings under Section 138 of the
Page 2 of 17 CM(M) 193/2026
Negotiable Instruments Act stood finally concluded and the learned
2026:JKLHC-SGR:218Magistrate became functus officio.
6) The grievance of the petitioner is that despite culmination of the
criminal proceedings, the respondent instituted execution proceedings
before the learned Chief Judicial Magistrate alleging breach of the
compromise. The learned Chief Judicial Magistrate entertained the same
vide order dated 17.11.2025 and thereafter passed the consequential order
dated 06.05.2026 directing the complainant to furnish the particulars of
the petitioner’s property for the purposes of attachment.
7) Aggrieved thereof, the petitioner has approached this Court
contending that the impugned proceedings are wholly without jurisdiction
and constitute an abuse of the process of law.
SUBMISSIONS ON BEHALF OF PETITIONER:
8) Learned counsel for the petitioner submits that the learned Chief
Judicial Magistrate lacked inherent jurisdiction to entertain execution
proceedings after dismissal of the complaint and acquittal of the petitioner.
It is contended that once the complaint under Section 138 of the
Negotiable Instruments Act stood disposed of vide order dated
26.07.2024, no proceedings survived before the criminal court and the
learned Magistrate became functus officio.
9) It is further submitted that the order dated 26.07.2024 merely records
the compromise arrived at between the parties and the consequential
acquittal of the petitioner. The said order does not contain any executable
Page 3 of 17 CM(M) 193/2026
direction, adjudication, decree, recovery certificate or order 2026:JKLHC-SGR:218
of
compensation capable of being enforced through coercive process.
10) Learned counsel argues that a compromise entered into between
private parties during pendency of criminal proceedings does not acquire the
status of an executable decree merely because it has been placed before a
criminal court. Any alleged breach of the compromise may furnish an
independent cause of action but cannot be enforced by way of execution
proceedings before a criminal court after disposal of the complaint.
11) Reliance is placed upon the judgment of the Hon‟ble Supreme
Court in ‘M/s Gimpex Private Limited v. Manoj Goel‘, (2022) 11 SCC
705, to contend that once a settlement is arrived at between the parties,
rights and obligations thereafter flow from the settlement itself and not
from the original complaint proceedings. It is submitted that the remedy
for breach of settlement lies elsewhere and not by seeking execution of
concluded criminal proceedings.
12) Reliance is also placed upon ‘Lalit Kumar Sharma v. State of Uttar
Pradesh‘,(2008) 5 SCC 638, to contend that obligations arising out of a
compromise constitute fresh and independent obligations and any dispute
regarding their performance requires adjudication in accordance with law.
13) It is next submitted that attachment of property is a coercive process
available only where specifically authorized by law. In the absence of any
order imposing fine, compensation or any executable monetary liability,
the learned Magistrate could not have directed attachment of the
petitioner‟s property.
Page 4 of 17 CM(M) 193/2026
14) Learned counsel further submits that the compromise itself
2026:JKLHC-SGR:218
contemplated reciprocal obligations on the part of the respondent
regarding provision of a patch of land. Questions relating to performance
of reciprocal promises, breach, readiness and willingness are disputed
questions requiring adjudication before a competent forum and cannot be
summarily determined in execution proceedings before a criminal court.
15) Accordingly, it is argued that the impugned proceedings and order
dated 06.05.2026 are wholly without jurisdiction, coram non judice and
liable to be quashed in exercise of supervisory jurisdiction under Article
227 of the Constitution of India.
16) Heard learned counsel for the parties and perused the record.
LEGAL ANALYSIS:
17) Before adverting to the merits of the controversy, it is considered
appropriate to clarify certain apparent drafting errors occurring in the writ
petition. A perusal of the record reveals that though the petition describes
the learned Chief Judicial Magistrate, Budgam as respondent No. 1 and
the original complainant as respondent No. 2, the only contesting
respondent in the present proceedings is the original complainant, namely
Ghulam Qadir Sheikh S/o Mohammad Ismail Sheikh, R/o Yarikhah,
Tehsil Khansahib, District Budgam. Accordingly, all references to
respondent No. 2 in the present judgment shall be construed as references
to the said respondent. It is further noticed that the petition seeks
quashment of the order dated 04.05.2026. However, the record reveals that
the order impugned is in fact the order dated 06.05.2026, which is
Page 5 of 17 CM(M) 193/2026
consequential to and emanates from the execution proceedings initiated
2026:JKLHC-SGR:218vide order dated 17.11.2025. Accordingly, wherever the order dated
04.05.2026 finds mention in the petition or in this judgment, the same
shall be read as a reference to the order dated 06.05.2026.
18) The principal question which arises for consideration in the present
petition is whether, after recording the compromise between the parties,
dismissing the complaint under Section 138 of the Negotiable Instruments
Act and acquitting the petitioner vide order dated 26.07.2024, the learned
Chief Judicial Magistrate retained jurisdiction to subsequently entertain
execution proceedings and direct attachment of the petitioner’s property on
the allegation that the terms of the settlement had not been complied with.
19) It is not in dispute that the offence under Section 138 of the
Negotiable Instruments Act is compoundable. Once the parties voluntarily
settle their dispute and place such settlement before the criminal court, it is
open to the Court to record the compromise and dispose of the complaint
accordingly. Upon acceptance of the compromise and passing of a final
order disposing of the complaint, the criminal proceedings attain finality.
20) The doctrine of functus officio embodies the settled principle that
once a court has finally exercised the jurisdiction vested in it and
pronounced its final order, it ceases to possess any further authority over
the proceedings except to the extent specifically authorised by law. The
doctrine ensures certainty and finality in judicial proceedings and prevents
a court from reopening matters after its jurisdiction has been exhausted.
Page 6 of 17 CM(M) 193/2026
21) Applying the aforesaid principle to the present case, it is evident
2026:JKLHC-SGR:218
that after recording the statements of the parties regarding the
compromise, the learned Chief Judicial Magistrate dismissed the
complaint under Section 138 of the Negotiable Instruments Act and
formally acquitted the petitioner vide order dated 26.07.2024. Upon
passing the said order, the criminal proceedings stood concluded and the
learned Magistrate became functus officio. Thereafter, the criminal Court
ceased to possess any continuing jurisdiction over the complaint and could
not thereafter reopen the proceedings unless such power was specifically
traceable to a statutory provision.
22) At the same time, while disposing of a complaint on the basis of a
compromise, the proper course ordinarily is not merely to record that the
dispute has been amicably settled and proceed to acquit the accused. The
court ought to incorporate the material terms of the settlement into the
judicial order, hold the parties bound by the obligations undertaken by
them and, wherever the settlement contemplates payment of money,
clearly stipulate that in the event of default, the agreed amount shall be
recoverable in accordance with the procedure prescribed under law. Such
a course ensures that the judicial order itself becomes capable of
enforcement in accordance with law.
23) The aforesaid procedure has also been authoritatively explained by
the Division Bench of the High Court of Delhi in ‘Dayawati v. Yogesh
Kumar Gosain‘, 2017 SCC ONLINE DEL 11032, wherein the Court
laid down the manner in which a criminal court is required to deal with a
settlement arrived at between the parties in proceedings under Section 138
Page 7 of 17 CM(M) 193/2026
of the Negotiable Instruments Act. The relevant observations 2026:JKLHC-SGR:218
are
reproduced hereunder:
“III (xiv) Pursuant to recording of the statement of the parties, the
magistrate should specifically accept the statement of the parties as
well as their undertakings and hold them bound by the terms of the
settlement entered into by and between them. This order should clearly
stipulate that in the event of default by either party, the amount agreed
to be paid in the settlement agreement will be recoverable in terms of
Section 431 read with Section 421 of the Cr.P.C.”
24) The aforesaid direction clearly demonstrates that the power of
recovery contemplated under Sections 421 and 431 of the Code can
ordinarily be invoked only where, while disposing of the complaint, the
criminal court has expressly accepted the undertakings of the parties, held
them bound by the terms of the settlement and specifically provided that,
in the event of default, the agreed amount shall be recoverable in
accordance with Sections 431 and 421 of the Code. Admittedly, no such
direction finds place in the order dated 26.07.2024 passed by the learned
Chief Judicial Magistrate.
25) The aforesaid principle has been reiterated by the High Court of
Delhi in „Professional Technical Services v. Pavitra Milk Products Pvt.
Ltd. & Ors.’, CRL.M.C. No. 1105/2019, decided on 19.08.2025, wherein,
after considering the decision of the Hon‟ble Division Bench in Dayawati,
the Court explained the circumstances in which a settlement under Section
138 of the Negotiable Instruments Act becomes enforceable through
Sections 431 and 421 of the Code of Criminal Procedure. The relevant
observations are reproduced hereunder:
Page 8 of 17 CM(M) 193/2026
“16. The Division Bench in Dayawati authoritatively settled the 2026:JKLHC-SGR:218
procedure to be followed in cheque dishonour complaints where
mediation results in a settlement. A bare reading of the aforesaid
extract reveals that Division Bench, after an exhaustive analysis of the
legal position, observed that a mediated settlement in criminal
compoundable offences, before the Mediation Centre, has the same
binding effect as any lawful agreement. Upon being placed before the
Court, it can be acted upon, as a final order, in the nature of
compounding. The judgment, however, makes it clear that the
enforceability of such settlement is contingent upon the Court
accepting the terms of the settlement and also recording that the
settlement has arrived at voluntary, with the consent of the parties.
Once this satisfaction is recorded, the Court is required to pass a
judicial order accepting the settlement and incorporating its terms,
including any payment obligations under Section 147 of the NI Act.
Only upon such an order being passed, signifying the Court’s
imprimatur, can the agreed sum be treated as an amount payable
under an order of a criminal court.
17. The Division Bench further clarified that where a mediated
settlement has been accepted and recorded by the Court, any breach
of its terms by one of the parties, particularly the accused, cannot be
permitted to frustrate the settlement or evade compliance. In such
cases, the Court is empowered to enforce the undertaking through
appropriate legal mechanisms, including proceedings under Section
431 read with Section 421 of Cr.P.C and, where applicable, contempt
jurisdiction. However, in the absence of a judicial order accepting the
mediated settlement, no enforceable rights arise under the criminal
process and the aggrieved party must seek other appropriate remedies
in accordance with law.
22. ….These clauses, when read with the ruling of the Division Bench
in Dayawati, make it evident that, absent judicial affirmation and
incorporation into a formal order, the Agreement, even if concluded
through mediation, remains a private contractual arrangement. It
cannot be clothed with the enforceability contemplated under Section
431 read with Section 421 of Cr.P.C.”
26) The aforesaid exposition of law fortifies the principle that the power
of recovery under Sections 421 and 431 of the Code does not arise merely
Page 9 of 17 CM(M) 193/2026
because the parties have entered into a settlement. Such power becomes
2026:JKLHC-SGR:218
available only where the settlement has received the judicial imprimatur of
the criminal court by way of an order accepting the settlement,
incorporating its terms and rendering the agreed amount payable under a
judicial direction. In the absence of such an order, the settlement continues
to remain a private arrangement and any remedy for its breach must be
worked out in accordance with law before the appropriate forum.
27) Having noticed the procedure prescribed by the Hon‟ble Division
Bench in Dayawati (supra), it would now be appropriate to examine the
statutory provisions governing recovery by a criminal court. Sections 421
and 431 of the Code of Criminal Procedure, which assume significance in
the present controversy, are reproduced hereunder:
“421. Warrant for levy of fine.
(1)When an offender has been sentenced to pay a fine, the Court
passing the sentence may take action for the recovery of the fine in
either or both of the following ways, that is to say, it may –
(a)issue a warrant for the levy of the amount by attachment and sale of
any movable property belonging to the offender;
(b)issue a warrant to the Collector of the district, authorizing him to
realize the amount as arrears of land revenue from the movable or
immovable property, or both, of the defaulte…”
“431. Money ordered to be paid recoverable as a fine.
Any money (other than a fine) payable by virtue of any order made
under this Code and the method of recovery of which is not otherwise
expressly provided for, shall be recoverable as if it were a fine
:Provided that Section 421 shall, in its application to an order under
Section 359, by virtue of this section, be construed as if in the proviso
to sub-section (1) of Section 421, after the words and figures “under
Section 357”, the words and figures “or an order for payment of costs
under Section 359″ had been inserted.”
28) A conjoint reading of the aforesaid provisions makes it manifest
that the coercive modes of recovery contemplated therein become
Page 10 of 17 CM(M) 193/2026
available only where the amount sought to be recovered is payable under a
2026:JKLHC-SGR:218
lawful judicial order passed by the criminal court in accordance with the
provisions of the Code. Sections 421 and 431 regulate the mode and
manner of recovery of such amounts; they cannot, in the absence of an
executable judicial direction, be invoked to enforce the terms of every
private compromise or settlement entered into between the parties.
29) The next question, therefore, is whether the order dated 26.07.2024
passed by the learned Chief Judicial Magistrate contains any executable
judicial direction so as to attract the aforesaid statutory provisions. In
order to answer this question, it would be apposite to reproduce the order
dated 26.07.2024, which reads as under:
“Parties along with their counsels present. The parties express that
they have entered into a compromise and compromise agreement
was presented in open court. The contents of the compromise
agreement have been read over to the parties who have
comprehended the same and have admitted its execution. The
statements of the parties were recorded as per the compromise. The
parties were identified by their respective counsels. As such the
instant complaint doesn’t require further proceedings which is
dismissed as per the compromise. The accused is acquitted of the
allegation. File be consigned to records after its compilation.”
30) A plain reading of the aforesaid order reveals that the learned
Chief Judicial Magistrate merely recorded the statements of the parties,
noticed that they had amicably settled their dispute and, on that basis,
dismissed the complaint and acquitted the accused. Significantly, the
order neither incorporates the terms and conditions of the settlement into
its operative portion nor holds the parties bound by the terms thereof.
More importantly, it neither stipulates the consequences of default nor
Page 11 of 17 CM(M) 193/2026
declares that the agreed amount shall be recoverable in accordance with
2026:JKLHC-SGR:218
Sections 421 and 431 of the Code of Criminal Procedure. Consequently,
the order does not contain any executable judicial direction capable of
enforcement through the coercive machinery contemplated under the said
provisions.
31) In these circumstances, once the complaint stood dismissed and the
petitioner stood acquitted, the learned Chief Judicial Magistrate became
functus officio. The omission to incorporate the settlement terms or the
consequences of default into the order dated 26.07.2024 could not
subsequently be cured by reopening the concluded proceedings or by
assuming jurisdiction which had already stood exhausted upon passing of
the final order.
32) It is equally well settled that jurisdiction cannot be created by
implication or assumed on equitable considerations. A criminal court
derives its authority solely from statute. Once its jurisdiction in the
proceedings has been exhausted by passing a final order, it cannot
thereafter exercise powers which were required to be exercised, if at all,
before disposal of the complaint.
33) At this stage, it is also necessary to distinguish a compromise
recorded by a criminal court from an award passed by a Lok Adalat. An
award of a Lok Adalat is, by virtue of the statutory provisions governing
such proceedings, deemed to be a decree of a civil court and is executable
accordingly. A compromise recorded while disposing of a complaint
under Section 138 of the Negotiable Instruments Act does not, merely by
reason of its recording, acquire the status of a civil court decree. Its
Page 12 of 17 CM(M) 193/2026
enforceability depends upon the nature of the judicial order passed by 2026:JKLHC-SGR:218
the
criminal court.
34) In the present case, the order dated 26.07.2024 contains no
executable judicial direction. Neither was any fine imposed nor any
compensation directed to be recovered as if it were a fine. Equally, no
amount was declared recoverable in accordance with Sections 421 and
431 of the Code. In the absence of such an executable judicial direction
contained in the order dated 26.07.2024, there remained no judicial
command capable of being enforced through the machinery contemplated
under Sections 421 and 431 of the Code.
35) In the present case, the execution proceedings initiated vide order
dated 17.11.2025, culminating in the consequential order dated
06.05.2026, were commenced after the learned Chief Judicial Magistrate
had already exhausted the jurisdiction vested in the criminal court in
relation to the complaint under Section 138 of the Negotiable Instruments
Act. In the absence of any executable judicial direction contained in the
order dated 26.07.2024, the assumption of jurisdiction to enforce the
settlement by entertaining execution proceedings and invoking coercive
measures for its enforcement was wholly without the authority of law.
Consequently, the said proceedings cannot be sustained.
36) Learned counsel for the petitioner has placed reliance upon the
judgment of the Hon’ble Supreme Court in ‘M/s Gimpex Private Limited
v. Manoj Goel‘, (2022) 11 SCC 705, to contend that once the parties
entered into a settlement, the criminal court ceased to possess jurisdiction
to entertain any further proceedings arising therefrom. The said judgment,
Page 13 of 17 CM(M) 193/2026
in the considered opinion of this Court, requires to be appreciated in2026:JKLHC-SGR:218
its
proper perspective.
37) In M/s Gimpex Private Limited (supra), the Hon’ble Supreme Court
examined the legal effect of a settlement entered into during the pendency
of proceedings under Section 138 of the Negotiable Instruments Act. The
Court held that once such a settlement is arrived at, the settlement
agreement subsumes the original complaint and any breach thereof gives
rise to a fresh cause of action attracting such remedies as may be available
under law.
38) The aforesaid judgment, however, does not lay down that a criminal
court, after finally disposing of the complaint and acquitting the accused,
retains an inherent jurisdiction to enforce the terms of the settlement by
way of execution proceedings. Equally, it does not hold that the rights
flowing from the settlement become extinguished upon disposal of the
complaint. The decision merely recognises that breach of the settlement
gives rise to an independent cause of action and that the aggrieved party
may avail such remedies as are otherwise permissible under law.
39) Thus, the judgment in M/s Gimpex Private Limited (supra) does not
support the proposition that the learned Chief Judicial Magistrate retained
jurisdiction to enforce the compromise through execution proceedings
after finally disposing of the complaint. At the same time, it recognises
that the respondent is at liberty to pursue such remedy or remedies as may
otherwise be available in law.
Page 14 of 17 CM(M) 193/2026
40) Thus, the ratio of M/s Gimpex Private Limited (supra) does 2026:JKLHC-SGR:218
not
advance the case of either party to the extent canvassed before this Court.
While it does not support continuation of execution proceedings before a
criminal court which has already become functus officio, it equally does
not foreclose the remedies which may otherwise be available to an
aggrieved party on account of the alleged breach of the settlement.
41) Learned counsel for the petitioner has also placed reliance upon the
judgments in ‘Lalit Kumar Sharma v. State of Uttar Pradesh‘, (2008) 5
SCC 638, and „M/s. Meters and Instruments Private Limited v.
Kanchan Mehta‘, (2018) 1 SCC 560. Those decisions arose in entirely
different factual and legal contexts. Neither of them considers the precise
question which arises for determination in the present case, namely,
whether a criminal court, after dismissing a complaint under Section 138 of
the Negotiable Instruments Act on the basis of a compromise and acquitting
the accused, can subsequently entertain execution proceedings in the
absence of an executable judicial direction contained in the final order.
42) In view of the discussion made hereinabove, this Court is of the
considered opinion that the learned Chief Judicial Magistrate, after
dismissing the complaint and acquitting the petitioner vide order dated
26.07.2024, had exhausted the jurisdiction vested in the criminal court in
relation to the proceedings under Section 138 of the Negotiable Instruments
Act. In the absence of any executable judicial direction contained in the said
order, the subsequent execution proceedings culminating in the impugned
order dated 06.05.2026 could not have been initiated.
Page 15 of 17 CM(M) 193/2026
43) Consequently, the impugned execution proceedings cannot 2026:JKLHC-SGR:218
be
sustained, not because the compromise itself has ceased to exist or become
unenforceable, but because the learned Chief Judicial Magistrate lacked
jurisdiction to enforce the same after having become functus officio upon
disposal of the complaint.
44) This Court has consciously refrained from expressing any opinion
on the validity of the compromise dated 26.07.2024, the alleged breach
thereof, or the respective rights and obligations of the parties arising
therefrom. Those questions do not arise for consideration in the present
proceedings and are, therefore, left open.
45) It shall, accordingly, be open to the respondent to avail such remedy or
remedies as may be otherwise available under law. Any such proceedings, if
initiated, shall be considered and decided by the competent forum on their
own merits and in accordance with law, without being influenced by any
observation made in the present judgment except to the extent of the findings
recorded on the issue of jurisdiction of the learned Chief Judicial Magistrate
to entertain the impugned execution proceedings.
CONCLUSION:
46) Accordingly, in exercise of the supervisory jurisdiction vested in
this Court under Article 227 of the Constitution of India, the petition is
partly allowed. The execution proceedings initiated before the Court of the
learned Chief Judicial Magistrate, Budgam vide order dated 17.11.2025,
together with the consequential order dated 06.05.2026, are hereby
quashed.
Page 16 of 17 CM(M) 193/2026
47) It is, however, clarified that this Court has not expressed 2026:JKLHC-SGR:218
anyopinion on the validity of the compromise dated 26.07.2024, the alleged
breach thereof, or the respective rights and obligations of the parties
arising therefrom. The respondent shall be at liberty to avail such remedy
or remedies as may be otherwise available under law. All questions
relating to the maintainability of such proceedings and the rights of the
parties are expressly left open to be determined by the competent forum in
accordance with law.
48) The petition stands disposed of in the above terms. Interim
direction(s), if any, shall stand vacated. Pending application(s), if any,
shall also stand disposed of.
(Wasim Sadiq Nargal)
Judge
Jammu:
09.07.2026
“Nikhil”
Whether Judgment is Speaking? Yes
Whether Judgment is Reportable? Yes
Page 17 of 17 CM(M) 193/2026
