Punjab-Haryana High Court
Usha Devi vs Vijay Garg on 18 May, 2026
CRM-M-17647-2024 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CRM-M-17647-2024
Reserved on:-15.05.2026
Pronounced on:-18.05.2026
Uploaded on:- __________
Whether only operative part of the judgment is
Pronounced or the full judgment is pronounced: operative part/full judgment
USHA DEVI ...Petitioner
Versus
VIJAY GARG ....Respondent
CORAM: HON'BLE MS. JUSTICE MANDEEP PANNU
Present:- Mr. Keshv Pratap Singh, Advocate
Mr. Himanshu Sharma, Advocate
Mr. Sushil K. Bhardwaj, Advocate and
Mr. C.S. Pasricha, Advocate
for the petitioner.
Ms. Mehak Sawhney, Advocate
for the respondent.
*****
MANDEEP PANNU, J.
1. This is a petition under Section 482 Cr.P.C. for quashing of
order dated 08.01.2024 (Annexure P-3) passed by the learned Judicial
Magistrate First Class, Gurugram in complaint case No. NACT/7403/2018,
whereby the application moved by the petitioner for compounding of the
offence under Section 138 of the Negotiable Instruments Act on the basis of
settlement was dismissed. A further prayer has also been made for staying
the proceedings in the aforesaid complaint case during the pendency of the
present petition.
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2. In a complaint filed under Section 138 of the Negotiable
Instruments Act by respondent/complainant Vijay Garg against the
petitioner/accused Usha Devi, an application under Section 147 of the
Negotiable Instruments Act was moved on behalf of the petitioner seeking
compounding of the offence on the basis of settlement arrived at between the
parties. In the said application, it was averred that the parties had already
settled the matter on 20.05.2019 and the petitioner was making payment of
the settled amount as per the agreed schedule. It was further stated that due
to the outbreak of COVID-19 pandemic, the financial condition of the
petitioner was adversely affected and the payment schedule could not be
adhered to. The petitioner further averred that she was a senior citizen and
not keeping good health and was ready to pay the settled amount along with
interest on the balance amount. It was further stated that in order to show
bona fides, the petitioner had already submitted a demand draft of
Rs.10,00,000/- and four cheques towards the balance amount along with an
additional cheque towards interest amount, and it was prayed that the
offence be compounded under Section 147 of the Negotiable Instruments
Act.
3. Respondent/complainant Vijay Garg filed reply to the aforesaid
application and opposed the prayer for compounding. In the reply, it was
averred that the application had been filed at the fag end of the trial only to
delay the proceedings and that the petitioner had throughout adopted dilatory
tactics. It was further stated that though a payment schedule had earlier been
submitted before the Court, the petitioner had failed to honour the terms
thereof and committed breach of the agreed settlement. The respondent
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alleged that despite having received substantial amounts in her bank
accounts and possessing sufficient financial capacity, the petitioner
intentionally avoided making payment of the agreed amount. It was further
averred that several opportunities had already been availed by the petitioner
during trial, including proceedings arising from applications and revision
petitions filed by her, solely to prolong the matter. The respondent further
contended that no concluded settlement deed had in fact been executed
between the parties and that the application under Section 147 of the
Negotiable Instruments Act had been moved merely to mislead the Court
and avoid the consequences of conviction. It was accordingly prayed that the
application for compounding be dismissed with costs. Learned Judicial
Magistrate First Class, Gurugram, vide impugned order dated 08.01.2024,
dismissed the application filed by the petitioner/accused under Section 147
of the Negotiable Instruments Act for compounding of the offence.
4. The learned trial Court, after hearing arguments from both
sides, observed that though the petitioner had sought compounding on the
basis of an alleged settlement arrived at in the year 2019 and had expressed
willingness to pay the agreed amount along with interest on the remaining
balance, the respondent/complainant had specifically opposed the prayer for
settlement on the ground that he had already suffered prolonged harassment
for several years and was not willing to compound the matter. The learned
Magistrate further observed that simultaneously with the filing of the
application for compounding, the petitioner had also moved an application
for summoning defence witnesses and had examined one defence witness,
which reflected that the application appeared to have been filed merely to
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delay the proceedings. The learned trial Court further held that even
otherwise, the willingness expressed by the petitioner to pay the settlement
amount almost five years after the alleged settlement of the year 2019 could
not be accepted in the absence of consent and willingness of the complainant
to compound the matter. Accordingly, finding no merit in the application, the
same was dismissed by the learned trial Court.
5. Learned counsel for the petitioner contends that the impugned
order dated 08.01.2024 passed by the learned JMIC, Gurugram is wholly
illegal, arbitrary and contrary to the settled principles governing proceedings
under Section 138 of the Negotiable Instruments Act. It is submitted that the
offence under Section 138 of the Negotiable Instruments Act is primarily
compensatory and quasi-criminal in nature and the object of the provision is
to ensure recovery of the amount due rather than to punish the accused.
Learned counsel submits that the petitioner had throughout shown bona fide
intention to settle the dispute and had already paid substantial amounts to the
respondent/complainant, including payment of Rs.17,00,000/- after filing of
the complaint, apart from other amounts paid earlier and during the year
2019. It is further contended that the petitioner had moved an application
under Section 147 of the Negotiable Instruments Act expressing readiness
and willingness to pay the remaining settled amount along with interest,
however, the learned trial Court wrongly dismissed the said application
merely on conjectures by observing that the same had been filed to delay the
proceedings. It is further argued that the learned trial Court failed to
appreciate that the petitioner had acted in furtherance of the settlement
arrived at between the parties in the year 2019 and had also furnished drafts
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and cheques towards the balance payment, thereby clearly establishing her
bona fides. Learned counsel submits that the respondent/complainant
intentionally avoided settlement with a view to prolong the litigation and
claim enhanced interest and other benefits. It is contended that the impugned
order is non-speaking, mechanical and passed without proper application of
judicial mind, as no cogent reasons have been assigned for declining the
prayer for compounding. Learned counsel for the petitioner further submits
that it is well settled that offences under Section 138 of the Negotiable
Instruments Act can be compounded even at appellate or revisional stages
and, therefore, at the stage when the trial was still pending, there was no
justification for refusing the request for compounding. Reliance has been
placed upon the judgment of the Hon’ble Supreme Court in Sanjibj Tari
versus Kishore S. Borcar and another 2025(4) RCR (criminal) 420,
wherein guidelines have been issued emphasizing early resolution and
compounding of cheque dishonour cases keeping in view the quasi-criminal
nature of such proceedings. It is argued that the Courts are expected to
encourage settlement in such matters and technical objections ought not to
defeat genuine efforts for amicable resolution. It is also contended that
consent of the complainant cannot be treated as an absolute embargo in
every situation and once the accused demonstrates readiness to satisfy the
liability in terms of the settlement, the Court ought to exercise jurisdiction in
furtherance of the object of the statute. On the aforesaid premises, prayer has
been made for setting aside the impugned order dated 08.01.2024 and for
allowing the application filed by the petitioner under Section 147 of the
Negotiable Instruments Act for compounding of the offence.
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6. Per contra, learned counsel for the respondent/complainant
vehemently opposes the present petition and submits that the petitioner has
concealed material facts and has approached this Court without clean hands.
It is contended that from the very inception, the petitioner has adopted
deliberate delaying tactics only to frustrate the proceedings arising out of the
complaint under Section 138 of the Negotiable Instruments Act. Learned
counsel submits that despite repeated opportunities granted by the learned
trial Court, the petitioner intentionally avoided appearance and even sought
exemption from personal appearance on medical grounds, compelling the
trial Court to observe that the medical certificate appeared to have been
procured merely to seek exemption from appearance. Consequently, non-
bailable warrants and thereafter proclamation proceedings had to be initiated
against the petitioner. It is further submitted that during the course of trial, an
official from Axis Bank appeared as CW-1 and produced statement of
account pertaining to the petitioner showing that crores of rupees had been
credited into her accounts during the relevant period, thereby demonstrating
that the petitioner was financially capable of discharging her liability.
Learned counsel contends that despite having sufficient financial means, the
petitioner intentionally failed to honour the commitments made before the
Court and the complainant. Learned counsel for the respondent further
submits that during pendency of the complaint, the petitioner herself
proposed a repayment schedule dated 20.05.2019 whereby she undertook to
repay the amount of Rs.50 lakhs along with interest in instalments. It is
submitted that the respondent/complainant, being a senior citizen and retired
banker, accepted the said repayment schedule under compelling
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circumstances and in good faith in order to avoid prolonged litigation.
However, the petitioner violated the terms of the repayment schedule and
repeatedly defaulted in making payments, compelling the respondent to
move appropriate applications before the learned trial Court. Even thereafter,
only negligible payments were made and the petitioner again stopped
making payments altogether. It is further argued that instead of cooperating
with the proceedings, the petitioner deliberately absented herself from the
Court proceedings resulting in issuance of non-bailable warrants as well as
proclamation proceedings. Learned counsel submits that after the case had
substantially progressed and the complainant evidence had already
concluded, the petitioner moved an application seeking discharge under
Section 219 Cr.P.C., which was dismissed by the learned trial Court on
03.11.2022 and even the revision petition preferred against the said order
was dismissed by the learned Additional Sessions Judge, Gurugram vide
order dated 16.10.2023. Learned counsel contends that thereafter, when the
matter had reached the stage of defence evidence and final arguments, the
petitioner moved the application under Section 147 of the Negotiable
Instruments Act for compounding of the offence solely with an intention to
further delay the adjudication of the complaint. It is argued that the alleged
settlement deed relied upon by the petitioner was never validly executed and
was projected before the Court only to mislead the proceedings. It is further
submitted that immediately after dismissal of the application for
compounding vide impugned order dated 08.01.2024, the petitioner again
moved another application under Section 247 Cr.P.C. seeking permission to
lead defence evidence, thereby clearly exposing the mala fide intent behind
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the so-called offer for settlement. Learned counsel for the respondent further
submits that despite availing as many as 14 effective opportunities to lead
defence evidence, the petitioner failed to produce any evidence and
ultimately the defence evidence was closed by the learned trial Court vide
order dated 11.03.2024. Even the said order has separately been challenged
by the petitioner in revision proceedings, which fact has deliberately not
been disclosed in the present petition. It is thus argued that the petitioner has
consistently abused the process of law and has been attempting to prolong
the matter for several years.
7. On the strength of the aforesaid submissions, learned counsel
contends that the impugned order dated 08.01.2024 passed by the learned
JMIC, Gurugram is perfectly legal, reasoned and justified in the facts and
circumstances of the case and does not warrant any interference by this
Court in exercise of inherent jurisdiction under Section 482 Cr.P.C. Learned
counsel for the respondent has also placed reliance upon the judgment of the
Hon’ble Supreme Court in A.S. Pharma Pvt. Ltd. versus Nayati Medical
Pvt. Ltd. and others, 2025(1) RCR (Criminal) 714, to contend that
compounding of an offence under Section 138 of the Negotiable Instruments
Act under Section 147 of the N.I. Act cannot ordinarily be permitted without
the consent of the complainant. It has been argued that though the Hon’ble
Supreme Court in exercise of powers under Article 142 of the Constitution
may, in peculiar facts, compound the offence even in absence of consent of
the complainant, the High Court while exercising jurisdiction under Section
482 Cr.P.C. does not possess such wide powers. Learned counsel submits
that in the present case, the respondent/complainant has categorically
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opposed the prayer for compounding and, therefore, the learned trial Court
rightly declined the application filed by the petitioner. It is thus contended
that the petitioner cannot seek compounding of the offence as a matter of
right merely on the basis of an alleged willingness to pay the amount after
protracting the proceedings for several years.
8. I have heard learned counsel for the parties and have gone
through the paper-book with their able assistance. The primary grievance
raised by the petitioner is against the order dated 08.01.2024 passed by the
learned JMIC, Gurugram whereby the application filed under Section 147 of
the Negotiable Instruments Act for compounding of the offence was
dismissed. The contention of the petitioner is that since the offence under
Section 138 of the Negotiable Instruments Act is primarily compensatory in
nature and the petitioner was willing to make payment of the cheque
amount, the learned trial Court ought to have permitted compounding of the
offence. However, this Court does not find any merit in the aforesaid
submissions. A perusal of the record reveals that the conduct of the petitioner
throughout the proceedings has not been bona fide. The complaint under
Section 138 of the Negotiable Instruments Act has remained pending since
the year 2018. During the pendency of the proceedings, the petitioner herself
submitted a repayment schedule dated 20.05.2019 undertaking to liquidate
the liability in instalments. The respondent/complainant, who is stated to be
a senior citizen and retired banker, accepted the said proposal in good faith
with the legitimate expectation that the matter would attain quietus.
However, admittedly, the petitioner failed to adhere to the said repayment
schedule and defaulted in making payments in terms thereof. Even
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thereafter, the petitioner continued seeking adjournments and repeatedly
adopted dilatory tactics, compelling the learned trial Court to issue non-
bailable warrants and even initiate proclamation proceedings.
9. The record further shows that after the complainant evidence
had already concluded and the matter had reached the stage of defence
evidence and final arguments, the petitioner moved the application seeking
compounding of the offence. Significantly, immediately after dismissal of
the said application, another application seeking permission to lead defence
evidence was moved by the petitioner. Such conduct lends credence to the
observations recorded by the learned trial Court that the application for
compounding was not moved with genuine intent to settle the dispute, but
rather to prolong the proceedings and delay the culmination of trial. Even
despite availing numerous effective opportunities, the petitioner failed to
conclude defence evidence, resulting in closure thereof by the learned trial
Court. The contention raised on behalf of the petitioner that the learned trial
Court was bound to permit compounding merely because the petitioner
expressed willingness to pay the amount also deserves rejection. No doubt,
the offence under Section 138 of the Negotiable Instruments Act is
compensatory in nature and the law encourages settlement of such disputes.
However, the willingness to pay, at a highly belated stage after years of
protracted litigation and repeated defaults, cannot by itself confer an
indefeasible right upon the accused to seek compounding, particularly when
the complainant is not agreeable to the same and the conduct of the accused
is found to be lacking in bona fides.
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10. The judgment relied upon by learned counsel for the petitioner
is distinguishable on facts. In Sanjabji Tari‘ case (supra), relied upon by the
petitioner, the Hon’ble Supreme Court issued certain guidelines to
streamline proceedings under Section 138 of the Negotiable Instruments Act
and observed that Courts may encourage settlement and compounding in
appropriate cases. However, the said judgment cannot be read to mean that
irrespective of the conduct of the accused and irrespective of the surrounding
circumstances, compounding must necessarily be permitted in every case.
The observations made therein were rendered in the peculiar facts of that
case and with an intent to facilitate early resolution of cheque dishonour
disputes. In the present case, the petitioner had already been granted ample
opportunities after having herself proposed a repayment schedule, yet failed
to honour the commitments made before the Court and continued to delay
the proceedings for years together.
11. Rather, the judgment relied upon by the respondent in A.S.
Pharma‘s case (supra) squarely applies to the facts of the present case. The
Hon’ble Supreme Court therein clearly held that compounding under Section
147 of the Negotiable Instruments Act ordinarily requires consent of the
complainant and that the powers exercised by the Hon’ble Supreme Court
under Article 142 of the Constitution cannot be equated with the jurisdiction
exercised by the High Court under Section 482 Cr.P.C. In the present case,
the respondent/complainant has specifically opposed the prayer for
compounding and has consistently asserted that the petitioner has abused the
process of law and failed to honour the earlier settlement terms. Therefore,
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this Court finds no illegality in the approach adopted by the learned trial
Court while declining the request for compounding.
12. This Court is also of the considered opinion that the impugned
order dated 08.01.2024 cannot be termed as perverse, arbitrary or suffering
from any patent illegality warranting interference under Section 482 Cr.P.C.
The learned trial Court has duly considered the stage of the proceedings, the
earlier conduct of the petitioner, the repeated defaults in repayment despite
settlement opportunities and the objections raised by the complainant before
dismissing the application. The inherent jurisdiction of this Court is to be
exercised sparingly and only where gross miscarriage of justice is
demonstrated. No such circumstance is made out in the present case.
13. Consequently, finding no merit in the present petition, the same
is hereby dismissed.
14. Pending applications, if any, shall also stand disposed of.
(MANDEEP PANNU)
18.05.2026 JUDGE
Anu
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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