Bombay High Court

INDIA STEEL TRADERS THROUGH ITS PROPRIETOR, ABDULLA RAHIM HUSSAINSAB SHAIKHversusMSM STEELS PVT. LTD. THROUGH MANAGING DIRECTOR, NACHIKET S/O KAMLAKAR BHALE

Disposal: DISPOSED OFF

Holding

The High Court quashed the impugned judgment and order confirming the conviction and allowed the withdrawal of the deposited amount.

Summary

The applicant, India Steel Traders, was convicted under Section 138 of the Negotiable Instruments Act and sentenced to one year rigorous imprisonment with a compensation order of Rs.40,00,000. The conviction was affirmed by the Sessions Judge, but the substantive sentence was later suspended. During the pendency of the revision, the parties executed a deed of compromise, settling the dispute amicably. The High Court, upon considering the compromise, quashed the impugned judgment and order confirming the conviction. Additionally, the court permitted the applicant to withdraw the Rs.1,00,000 deposit made before the First Appellate Court. The revision application was consequently disposed.

Issues considered

What is the effect of a deed of compromise on a pending criminal revision application?
Whether the judgment and order confirming conviction under Section 138 NI Act can be set aside on account of the compromise?
Whether the deposit made before the appellate court can be refunded following the compromise?

Legislation cited

Negotiable Instruments Act, 1981 — s. 138

Subjects

Criminal law
Negotiable Instruments Act
Section 138
Compromise deed
Revision application
Quashing of judgment
Refund of deposit

Judgment

2026:BHC-AUG:38641


                                                                               88.20revn
                                                   (1)

                       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                  BENCH AT AURANGABAD

                      57 CRIMINAL REVISION APPLICATION NO. 88 OF 2020

                       INDIA STEEL TRADERS, THROUGH ITS PROPRIETOR,
                            ABDULLA RAHIM HUSSAINSAB SHAIKH
                                            VERSUS
                     MSM STEELS PVT. LTD., THROUGH MANAGING DIRECTOR,
                               NACHIKET S/O KAMLAKAR BHALE
                                                  …..
                 Mr Sachin S. Panale, Advocate for Applicant
                 Mr Pravin G. Patil, Advocate for Respondent
                                                  …..

                                           CORAM : SUSHIL M. GHODESWAR, J.

                                             DATE : 24th AUGUST, 2026

                 P. C. :


                 1.          This is a revision application arising out of the impugned

                 order dated 13/07/2020, passed in Criminal Appeal No.70/2019

                 wherein the learned Sessions Judge, Latur confirmed the judgment and

                 order dated 11/11/2019, passed by the learned Judicial Magistrate First

                 Class, Latur in SCC No.2237/2013, thereby convicting the applicant

                 under Section 138 of the Negotiable Instruments Act, 1981 and

                 sentencing him to suffer rigorous imprisonment of one year and to pay

                 compensation of Rs.40,00,000/- within a period of two months.


                 2.          Heard learned Advocates for the respective parties.
                                                               88.20revn
                                  (2)

3.           This Court on 21/07/2020 issued notice to respondent. It

has been pointed out to this Court that substantive sentence of the

applicant was suspended vide order of this Court dated 27/08/2020 and

during the pendency of this matter, the parties have settled the matter

amicably. It is also informed that they have also executed the deed of

compromise which is placed on record.          By virtue of the said

compromise deed, both the learned Advocates submit that this matter

has ben settled in between the parties, and therefore, nothing survives

in the matter.    The said compromise deed is marked as ‘X for

identification. In pursuance to aforesaid compromise, nothing survives

in this revision application.


4.           In pursuance of the aforesaid compromise deed ‘X’, the

impugned judgment and order dated 13/07/2020, passed in Criminal

Appeal No.70/2019 by the learned Sessions Judge, Latur, thereby

confirming the judgment and order dated 11/11/2019, passed by the

learned Judicial Magistrate First Class, Latur in SCC No.2237/2013,

convicting the applicant under Section 138 of the Negotiable

Instruments Act, is hereby quashed and set aside.


5.           At this state, Mr Panale, leaned Advocate for the applicant

submits that, while securing suspension order the applicant had
                                                              88.20revn
                                 (3)

deposited Rs.1,00,000/- before the First Appellate Court on

17/12/2019. He prays that the same may be permitted to be refunded

to the applicant in view of the compromise terms agreed in the

compromise deed at Clause No.4[III] thereof.


6.          Hence, the applicant is permitted to withdraw said

Rs.1,00,000/- deposited before the First Appellate Court.


7.          This revision application is disposed of in above terms.




                                   [SUSHIL M. GHODESWAR, J.]
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