SHANTANUversusSTATE OF U.P. AND ANOTHER

         HIGH COURT OF JUDICATURE AT ALLAHABAD
                 APPLICATION U/S 528 BNSS No. - 52181 of 2025

Shantanu
                                                             .....Applicant(s)
                                    Versus

State of U.P. and Another
                                                                .....Opposite
                                                                      Party(s)

Counsel for Applicant(s)                     :   Prabhat Kumar Tiwari
Counsel for Opposite Party(s)                :   G.A.

Court No. - 74
                      HON'BLE DEEPAK VERMA, J.

1. Heard learned counsel for the applicants; learned A.G.A. for the State
and perused the record.


2. The present 528 B.N.S.S. application has been filed to quash the
summoning order dated 17.09.2024 as well as entire proceedings in
Complaint Case No.16102 of 2024 (Om Prakash Dubey vs. Shantanu),
under Section 138 of the Negotiable Instrument Act, Police Station New
Agra, District Agra, pending in the court of Additional Chief Judicial
Magistrate, Court No.9, Agra.


3. It is submitted by learned counsel for applicant that there is money
dispute between the parties and opposite party no.2 has filed a complaint
under Section 138 of N.I. Act against the applicant. It is further submitted
that since there is some dispute regarding payment of money and as such,
there is a good chance of amicable settlement of dispute through
compromise.


4. Learned counsel for applicant has placed reliance on a judgment of
Hon'ble Apex Court in the case of Damodar S. Prabhu Vs. Sayed
Babalal H., reported in 2010 (5) SCC 663. The relevant paragraphs
no.17, 18 & 19 are quoted herein below:-


"17. In a recently published commentary, the following observations have
been made with regard to the offence punishable under Section 138 of the
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Act [Cited from: Arun Mohan, Some thoughts towards law reforms on the
topic of Section 138, Negotiable Instruments Act-Tackling an avalanche
of cases (New Delhi: Universal Law Publishing Co. Pvt. Ltd., 2009) at p.
5] :


"... 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."
18. 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. There is also some support for the
apprehensions raised by the learned Attorney General that a majority of
cheque bounce cases are indeed being compromised or settled by way of
compounding, albeit during the later stages of litigation thereby
contributing to undue delay in justice delivery. The problem herein is with
the tendency of litigants to belatedly choose compounding as a means to
resolve their dispute. .........


19. As mentioned earlier, the learned Attorney General's submission is
that in the absence of statutory guidance, parties are choosing
compounding as a method of last resort instead of opting for it as soon as
the Magistrates take cognizance of the complaints. One explanation for
such behaviour could be that the accused persons are willing to take the
chance of progressing through the various stages of litigation and then
choose the route of settlement only when no other route remains. While
such behaviour may be viewed as rational from the viewpoint of litigants,
the hard facts are that the undue delay in opting for compounding
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contributes to the arrears pending before the courts at various levels. If
the accused is willing to settle or compromise by way of compounding of
the offence at a later stage of litigation, it is generally indicative of some
merit in the complainant's case. In such cases it would be desirable if
parties choose compounding during the earlier stages of litigation. If
however, the accused has a valid defence such as a mistake, forgery or
coercion among other grounds, then the matter can be litigated through
the specified forums."


5. The Apex Court has framed guidelines in Sanjabij Tari Vs. Kishore
S. Borcar & another in Criminal Appeal No.1755 of 2010 decided on
25.09.2025 and reported in 2025 SCC OnLine SC 2069 and has placed
reliance upon Paras 37 & 38 of the judgement, the same is being
reproduced below:-


"37. It is pertinent to mention that this court framed guidelines for
compounding offences under the Negotiable Instruments Act, nearly
fifteen years back in Damodar S. Prabhu v. Sayed Babalal H. (2010) 5
SCC 663 . The relevant portion of the said judgment is reproduced
hereinbelow :
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 per cent. 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 per cent. 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 per cent. of the cheque
amount. ..


We are also conscious of the view that the judicial endorsement of the
abovequoted guidelines 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. We have already
explained that the scheme contemplated under section 320 of the Code of
Criminal Procedure cannot be followed in the strict sense. In view of the
legislative vacuum, we see no hurdle to the endorsement of some
suggestions which have been designed to discourage litigants from unduly
delaying the composition of the offence in cases involving section 138 of
the Act. The graded scheme for imposing costs is a means to encourage
compounding at an early stage of litigation. In the status quo, valuable
time of the court is spent on the trial of these cases and the parties are not
liable to pay any court fee since the proceedings are governed by the
Code of Criminal Procedure, even though the impact of the offence is
largely confined to the private parties. Even though the imposition of
costs by the competent court is a matter of discretion, the scale of costs
has been suggested in the interest of uniformity. The competent court can
of course reduce the costs with regard to the specific facts and
circumstances of a case, while recording reasons in writing for such
variance. Bona fide litigants should of course contest the proceedings to
their logical end. Even in the past, this court has used its power to do
complete justice under article 142 of the Constitution to frame guidelines
in relation to the subject-matter where there was a legislative vacuum.


38. Since a very large number of cheque bouncing cases are still pending
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and interest rates have fallen in the last few years, this court is of the view
that it is time to ?revisit and tweak the guidelines?. Accordingly, the
aforesaid guidelines of compounding are modified as under :


(a) If the accused pays the cheque amount before recording of his
evidence (namely defence evidence), then the trial court may allow
compounding of the offence without imposing any cost or penalty on the
accused.


(b) If the accused makes the payment of the cheque amount post the
recording of his evidence but prior to the pronouncement of judgment by
the trial court, the magistrate may allow compounding of the offence on
payment of additional 5 per cent. of the cheque amount with the legal
services authority or such other authority as the court deems fit.


(c) Similarly, if the payment of cheque amount is made before the sessions
court or a High Court in revision or appeal, such court may compound
the offence on the condition that the accused pays 7.5 per cent. of the
cheque amount by way of costs.


(d) Finally, if the cheque amount is tendered before this court, the figure
would increase to 10 per cent of the cheque amount."


6. As requested by the counsel, it is directed that the accused may appear
before the court below within a period of one month from today through
the representing counsel and move an application seeking compounding
of offence through compromise and deposit 10% of cheque amount. On
such application being moved the concerned court may take adequate
steps in accordance with law in this regard and shall provide further
opportunity to the accused which shall not exceed a maximum period of
four months from today to make an endeavour in this direction.
Thereafter, the court shall pass necessary orders specifically keeping in
view the law laid down by the Apex Court in the case of Damodar S.
Prabhu (supra) within a period of five months from today.


7. If the applicant does not appear before the trial court for compounding
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                                                                    6


                                    of offence through compromise, then he is required to appear and face the
                                    trial and the court shall be at liberty to proceed in accordance with law
                                    against the accused and take all necessary steps and measures to procure
                                    his attendance as the law permits.


                                    8. In the aforesaid period of five months or till the decision given in the
                                    light of the application, whichever is earlier, no coercive measures shall
                                    be adopted against the accused.


                                    9. It is further clarified that this order has been passed only with regard to
                                    the accused on behalf of whom this application u/s 528 B.N.S.S. has been
                                    moved in this Court.


                                    10. With the aforesaid observations this application is disposed off.




                                                                                             (Deepak Verma,J.)
                                    May 7, 2026
                                    SKD




Digitally signed by :-
SURJIT KUMAR DEY
High Court of Judicature at Allahabad