In a recent judgment, the High Court of Madhya Pradesh at Jabalpur addressed a criminal revision petition filed under Section 397/401 of the Cr.P.C. read with Sections 438/442 of the Bhartiya Nagarik Suraksha Sanhita, 2023. The case involved a conviction under Section 138 of the Negotiable Instruments Act (NI Act), where the applicant, Chandrabhan Patel, was sentenced to three months of rigorous imprisonment and a compensation of Rs. 1,15,000/-
Background of the Case
The dispute arose when the respondent, Asharam Yadav, lent Rs. 1.05 lakh to the applicant as a loan. In return, the applicant issued a cheque dated 15.05.2022, which was dishonored due to insufficient funds. This led to a complaint under Section 138 of the NI Act. The trial court convicted the applicant, and the appellate court upheld the decision. Aggrieved, the applicant filed a revision petition before the High Court.
During the pendency of the revision, the parties reached an amicable settlement. The respondent confirmed that the dispute had been resolved voluntarily and expressed no objection to the applicant's acquittal. However, the Registrar (Judicial-II) pointed out that, as per the Supreme Court's ruling in Damodar S. Prabhu Vs. Sayed Babalal H (2010) 5 SCC 663), the applicant was required to deposit 15% of the cheque amount as a compounding fee.
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The High Court, considering the peculiar facts and circumstances of the case, reduced the compounding fee to 5% of the cheque amount (Rs. 5,250/-). The applicant was directed to deposit this amount within 15 days. Upon compliance, the applicant would be released from jail, provided his custody was not required in any other case.
"The competent court can reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance."
- Supreme Court in Damodar S. Prabhu Case
The court clarified that this order would result in the applicant's acquittal under Section 320(8) of the Cr.P.C., effectively ending the legal proceedings against him.
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Key Takeaways
- Compounding of Offences: The case highlights the possibility of compounding offences under Section 138 of the NI Act if both parties reach a settlement.
- Judicial Discretion: Courts have the authority to reduce the compounding fee based on the case's specifics, as demonstrated here.
- Legal Precedent: The judgment reaffirms the principles laid down in the Damodar S. Prabhu case while allowing flexibility in exceptional situations.
Case Title: Chandrabhan Patel vs. Asharam Yadav
Case Number: Criminal Revision No. 3696 of 2025
