Applicant sought quashing of a summoning order in a Section 138 NI Act complaint and leave to compound the offence. The court permitted a compounding application under Section 147 NI Act with deposit of 10% of the cheque amount within 15 days, stayed coercive action for one month, and disposed of the application.
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Neutral Citation No. - 2025:AHC:943
Court No. - 77
Case :- APPLICATION U/S 482 No. - 26079 of 2024
Applicant :- Smt Pooja Sharma Opposite Party :- State Of U.P. And Another Counsel for Applicant :- Narendra Kumar Counsel for Opposite Party :- G.A.
Hon'ble Arun Kumar Singh Deshwal,J.
"21. With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence. It was submitted that the requirement of deposit of the costs will act as a deterrent for delayed composition, since at present, free and easy compounding of offences at any stage, however belated, gives an incentive to the drawer of the cheque to delay settling the cases for years. An application for compounding made after several years not only results in the system being burdened but the complainant is also deprived of effective justice. In view of this submission, we direct that the following guidelines be followed:
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% 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.
(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% 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% of the cheque amount."
Order Date :- 3.1.2025 A.Kr.
Digitally signed by :- AJAY KUMAR High Court of Judicature at Allahabad
1 issue framed by the court
Whether the applicant may be permitted to seek compounding of a Section 138 NI Act proceeding under the Damodar S. Prabhu guidelines with graded costs.
Colour shows how this judgement treated each authority
Damodar S. Prabhu Vs. Sayed Babalal H.Relied on¶4
2010 (5) SCC 663 · Who else cites this
3 provisions across 2 enactments
Smt Pooja Sharma
Arun Kumar Singh Deshwal
As recorded by the court registry
2 orders share this CNR
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