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M/S. Nivi Knit Fashions v. Rajkumar

Madras HC27 Nov 2025CRL RC/653/2021

Case brief

AI extract

What is this about?

Compounding of Section 138 NI Act cheque dishonour conviction on settlement: Madras High Court allowed CRL RC No. 653 of 2021 (decided 27-11-2025, M. Nirmal Kumar, J.), compounded the offence under Section 147 of the N.I. Act, 1881 via joint petition Crl.M.P.No.23064 of 2025, set aside the conviction of two years simple imprisonment plus Rs.10,00,000/- compensation (double the Rs.5 lakhs cheque amount) in C.C.No.218 of 2005 and its confirmation in C.A.No.27 of 2018, and discharged the accused after the complainant accepted the cheque amount by Demand Draft and foregone compensation.

What did the court decide?

Criminal Revision Case allowed; Section 138 N.I.Act offence compounded; judgments in C.A.No.27 of 2018 and C.C.No.218 of 2005 set aside; petitioners discharged from charges. ¶70

M/S. Nivi Knit Fashions Vs Rajkumar — Cheque Dishonour | Madras HC (2025)

What the court decided

AI extract

Outcome

Criminal Revision Case allowed; Section 138 N.I.Act offence compounded; judgments in C.A.No.27 of 2018 and C.C.No.218 of 2005 set aside; petitioners discharged from charges.

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Issue for consideration

Whether the Criminal Revision Case seeking to set aside the judgment dated 06.10.2021 made in C.A.No.27 of 2018 (confirming the judgment and sentence imposed in C.C.No.218 of 2005 dated 21.02.2018 under Section 138 of the N.I.Act) should be allowed. +1 more

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Court's answer

In the result, this Criminal Revision Case is allowed.

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Ratio / Principle

Recording the parties' confirmed compromise, the offence punishable under Section 138 of the N.I.Act against the petitioners in CC No.218 of 2005 is compounded.

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Key takeaways

The judgment dated 06.10.2021 made in C.A.No.27 of 2018 passed by the learned III Additional District and Sessions Court, Tiruppur at Dharapuram, as well as the judgment and sentence passed in C.C.No.218 of 2005 dated 21.02.2018 by the learned Judicial Magistrate I, Udumalpet, are hereby set aside and the petitioners are discharged from the charges.ratio¶69

Detailed headnote1 paragraphs

Madras High Court (M. Nirmal Kumar, J.), CRL RC No. 653 of 2021, decided 27-11-2025: The petitioners, proprietors of M/s. Nivi Knit Fashions, were convicted on 21.02.2018 in C.C.No.218 of 2005 (learned Judicial Magistrate I, Udumalpet) on the complaint of the respondent (M/s. Delta Carriers) for an offence punishable under Section 138 of the N.I.Act, and sentenced to two years simple imprisonment and Rs.10,00,000/- as compensation, being double the cheque amount of Rs.5 lakhs. Their appeal C.A.No.27 of 2018 was dismissed on 06.10.2021 by the learned III Additional District and Sessions Court, Tiruppur at Dharapuram, confirming the conviction and sentence. On settlement, the respondent/complainant agreed to receive the cheque amount while foregoing the compensation awarded by the Courts below, and a Demand Draft for the cheque amount was produced. Both parties filed a compounding petition in Crl.M.P.No.23064 of 2025 invoking Section 147 of the N.I. Act, 1881, and confirmed the compromise before the Court. The Court compounded the Section 138 offence, set aside both the appellate and trial judgments and discharged the petitioners from the charges, allowing the Criminal Revision Case.

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CRL RC No. 653 of 2021

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 27-11-2025

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CORAM

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THE HONOURABLE MR JUSTICE M. NIRMAL KUMAR

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CRL RC No. 653 of 2021 & CRL MP No.23064 of 2025

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M/s. Nivi Knit Fashions, Rep.by its Proprietor Mr.S.Mohanraj

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2.S. Mohanraj S/o.Subbaiyan, Proprietor Of M/s.Nivi Knit Fashions, Diamond Threatre Backside, Tiruppur.

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Petitioner(s)

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Rajkumar, S/o.Narayanasamy, Proprietor Of M/s.Delta Carriers, Rep.by its Power Agent

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2.P.Natarajan, S/o.Perumalsamy, No.97, USS Street, Gandhi Nagar, Udumalpet.

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Respondent(s)

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 653 of 2021

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PRAYER

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This revision case has been filed to set aside the judgment dated 06.10.2021 made in C.A.No.27 of 2018 on the file of the learned III Additional District and Sessions Court, Tiruppur at Dharapuram confirming the judgment and sentence imposed in C.C.No.218 of 2005 dated 21.02.2018 on the file of the learned Judicial Magistrate I, Udumalpet by allowing this case.

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For Petitioner(s): M/s.M/s.S.N. Arun Kumar for Mr.B.Nambiselvan

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For Respondent(s): AR.Karthik Lakshmanan Counsel for R1

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ORDER

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This revision case has been filed, seeking to set aside the judgment dated

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06.10.2021 made in C.A.No.27 of 2018 on the file of the learned III Additional District and Sessions Court, Tiruppur at Dharapuram confirming the judgment and sentence passed in C.C.No.218 of 2005 dated 21.02.2018 on the file of the

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learned Judicial Magistrate I, Udumalpet, by allowing this case.

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2.The petitioners/accused were convicted in CC No.218 of 2005 by

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judgment dated 21.02.2018 on the complaint filed by the respondent for the

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 653 of 2021

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offence punishable under Section 138 of the N.I.Act and sentenced to undergo

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two years simple imprisonment and to also pay Rs.10,00,000/- as compensation,

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which is doubled the cheque amount of Rs.5 lakhs.

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Aggrieved by the same, the petitioners/accused preferred an appeal in

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C.A.No.27 of 2018. The learned Sessions Judge by judgment dated 06.10.2021, dismissed the appeal, confirming the conviction and sentence imposed by the trial Court. Against which, the present revision case has been filed.

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4.The gist of the case is that the respondent/complainant doing business in the name and style of M/s.Delta Carriers and the petitioners/accused running

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Classic Clothing Company in the name and style of M/s.Nivi Knit Fashions. Both were having business relationship for several years. The

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petitioners/accused had purchased various types of yarns from the

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respondent/complainant and during the course of business, the cheques have been issued in discharge of the liability. Since the petitioners’ business was not

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being as expected, there was some default in payment to the 3

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 653 of 2021

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respondent/complainant and thereafter, cheques have been dishonoured.

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Following the statutory procedures, a complaint has been filed.

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On consideration of the evidence adduced by the parties, the trial

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Court, after closure of the evidence on both sides, vide judgment 06.10.2021 convicted the petitioners/accused, which came to be confirmed by the lower

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appellate Court, vide judgment dated 21.02.2018. Hence the Revision.

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The learned counsel for the petitioners/accused submitted that in this

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case, the issue between the petitioners and the respondents got resolved as they

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came to an understanding. The respondents, noticing that the petitioners had sustained loss in business, have agreed to receive the cheque amount. The learned counsel for the respondents/complainants submitted that considering the

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petitioner is having a large business association and also finding that the petitioners had genuinely suffered loss in business, agreed to receive the cheque amount, while foregoing the compensation awarded by the Courts below. The learned counsel produced a copy of the Demand Draft for the cheque amount. A

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 653 of 2021

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scanned copy of the Demand Draft reads as under:

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