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K.Balachenniappan Vs Jeyakrishnan — Cheque Dishonour | Madras HC (2025)

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Madras HC
2025
K.Balachenniappan Vs JeyakrishnanK.Balachenniappan v. Jeyakrishnan

Disposed

K.Balachenniappan v. Jeyakrishnan

Madras HC19 Sept 2025CRL RC(MD)/875/2025

Case brief

AI extract

What is this about?

Conviction under Section 138 NI Act confirmed in appeal; during revision the parties settled for Rs.2,00,000/- and filed a joint compromise memo. Holding that Section 147 NI Act permits compounding at any stage and overrides Section 359 BNSS, the court permitted compounding, annulled the conviction and sentence, and treated the petitioner as acquitted.

What did the court decide?

Compounding permitted; conviction and sentence in S.T.C.No.643 of 2016 as confirmed in C.A.No.34 of 2022 annulled; petitioner treated as acquitted.

What the court decided

AI extract

Outcome

Compounding permitted; conviction and sentence in S.T.C.No.643 of 2016 as confirmed in C.A.No.34 of 2022 annulled; petitioner treated as acquitted.

Issue for consideration

Whether a High Court can permit compounding under Section 147 NI Act and set aside a confirmed Section 138 conviction on the basis of a post-appeal compromise between the parties. +1 more

Detailed headnote1 paragraphs

Offences under Section 138 NI Act are compoundable at any stage, even after dismissal of appeal confirming conviction, by virtue of Section 147's non obstante clause which overrides Section 359 BNSS. The special law prevails over the general law; the compensatory object of the NI Act takes priority over the punitive aspect. On a joint compromise with full payment to the complainant, the High Court may record the compromise, permit compounding, annul the conviction and sentence, and treat the accused as acquitted.

A compact analysis

This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.

A

Crl.R.C(MD)No.875 of 2025

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 19.09.2025

CORAM

THE HONOURABLE MR.JUSTICE SHAMIM AHMED

CRL.R.C.(MD)No.875 of 2025

K.Balachenniappan, S/o.Kailasam, D.No.1/229-S, Lakshmi Garden, Ettiveerapalayam Post, Perumanallur, Thiruppur District. ... Petitioner

vs.

Jeyakrishnan, S/o.Seetharaman, Puliyampatti, Peraiyur Taluk, Madurai District. ... Respondent

PRAYER: Criminal Revision Petition is filed under Section 438 r/w 442 of BNSS, 2023, to call for the records pertaining to the judgment dated 05.04.2025 made in C.A.No.34 of 2022 on the file of learned IV Additional District Sessions Judge, Madurai, confirming the judgment passed by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 by order dated 20.04.2022 and set aside the same.

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For Petitioner : Mr.J.Vishnu For Respondent : Mr.S.Prabhu *****

O R D E R

Heard Mr.V.Vishnu, learned counsel appearing for the Petitioner and Mr.S.Prabhu, learned counsel for the Respondent and also this Court

has taken the assistance of Mr.M.Karunanithi, learned Government Advocate (Criminal Side).

This Criminal Revision Petition has been filed by the petitioner to set aside the judgment dated 05.04.2025 made in C.A.No.34 of 2022 on the file of learned IV Additional District Sessions Judge, Madurai, confirming the judgment passed by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 by order dated 20.04.2022.

The facts of the case in a nutshell, led to filing of this Criminal Revision Petition and necessary for disposal of the same, are as follows:-

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a) The Petitioner was convicted and sentenced for the offence under Section 138 of the Negotiable Instruments Act, by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 by the judgment dated 20.04.2022, to undergo simple imprisonment for one year and to pay a fine of Rs.2,000/-, in default of payment of amount, to undergo further period of simple imprisonment for three months. Aggrieved by the order of the Trial Court, the Petitioner filed a Criminal Appeal in C.A.No.34 of 2022 before the learned IV Additional District Sessions Judge, Madurai.

b) The learned IV Additional District Sessions Judge, Madurai confirming the judgment passed by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 dated 20.04.2022, dismissed the said Appeal vide order dated 05.04.2025. Aggrieved by the same, the present Criminal Revision Petition has been filed.

The Co-ordinate Bench of this Court, while admitting the

Criminal Revision Case, vide order dated 22.07.2025, had ordered

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suspension of sentence in Crl.M.P.(MD) No.9301 of 2025 in Crl.R.C. (MD) No.725 of 2025, with the following directions:-

“(i) The petitioner shall deposit a sum of Rs.40,000/(Rupees Forty Thousand only) to the credit of S.T.C.No.643 of 2016 on the file of the learned Judicial Magistrate, Peraiyur, on or before 19.08.2025, failing which, the sentence suspended shall automatically dismissed, and the respondent is at liberty to execute the sentence imposed by the trial Court against the petitioner in the manner known to law;

(ii) On such deposit, the petitioner shall execute a bond for a sum of Rs.25,000/- (Rupees Twenty Five Thousand only) with two sureties, each for a like sum to the satisfaction of the learned Judicial Magistrate, Peraiyur;

(iii) The sureties shall affix their photographs and Left Thumb Impression in the surety bond and the trial Court may obtain a copy of their Aadhar card or Bank Pass Book to ensure their identity; and

(iv) The petitioner shall appear before the learned Judicial Magistrate, Peraiyur, on all working days at 10.30 a.m., until further orders.

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(v) On such deposit, the learned Judicial Magistrate, Peraiyur; shall re-deposit the said sum in a Nationalised Bank, so that, the amount accrues interest and the same can be disbursed depending upon the outcome of the Criminal Revision Case in Crl.R.C.(MD) No.875 of 2025.”

Thereafter, the Petitioner seeks extension of time by filing Crl.MP(MD)No.11706 of 2025 before this Court seeking to extend the time for depositing the sum of 40,000/- to the credit of S.T.C.No. 643/2016 on the file of the learned Judicial Magistrate, Peraiyur, as directed by the Co-ordinate bench of this Court dated 22.07.2025 in Crl.M.P(MD) No. 9301/2025 in Crl.RC(MD) No.875 of 2025. After hearing the submissions of learned counsel for the parties, this Court vide order 02.09.2025 allowed the said petition with the following directions:

“4.Today, when the matter is being taken up, Mr.J.Vishnu, learned Counsel for the petitioner submits that due to financial constraints and unavoidable personal circumstances, the petitioner could not mobilise the fund within the time stipulated

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by this Court vide order, dated 22.07.2025 in Crl.M.P. (MD)No.9301 of 2025 in Crl.R.C.(MD)No.875 of 2025. Thus, he submits that the petitioner has filed the present application for the relief stated supra.

5.It was further submitted by the learned Counsel for the petitioner that this Court may grant one last opportunity to the petitioner to make full compliance of the order, dated 22.07.2025 in Crl.M.P.(MD)No.9301 of 2025 in Crl.R.C.(MD)No.875 of 2025.

6.Mr.S.Prabhu, learned Counsel for the respondent submits that the petitioner has not complied with any of the conditions imposed by this Court vide order, dated 22.07.2025 in Crl.M.P.(MD)No.9301 of 2025 in Crl.R.C.(MD)No.875 of 2025. However, he has no objection to allow this petition by extending the time to comply with the conditions imposed by this Court, dated 22.07.2025.

7.Accordingly, after considering the arguments, as advanced by the learned Counsel for the parties as well the grounds raised in the affidavit filed in support of this present petition, this Court grants one week and no more further time. ie., on or before 10.09.2025, to the petitioner to make compliance of all the conditions imposed by this Court, vide order, dated 22.07.2025 in

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Crl.M.P.(MD)No.9301 of 2025 in Crl.R.C.(MD)No.875 of 2025, without fail. Accordingly, the Criminal Miscellaneous Petition is allowed.

8.Post the Criminal Revision Case on 11.09.2025 before the appropriate Bench.”

When the matter was taken up on 11.09.2025, this Court passed the following order:

“4.Today, when the matter is being taken up, the learned Counsel for the petitioner submits that in compliance of the order passed by this Court, dated 02.09.2025, the petitioner has deposited a sum of Rs. 40,000/- before the trial Court on 08.09.2025. The learned Counsel for the petitioner has produced a copy of the deposit receipt before this Court, which is taken on record. It was further submitted that the petitioner has complied with all the conditions imposed by the Co-ordinate Bench of this Court, vide order, dated 22.07.2025. The learned Counsel for the petitioner further submits that the petitioner is ready to pay the entire balance amount due to the respondent within a period of one week from today and he submits that the

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matter may be finally decided on the basis of compromise. The learned Counsel for the petitioner also submits that this Court by exercising power under Section 147 of the Negotiable Instruments Act,1881, may compound the offence.

5.Mr.S.Prabhu, learned Counsel for the respondent submits that he has no objection, if the petitioner pays the remaining amount of Rs.1,60,000/- due to the respondent by way of demand draft on or before the next date fixed, so that the matter may be settled. It was also requested by the learned Counsel for the respondent that the respondent may be permitted to withdraw the amount of Rs.40,000/-, which was deposited by the petitioner on 08.09.2025 before the trial Court.

6.Accordingly, after considering the arguments as advanced by the learned Counsel for the petitioner that the petitioner is ready to settle the remaining amount of Rs.1,60,000/- to the respondent, this Court grants 10 days time to the petitioner to pay the aforesaid amount ie., Rs.1,60,000/-, to the respondent by way of Demand Draft, without fail. The learned Counsel for the petitioner as well as the respondent are directed to file a compromise memo in this regard. The respondent is

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permitted to file an application before the trial Court for withdrawal of Rs.40,000/-, which was already deposited by the petitioner on 08.09.2025 before the trial Court, within one week from today and if any such application is filed by the respondent within the time stipulated by this Court, the trial Court is directed to disburse the above amount to the respondent within a period of one week thereafter.

7.Put up this case “for orders” on 19.09.2025 before the appropriate Bench”.

Today, when the matter is being taken up, in compliance with

the order passed by this Court dated 11.09.2025 in the present petition, the parties have entered into a Memorandum of Compromise dated 18.09.2025, which is taken on record and as per the terms of the Compromise, the following conditions were laid down between the parties which are quoted as under:

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“1.The Petitioner/Revision Petitioner was convicted in S.T.C.No.643 of 2016 by the learned District Munsifcum Judicial Magistrate, Peraiyur, and the conviction and sentence were confirmed in C.A.No.34 of 2022 by the learned IV Additional District and Sessions Judge, Madurai. Aggrieved thereby, the Petitioner filed the above Criminal Revision Case before this Hon'ble Court.

2. During the pendency of the above revision, with the intervention of elders and well-wishers, the parties have amicably settled the dispute. AS per the terms of settlement, the Petitioner has agreed to pay and the Respondent has agreed to receive a total sum of Rs. 2,00,000/- (Rupees Two Lakh only) in full and final settlement of all claims.

3. Out of the said amount, a sum of Rs.40,000/- has already been deposited before the Trial Court on 08.09.2025, and the balance sum of Rs.1,60,000/- has been paid to the Respondent by way of Demand Draft No.278237 dated 17.09.2025, drawn on Canara Bank, Malayapalayam Branch, Erode, which the Respondent has duly acknowledged.

4. The Respondent hereby states that he has no further claim of any nature whatsoever against the Petitioner

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in respect of the subject mater of this case and consents for compounding the offence under Section 147 of the Negotiable Instruments Act, 1881.

It is pray that this Hon'ble Court may be pleased to record this Joint Compromise Memo permit the compounding of the offence under Section 138 of the Negotiable Instruments Act consequently set aside the conviction and sentence passed in S.T.C.No.643 of 2016 dated 20.04.2022 by the learned District Munsifcum-Judicial Magistrate, Peraiyur, as confirmed in C.A.No.34 of 2022 dated 05.04.2025 by the learned IV Additional District and Sessions Judge, Madurai; and d) Acquit the Petitioner/Revision Petitioner from the charges.”

Learned counsel for the Revision Petitioner submits that in

compliance with the order dated 11.09.2025 passed by this Court, both the parties have entered into a Joint Memorandum of Compromise dated 18.09.2025 to the effect that the Criminal Revision case shall be settled in accordance with the terms and conditions as contained therein.

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Learned counsel for the Revision Petitioner further submits that

in terms of Joint Memorandum of Compromise dated 18.09.2025 the Revision Petitioner paid Rs.1,60,000/-, vide Demand Draft No.278237, dated 17.09.2025 drawn at Canara Bank, Malayapalayam Branch, Erode to the Respondent and thus, no amount is due against the Revision Petitioner.

Mr.S.Prabhu, the learned counsel for the Respondent received

the Demand Draft No.278237 dated 17.09.2025 to the tune of Rs.1,60,000/-, vide, drawn at Canara Bank, Malayapalayam and the learned counsel for the Respondent hereby acknowledges the photostat copy of the demand draft receipt and submits that the entire amount has been received and no amount is due against the Revision Petitioner.

Learned counsel for the Revision Petitioner further submits that the present Revision has been filed on 28.04.2025 before this Court and on the basis of change in circumstances, as the parties have entered into Memorandum of Compromise, it was prayed to this Court to

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compound the offence. It was further argued by the learned counsel for the Revision Petitioner that this Court has inherent powers to compound the offence, so that, ends of justice could be secured as the object of Negotiable Instruments Act is primarily compensatory and not punitive and moreover Section 147 of NI Act would have an overriding effect on Section 359 Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). Irrespective of which stage, the parties are compromising with the kind leave of this Hon'ble Court.

In support of his arguments, learned counsel for the Revision Petitioner has submitted that in the case of Damodar S. Prabhu vs. Sayed Babalal H reported at 2010 (2) SCC (Cri) 1328 , the Hon'ble Apex Court had formulated the guidelines for compounding the offence under section 138 N.I. Act wherein in para 21, it was pleased to observe as under :

"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

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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

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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."

Learned counsel for the Revision petitioner also submitted that

in the case of M/s Meters and Instruments Private Limited and another

vs. Kanchan Mehta reported at 2017 (7) Supreme 558 , the Hon'ble the Apex Court in para 18, was pleased to observe as under :

“i) Offence under Section 138 of the Act is primarily a civil wrong. Burden of proof is on accused in view presumption under Section 139 but the standard of such proof is "preponderance of probabilities". The same has to be normally tried summarily as per provisions of summary trial under the Cr.P.C. but with

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such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will apply and the Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect.

(ii)The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court.

(iii)Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused. (iv)Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may

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have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 Cr.P.C. With this approach, prison sentence of more than one year may not be required in all cases.

(v) Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation under Section 357(3) is considered inadequate, having regard to the amount of the cheque, the financial capacity and the conduct of the accused or any other circumstances'.

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Learned counsel for the Revision Petitioner further has relied upon the judgment of Gujarat High Court in the case of Kripal Singh Pratap Singh Ori vs. Salvinder Kaur Hardip Singh reported in 2004 Crl. L. J. 3786 wherein, the Gujarat High Court was pleased to observe as under:-

“31. In the circumstances, it is hereby declared that the compromise arrived between the parties to this litigation out of court is accepted as genuine and the order of conviction and sentence passed by the learned JMFC, Vadodara and confirmed in appeal by the learned Sessions Judge, Fast Track Court, Vadodara, therefore, on the given set of facts are hereby quashed and set aside as this court intends, otherwise to secure the ends of justice as provided under section 482 Cr.P.C. Obviously the order disposing Revision Application would not have any enforceable effect."

Learned counsel for the Revision Petitioner has also relied upon the judgment of Hon'ble the Apex Court in the case of Vinay Devanna Nayak vs. Ryot Seva Sahkari Bank Limited reported in AIR

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under :

2008 SC 716, wherein the Hon'ble Apex Court was pleased to observe as under :

“18. Taking into consideration even the said provision (Section 147) and the primary object underlying Section 138, in our judgment, there is no reason to refuse compromise between the parties. We, therefore, dispose of the appeal on the basis of the settlement arrived at between the appellant and the respondent.

19. For the foregoing reasons the appeal deserves to be allowed and is accordingly allowed by holding that since the matter has been compromised between the parties and the amount of Rs.45,000/- has been paid by the appellant towards full and final settlement to the respondent-bank towards its dues, the appellant is entitled to acquittal. The order of conviction and sentence recorded by all courts is set aside and he is acquitted of the charge levelled against him."

Learned counsel for the Revision Petitioner has argued that the law regarding compounding of offences under the N.I. Act is very clear and is no more res integra and the offences under the N.I. Act can be compounded even at any stage of the proceedings. He submits that in terms of the aforesaid law laid down by the Hon'ble Supreme Court, the

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parties may be permitted to compound the offence and the conviction of the petitioner be set aside.

Per contra, Mr.M.Karunanithi, the learned Government Advocate (Criminal Side) who appeared for the State assisted this Court in the matter, has vehemently opposed the submissions made by the learned counsel for the Revision Petitioner and submits that the Revision Petitioner has already been convicted by the learned trial court and the conviction order had already been upheld by the Appellate Court in the appeal.

The learned Government Advocate (Criminal Side) further submitted that the appeal has been rejected on merit and the Revision Petitioner was convicted, then where the parties or any one of them can be permitted to place compromise and to get the order of acquittal from the Court is the question. He further submitted that the present case is nothing, but a gross misuse of the process of law and thus sentence cannot be compounded on the basis of compromise as filed by the parties.

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I have heard the learned counsel for the Revision Petitioner, learned counsel for the Respondent and learned Government Advocate (Criminal Side) appearing for the State and perused the materials placed on record.

Considering the facts as narrated above, the following question arose for consideration.

'Whether the order passed by the Appellate Court confirming the conviction of the trial court under section 138 of Negotiable Instruments Act can be nullified by the High Court on the basis of compromise entered between the parties'.

Before answering the aforesaid question as framed, I shall examine the relevant provision of the B.N.S.S, as well as the Negotiable Instrument Act. I may extract Section 359 of B.N.S.S., and Section 147 of Negotiable Instruments Act.

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Section 359 B.N.S.S. - Compounding of Offences -

1) The offences punishable under the sections of the

Bharatiya Nyaya Sanhita, 2023 specified in the first two columns of the Table next following may be compounded by the persons mentioned in the third column of that Table: -

2)The offences punishable under the sections of the Bharatiya Nyaya Sanhita, 2023 specified in the first two columns of the Table next following may, with the permission of the Court before which any prosecution for such offence is pending, be compounded by the persons mentioned in the third column of that Table:--

3) When an offence is compoundable under this section, the abetment of such offence or an attempt to commit such offence (when such attempt is itself an offence) or where the accused is liable under subsection (5) of section 3 or section 190 of the Bharatiya

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Nyaya Sanhita, 2023 (45 of 2023), may be compounded in like manner.

(4)(a) When the person who would otherwise be competent to compound an offence under this section is a child or of unsound mind, any person competent to contract on his behalf may, with the permission of the Court, compound such offence;

(b) When the person who would otherwise be competent to compound an offence under this section is dead, the legal representative, as defined in the Code of Civil Procedure, 1908 (5 of 1908) of such person may, with the consent of the Court, compound such offence.

(5) When the accused has been committed for trial or when he has been convicted and an appeal is pending, no composition for the offence shall be allowed without the leave of the Court to which he is committed, or, as

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the case may be, before which the appeal is to be heard.

(6) A High Court or Court of Session acting in the exercise of its powers of revision under section 442 may allow any person to compound any offence which such person is competent to compound under this section.

(7) No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence.

(8) The composition of an offence under this section shall have the effect of an acquittal of the accused with whom the offence has been compounded.

(9) No offence shall be compounded except as provided by this section.

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Section 147 of the Negotiable Instrument Act:-

Offences to be compoundable.—Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.

I have to refer the compromise deed which is on the record for proper adjudication :- JOINT MEMORANDUM OF COMPROMISE

1.The Petitioner/Revision Petitioner was convicted in S.T.C.No.643 of 2016 by the learned District Munsifcum Judicial Magistrate, Peraiyur, and the conviction and sentence were confirmed in C.A.No.34 of 2022 by the learned IV Additional District and Sessions Judge, Madurai. Aggrieved thereby, the Petitioner filed the above Criminal Revision Case before this Hon'ble Court.

2. During the pendency of the above revision, with the intervention of elders and well-wishers, the parties have amicably settled the dispute. AS per the terms of settlement, the Petitioner has agreed to pay and the

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Respondent has agreed to receive a total sum of Rs. 2,00,000/- (Rupees Two Lakh only) in full and final settlement of all claims.

3. Out of the said amount, a sum of Rs.40,000/- has already been deposited before the Trial Court on 08.09.2025, and the balance sum of Rs.1,60,000/- has been paid to the Respondent by way of Demand Draft No.278237 dated 17.09.2025, drawn on Canara Bank, Malayapalayam Branch, Erode, which the Respondent has duly acknowledged.

4. The Respondent hereby states that he has no further claim of any nature whatsoever against the Petitioner in respect of the subject mater of this case and consents for compounding the offence under Section 147 of the Negotiable Instruments Act, 1881.

It is pray that this Hon'ble Court may be pleased to record this Joint Compromise Memo permit the compounding of the offence under Section 138 of the Negotiable Instruments Act consequently set aside the conviction and sentence passed in S.T.C.No.643 of 2016 dated 20.04.2022 by the learned District Munsifcum-Judicial Magistrate, Peraiyur, as confirmed in C.A.No.34 of 2022 dated 05.04.2025 by the learned IV Additional District and Sessions Judge, Madurai; and

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d) Acquit the Petitioner/Revision Petitioner from the charges. ”

It is well settled that inherent power of the Court can be exercised only when no other remedy is available to the litigants and nor a specific remedy as provided by the statute. It is also well settled that if an effective, alternative remedy is available, the High Court will not exercise its inherent power, especially when the Revision Petitioner may not have availed of that remedy. The power can be exercised by the High Court to secure the ends of justice, prevent abuse of the process of any court and to make such orders as may be necessary to give effect to any order under this Sanhita or Act, depending upon the facts of the given case. This Court can always take note of any miscarriage of justice and prevent the same by exercising its power. These powers are neither limited, nor curtailed by any other provision of the Sanhita or Act. However, such inherent powers are to be exercised sparingly and with caution.

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In the instant case, it is true that the appeal was dismissed and the conviction and sentence was upheld by the appellate court, but it cannot be lost sight of the fact that this Court has power to intervene in exercise of its power only with a view to do the substantial justice or to avoid a miscarriage and the spirit of compromise arrived at between the parties. This is perfectly justified and legal too.

I have considered the judgments cited by the learned counsel for the Revision Petitioner as well as by the learned Counsel for the State and other decisions of the Hon'ble Apex Court and I do not think it necessary to enlist those decisions which are taken into consideration for the purpose of the present proceedings.

In the instant case, the Revision Petitioner is invoking the inherent power of this court after dismissal of the appeal confirming his conviction and sentence. In these circumstances, I have to examine as to whether for entertaining the aforesaid case, any special circumstances are made out or not, so it can be legitimately argued and inferred and held

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that in all cases where the Revision Petitioner is able to satisfy this Court that there are special circumstances which can be clearly spelt out subsequent proceeding invoking inherent power of this court can be modified and cannot be thrown away on that technical argument as to its sustainability once the contesting parties entered into subsequent compromise.

In the case of Krishan Vs. Krishnaveni, reported in (1997) 4 SCC 241 , the Hon'ble Apex Court has held that though the inherent power of the High Court is very wide, yet the same must be exercised sparingly and cautiously particularly in a case where the applicant is shown to have already invoked the revisional jurisdiction under section 397 of the Cr.P.C. Only in cases where the High Court finds that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order was not correct, the High Court may in its discretion prevent the abuse of process or miscarriage of justice by exercising its power.

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In the case of S.W. Palankattkar & others Vs. State of Bihar, 2002 (44) ACC 168 , it has been held by the Hon'ble Apex Court that quashing of the criminal proceedings is an exception than a rule. The inherent powers of the High Court itself envisages three circumstances under which the inherent jurisdiction may be exercised:-

(i) to give effect an order under the Code,

(ii) to prevent abuse of the process of the court ;

(iii) to otherwise secure the ends of justice. The power of High Court is very wide but should be exercised very cautiously to do real and substantial justice for which the court alone exists.

For adjudicating the instant case, the facts as stated hereinabove are very relevant. Here, the Revision Petitioner has attempted to invoke the jurisdiction of this court.

I am not in agreement that when the adjudication of a criminal

offence has reached to the state of revisional level, there cannot be any compromise without permission of the court in all case including the

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offence punishable under 'N.I. Act'. The Court presently, concerned with an offence punishable under 'N.I. Act'.

It is evident that the permissibility of the compounding of an

offence is linked to the perceived seriousness of the offence and the nature of the remedy provided. On this point I can refer to the following extracts from an academic commentary [Cited from : K.N.C. Pillai, R.V.

Kelkar's Criminal Procedure, 5th Edition :

"17.2 - compounding of offences – A crime is essentially a wrong against the society and the State. Therefore, any compromise between the accused person and the individual victim of the crime should not absolve the accused from criminal responsibility. However, where the offences are essentially of a private nature and relatively not quite serious, the Code considers it expedient to recognize some of them as compoundable offences and some others as compoundable only with the permission of the court…"

32. Section 147 of NI Act begins with a non obstante clause and

such clause is being used in a provision to communicate that the

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provision shall prevail despite anything to the contrary in any other or different legal provisions. So, in light of the compass provided, a dispute in the nature of complaint under section 138 of N.I. Act, can be settled by way of compromise irrespective of any other legislation including B.N.S.S. In general and section 359 (1)(2) or (6) of the B.N.S.S. in particular. The scheme of section 359 B.N.S.S. deals mainly with procedural aspects; but it simultaneously crystallizes certain enforceable rights and obligation. Hence, this provision has an element of substantive legislation and therefore, it can be said that the scheme of section 359 BNSS does not lay down only procedure; but still, the status of the scheme remains under a general law of procedure and as per the accepted proposition of law, the special law would prevail over general law. For the sake of convenience, I would like to quote the observations of Hon'ble the Apex Court in the case of Municipal Corporation, Indore vs. Ratnaprabha reported in (AIR 1977 SC 308) which reads as under :

"As has been stated, clause (b) of section 138 of the Act provides that the annual value of any building shall "notwithstanding anything contained in any other law

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for the time being in force" be deemed to be the gross annual rent for which the building might "reasonably at the time of the assessment be expected to be let from year to year" while therefore, the requirement of the law is that the reasonable letting value should determine the annual value of the building, it has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force". It appears to us that it would be a proper interpretation of the provisions of clause (b) of Section 138 of the Act to hold that in a case where the standard rent of a building has been fixed under Section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, but, where this is not so, and the building has never been let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permissible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act, 1961. This view will, in our opinion, give proper effect to the non obstante clause in clause (b) with due

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regard to its other provision that the letting value should be "reasonable".

The expression 'special law' means a law applicable to a particular subject, which is not applicable generally but which applies to a particular or specific subject or class of subjects. Section 2(30) of Bharatiya Nyaya Sanhita, 2023 stands on the same footing and defines the phrase special law. In this connection I would like to quote the well accepted proposition of law emerging from various observations made by the Hon'ble Apex Court in different decisions as a gist of the principle and it can be summarized as under:

"When a special law or a statute is applicable to a particular subject, then the same would prevail over a general law with regard to the very subject, is the accepted principle in the field of interpretation of statute."

34. In reference to offence under section 138 of N.I. Act read with section 147 of the said Act, the parties are at liberty to compound the matter at any stage even after the dismissal of the

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revision/appeal. Even a convict undergoing imprisonment with the liability to pay the amount of fine imposed by the court and/or under an obligation to pay the amount of compensation if awarded, as per the scheme of N.I. Act, can compound the matter. The complainant i.e. person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking jurisdiction of this court. If the parties are asked to approach the Apex Court then, what will be situation, is a question which is required to be considered in the background of another accepted progressive and pragmatic principle accepted by our courts that if possible, the parties should be provided justice at the door step. The phrase "justice at the door step" has taken the court to think and reach to a conclusion that it can be considered and looked into as one of such special circumstances for the purpose of compounding the offence under section 147 of the N. I. Act.

It is also well settled that the operation or effect of a general Act may be curtailed by special Act even if a general Act contains a non

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obstante clause. But here is not a case where the language of section 359 B.N.S.S. would come in the way in recording the compromise or in compounding the offence punishable under section 138 of the N.I. Act. On the contrary provisions of section 147 of N.I. Act though starts with a non obstante clause, is an affirmative enactment and this is possible to infer from the scheme that has overriding effect on the intention of legislature reflected in section 359 B.N.S.S.

Merely because the litigation has reached to a revisional stage or that even beyond that stage, the nature and character of the offence would not change automatically and it would be wrong to hold that at revisional stage, the nature of offence punishable under Section 138 of the N.I. Act be changed. I would like to reproduce some part of the statement of objects and reasons of the Negotiable Instruments (Amendment & Miscellaneous Provisions) Act, 2002.

"The Negotiable Instrument Act 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for

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penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instrument Act, 1981, namely Section 138 to 142 in ChapterXVII have been found deficient in dealing with dishonour of cheques. Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act.

2. A large number of cases are reported to be pending under Sections 138 and 142 of the Negotiable Instruments Act in various courts in the country. Keeping in view the large number of complaints under the said Act, pending in various courts, a Working Group was constituted to review Section 138 of the Negotiable Instruments Act, 181 and make recommendations as to what changes were needed to effectively achieve the purpose of that Section. 3. ..........…

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4. Keeping in view the recommendations of the Standing Committee on finance and other R/SCR.A/2491/2018 ORDER representations, it has been decided to bring out, inter alia the following amendments in the Negotiable Instrument Act 1881, namely.

(i) xxxxxx (ii) xxxxxx

(iii) xxxxxx

(iv) to prescribe procedure for dispensing with preliminary evidence of the complainant.

(v) xxxxxx

(vi) xxxxx

(vii) to make the offences under the Act compoundable. .....…

5. xxxxxx

6. The Bill seeks to achieve the above objects."

In a commentary the following observations have been made

with regard to offence punishable under section 138 of the N.I. Act. [ Cited from : Arun Mohan, Some thoughts towards law reforms on the topic of Section 138 Negotiable Instrument Act -Tackling an avalanche of cases] :

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"... ... 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."

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.

So the intention of the legislature and object of enacting "Banking", Public Financial Institutions and the Negotiable Instrument

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Laws (Amended Act) 1988 and subsequent enactment, i.e., Negotiable Instruments (Amendment & Miscellaneous Provisions Act 2002 leads this Court to a conclusion that the offence made punishable under Section 138 of N.I. Act is not only an offence qua property but it is also of the nature of an economic offence, though not covered in the list of statutes enacted in reference to Section 514 of B.N.S.S. Thus, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage even after the dismissal of the proceedings.

In the instant case, the problem herein is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute, furthermore, the arguments on behalf of the Govt. Advocate (crl.side) on the fact that unlike Section 359 B.N.S.S, Section 147 of the Negotiable Instruments Act provides no explicit guidance as to what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court.

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I am also conscious of the view that judicial endorsement of the above quoted guidelines as given in the case of Damodar S. Prabhu (supra) 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. I have already explained that the scheme contemplated under Section 359 of the B.N.S.S. cannot be followed in the strict sense.

In view of the aforesaid discussion, the parties, in reference to offence under Section 138 N.I. Act read with Section 147 of the said Act are at liberty to compound the matter at any stage. The complainant i.e. the person or persons affected can pray to the court that the accused, on compounding of the offence may be released by invoking inherent jurisdiction of this Court.

Generally, the powers available would not have been exercised

when a statutory remedy under the law is available, however, considering

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the peculiar set of facts and circumstances it would not be in the interest of justice to relegate the parties to the court. Additionally when both the parties have invoked the jurisdiction of this Court and there is no bar on exercise of powers and the inherent powers of this court can always be invoked for imparting justice and bringing a quietus to the issue between the parties.

As discussed above, the court is inclined to hold accordingly only because there is no formal embargo in section 147 of the N.I. Act. This principle would not help any convict in any other law where other applicable independent provisions are existing as the offence punishable under section 138 of the N.I. Act is distinctly different from the normal offences made punishable under Chapter XVII of Bharatiya Nyaya Sanhita, 2023 (i.e. the offences against property).

In view of the observations and in view of the guidelines as laid down in the case of Damodar S. Prabhu (Supra) and also in view of the observations made in the judgment referred above and taking into

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account the fact that the parties have settled the dispute amicably by way of compromise, this Court is of the view that the compounding of the offence as required to be permitted.

Accordingly, the present Criminal Revision Case is disposed

of in terms of Memorandum of Compromise arrived at between the parties to this litigation out of Court. The impugned judgment passed in C.A.No.34 of 2022, dated 05.04.2025 by the learned Additional District Sessions Judge, Madurai, confirming the conviction and sentence made in S.T.C. No. 643 of 2016 on the file of the learned District Munsif-cumJudicial Magistrate, Peraiyur are hereby modified . The conviction and sentence under Section 138 of the Negotiable Instruments Act in STC.No.643 of 2016 stands anulled as this Court intends, otherwise to secure the ends of justice. The Revision Petitioner shall be treated as acquitted on account of compounding of the offence with the complainant/person affected.

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●

In the result,

The Criminal Revision Case is disposed of in terms of Joint Memorandum of Compromise dated 18.09.2025.

● The impugned conviction and sentence passed in C.A.No.34 of 2022, dated 05.04.2025 by the learned IV Additional District Sessions Judge, Madurai, confirming the conviction and sentence made in S.T.C.No.643 of 2016, dated 20.04.2022, by the learned District Munsif cum Judicial Magistrate, Peraiyur, are hereby modified .

The conviction and sentence imposed on the Revision Petitioner by both the courts below stands anulled .

The Revision Petitioner shall be treated as acquitted on account of compounding of the offence with the complainant/respondent.

Index :Yes / No 19.09.2025 Internet :Yes / No NCC :Yes / No Nsr

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To:

The Additional District Sessions Judge IV, Madurai.

The District Munsif cum Judicial Magistrate, Peraiyur

3.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai.

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SHAMIM AHMED , J.

Nsr

Order made in Crl.R.C(MD)No.875 of 2025

19.09.2025

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Issues for consideration

2 issues framed by the court

AI extract

1.
Whether a High Court can permit compounding under Section 147 NI Act and set aside a confirmed Section 138 conviction on the basis of a post-appeal compromise between the parties.
2.
Whether Section 147 NI Act has an overriding effect over Section 359 BNSS in permitting compounding at any stage.

Cases cited

Colour shows how this judgement treated each authority

AI extract

Damodar S. Prabhu vs. Sayed Babalal H.Applied
2010 (2) SCC (Cri) 1328 · Who else cites this
M/s Meters and Instruments Private Limited and another vs. Kanchan MehtaRelied on
2017 (7) Supreme 558
Kripal Singh Pratap Singh Ori vs. Salvinder Kaur Hardip SinghRelied on
2004 Crl. L. J. 3786
Vinay Devanna Nayak vs. Ryot Seva Sahkari Bank LimitedApplied
AIR 2008 SC 716 · Who else cites this
Krishan vs. KrishnaveniReferred¶27
(1997) 4 SCC 241 · Who else cites this
S.W. Palankattkar & others vs. State of BiharReferred¶28
2002 (44) ACC 168
Municipal Corporation, Indore vs. RatnaprabhaExplained¶32
AIR 1977 SC 308 · Who else cites this

Statutes considered

4 provisions across 2 enactments

AI extract

Negotiable Instruments Act, 1881138147
Bharatiya Nagarik Suraksha Sanhita, 2023359442

Parties & counsel

AI extract

petitioner
K.Balachenniappan
respondent
Jeyakrishnan

Coram

AI extract

Shamim Ahmed

Case details

As recorded by the court registry

Court: Madras HC
Decided on: 19 Sept 2025 · September
Registered: 15 Jul 2025
Case no.: CRL RC(MD)/875/2025
CNR: HCMD010576052025
Topic: Cheque Dishonour
Bench: Shamim Ahmed
Disposal: PARTLY ALLOWED

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Cite this judgement

K.Balachenniappan v. Jeyakrishnan, CRL RC(MD)/875/2025 (MAD), decided on 19 September 2025.

The Madras High Court publishes no neutral citation for this judgement — cite it by case number and date of decision.

Cases cited7

Damodar S. Prabhu vs. Sayed Babalal H.Applied
M/s Meters and Instruments Private Limited and another vs. Kanchan MehtaRelied on
Kripal Singh Pratap Singh Ori vs. Salvinder Kaur Hardip SinghRelied on

View all cases cited

Statutes4

Negotiable Instruments Act, 1881138 · 147
Bharatiya Nagarik Suraksha Sanhita, 2023359 · 442

View all statutes

Bench / Coram

Shamim Ahmed

Parties & counsel