Munusamy Vs M/S.Sree Gokulam Chits and Finance Company Ltd. — Cheque Dishonour | Madras HC (2026)

Munusamy Vs M/S.Sree Gokulam Chits and Finance Company Ltd. — Cheque Dishonour | Madras HC (2026)

What the court decided

AI extract

Outcome

Both Criminal Revision Cases allowed in terms of the Settlement Agreement; judgments of conviction in C.A.Nos.326 & 327 of 2023 and the underlying convictions/sentences in S.T.C.Nos.1046 & 1047 of 2017 set aside; petitioner acquitted of the offence under Section 138 of the Negotiable Instruments Act; parties permitted to compound the offence; fine amount, if any paid, to be refunded; bail bond, if any executed, stands discharged.

Issue for consideration

Whether the convictions imposed under Section 138 of the Negotiable Instruments Act (confirmed in C.A.Nos.326 & 327 of 2023) should be set aside in the criminal revisions, in view of the Settlement Agreement arrived at in mediation, permitting the parties to compound the offence.

Court's answer

In view of the Settlement Agreement and considering the nature of the offence, this Court permits the parties to compound the offence.

Ratio / Principle

The judgments of conviction passed in C.A.Nos.326 & 327 of 2023 (dated 21.11.2024), confirming the judgments of conviction and sentence dated 31.07.2023 in S.T.C.Nos.1046 & 1047 of 2017, are hereby set aside.

Key takeaways

The Criminal Revision Cases are allowed in terms of the Settlement Agreement and the petitioner is acquitted of the offence under Section 138 of the Negotiable Instruments Act.ratio¶25

Detailed headnote1 paragraphs

Criminal revisions (Crl.R.C.Nos.35 & 53 of 2025) under Sections 438 r/w 442 BNSS against convictions under Section 138 of the Negotiable Instruments Act, confirmed by the III Additional District and Sessions Court, Gobichettipalayam, in C.A.Nos.326 & 327 of 2023 (judgments dated 21.11.2024), affirming the convictions and sentences dated 31.07.2023 in S.T.C.Nos.1046 & 1047 of 2017 (Judicial Magistrate No.1, Gobichettipalayam). Pending the revisions the parties were referred to mediation and executed a Settlement Agreement, pursuant to which the petitioner paid the entire sum of Rs.22,50,000/- due (with interest), acknowledged by the respondent's counsel. The Court took the agreement on record, permitted the parties to compound the offence considering its nature, set aside the appellate and trial-court judgments of conviction, acquitted the petitioner, allowed the revisions in terms of the agreement, and directed refund of any fine paid and discharge of any bail bond.

Crl.R.C.Nos.35 & 53 of 2025

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 19.01.2026

CORAM:

THE HONOURABLE MR. JUSTICE SUNDER MOHAN

Crl.R.C.Nos.35 & 53 of 2025

Munusamy ...Petitioner in both Revisions

-Vs-

Sree Gokulam Chits and finance Company Ltd. Rep by its. M.D.A.M.Gopalan, Rep by POA Ram Kumar, Branch Manager, Gobichettipalayam, No.65, 1^st Floor, SrePariyur Towers, Gobichettipalayam, Erode District.

...Respondent in both Revisions

COMMON PRAYER: Criminal Revision Petitions are filed under Section s 438 r/w 442 of BNSS, to set aside the conviction imposed in the Judgments dated 21.11.2024 made in C.A.Nos.326 & 327 of 2023 on the file of the Ld.IIIrd Additional District and Sessions Court, Gobichettipalayam confirming the judgments dated 31.07.2023 made in S.T.C.Nos.1046 & 1047 of 2017 on the file of the Ld. Judicial Magistrate No.1, Gobichettipalayam. In Both Revisions For Petitioner : Mr.M.Ganesh, for Mr.N.Manoharan For Respondent : Mr.L.Rajasekar

1/4

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

COMMON ORDER

Crl.R.C.Nos.35 & 53 of 2025

The petitioner has preferred the above revisions challenging the judgments passed by the learned III Additional District and Sessions Judge, Erode, in C.A.Nos.326 & 327 of 2023 dated 21.11.2024; confirming the judgments of the learned Magistrate convicting the petitioner for the offence under Section 138 of the Negotiable Instruments Act, and sentenced him as

below;

*CRL.RC*	Se	*ntence imposed*
35/2023	To undergo one ye pay the cheque compensation to months	ar Simple Imprisonment and to amount of Rs.5,69,226/- as the respondent within two
53/2023	To undergo one ye pay the cheque compensation to months	ar Simple Imprisonment and to amount of Rs.4,49,776/- as the respondent within two

Pending the above Revisions, the parties were referred to Mediation.

It appears they have since appeared before the Mediator and arrived at a Settlement Agreement before the Mediator.

3.As per the said Settlement Agreement, the petitioner has paid the entire sum of Rs.22,50,000/- which is due to the respondent (along with interest), which is acknowledged by the learned counsel for the respondent. 2/4

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

Crl.R.C.Nos.35 & 53 of 2025

4.The Settlement Agreement is taken on record and shall be treated as a part and parcel of this order.

In view of the Settlement Agreement and considering the nature of the offence, this Court permits the parties to compound the offence. Accordingly, the judgments of conviction passed by the learned III Additional District and Sessions Judge, Gobichettipalayam, in C.A.Nos.326 & 327 of 2023 dated 21.11.2024, confirming the judgments of conviction and sentence dated 31.07.2023 passed by the learned Judicial Magistrate No.1, Gobichettipalayam, in S.T.C.Nos.1046 & 1047 of 2017, are hereby set aside. The Criminal Revision Cases are allowed in terms of the above Settlement Agreement and the petitioner is acquitted of the offence under Section 138 of the Negotiable Instruments Act. The fine amount, if any, paid by the petitioner shall be refunded. The bail bond, if any, executed shall stand discharged.

19.01.2026

Tsg

3/4

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

Crl.R.C.Nos.35 & 53 of 2025

SUNDER MOHAN, J.

Tsg

To

1.The III Additional District and Sessions Court, Gobichettipalayam.

2. Judicial Magistrate No.1, Gobichettipalayam

Crl.R.C.Nos.35 & 53 of 2025

19.01.2026

4/4

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