Dilbag Rai Saini Vs Baba Shri Chand Ji Financial Capitals

Convict’s	Penal provision	Sentence
name
Dilbag Rai Saini	Section 138 of the Negotiable Instruments Act, 1881	Simple imprisonment for six months and to pay compensation equivalent of cheque amount of Rs.3,50,000/- to the complainant and in default, to further undergo simple imprisonment for two months.

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CRM-19105-2026:

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The application is allowed, as prayed. Compromise deed (Annexure P-2) is taken on record.

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ASHWANI KUMAR 2026.05.15 16:36 I attest to the accuracy and integrity of this order/judgment Punjab & Haryana High Court, Chandigarh

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CRR-2756-2025 (O&M)

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CRR-2756-2025 (O&M):

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The petitioner, who stands convicted for the commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881, (NIA), after dismissal of his appeal by the Appellate Court, has come up before this Court under Section 401 CrPC for setting aside of impugned judgments and orders passed by the trial Court and the appellate Court, mentioned above.

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The petitioner faced criminal prosecution at the hands of the private respondent because of dishonor of the cheque(s) in question. Thus, the State is not a necessary party in this revision petition.

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During the pendency of present revision petition, the petitioner has moved CRM-19104-2026 under Section 147 NI Act read with Section 320(6)/482 CrPC for compounding of offences, as the parties have settled the matter, as per compromise deed dated 01.04.2026. Since the main revision petition is being decided, no orders are required to be passed in the application.

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During the course of arguments, counsel for the petitioner submitted that the matter has been amicably settled between the parties and the petitioner has paid an amount of Rs.2,00,000/-, in lump sum, to the respondent, which is acceptable to him and now, nothing remains due or payable. It was also contended that the petitioner is first offender and sole bread-winner of his family and therefore, he is not in a position to deposit 15% of the cheque amount, as directed in Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663. However, he is ready to deposit a sum of Rs.15,000/- with the Punjab State Legal Services Authority on or before 30.05.2026.

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On the other hand, counsel for respondent no.1-complainant submitted that he has instructions to submit that respondent no.1-complainant has no objection if the present revision petition is allowed and amount of costs, as directed in Damodar S. Prabhu (Supra), are reduced.

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The jurisprudence underlying the Negotiable Instruments Act, 1881 , is that commercial transactions must be honored. The legislative intent is not to subject people to incarceration merely because their cheques have been dishonored. The object of such proceedings is primarily to secure recovery of the cheque amount by invoking the deterrent effect of a penal provision. In view of the judgment of the Hon’ble Supreme Court in Damodar S. Prabhu (Supra), it is well settled that where the entire amount has been paid, the complainant ordinarily cannot object to compounding of the offense, though 15% of the cheque amount is to be deposited by the accused with the concerned State Legal Services Authority. The relevant extract from the said judgment reads as follows:

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ASHWANI KUMAR 2026.05.15 16:36 I attest to the accuracy and integrity of this order/judgment Punjab & Haryana High Court, Chandigarh

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CRR-2756-2025 (O&M)

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[17]. “…Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent Court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance.”

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Given above, since the matter has been settled between the parties, this is a fit case where the inherent jurisdiction of the High Court under Section 401 CrPC (442 of the BNSS), supported by Section 147 of the NIA, is invoked to disrupt the prosecution and quash the proceedings mentioned above. The complaint, notice of accusation, and the proceedings captioned above are quashed and set aside. The petitioner is acquitted of the charges, and he is also exempted from payment of 15% of the cheque amount, as per the judgment of the Apex Court in Damodar S. Prabhu ( Supra ). However, he shall deposit a lump sum amount of Rs.15,000/- with the Punjab State Legal Services Authority on or before 30.05.2026. The bail bonds are accordingly discharged.

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The Revision Petition is allowed, in the terms mentioned above. All pending applications, if any, stand closed.

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	(ANOOP CHITKARA)
15.05.2026	JUDGE
Ak
Whether speaking/reasoned :	Yes
Whether reportable :	No

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ASHWANI KUMAR 2026.05.15 16:36 I attest to the accuracy and integrity of this order/judgment Punjab & Haryana High Court, Chandigarh

Dilbag Rai Saini v. Baba Shri Chand Ji Financial Capitals

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Dilbag Rai Saini v. Baba Shri Chand Ji Financial Capitals

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