Supreme Court Issues Directions For Speedy Trial Of Cheque Bounce Cases : No Need For Pre-Cognizance Summons To Accused In S.138 NI Act Case

E. Recently, the High Court of Karnataka in Ashok v. Fayaz Aahmad   MANU/KA/1743/2025 has taken the view that since NI Act is a special enactment, there is no need for the Magistrate to issue summons to the Accused before taking cognizance (Under Section 223 of BNSS) of complaints filed Under Section 138 of NI Act. This Court is in agreement with the view taken by the High Court of Karnataka. Consequently, this Court directs that there shall be no requirement to issue summons to the Accused in terms of Section 223 of BNSS i.e., at the pre-cognizance stage.

F. Since the object of Section 143 of the NI Act is quick disposal of the complaints Under Section 138 by following the procedure prescribed for summary trial under the Code, this Court reiterates the direction of this Court in In Re: Expeditious Trial of cases Under Section 138 of NI Act (supra) that the Trial Courts shall record cogent and sufficient reasons before converting a summary trial to summons trial. To facilitate this process, this Court clarifies that in view of the judgment of the Delhi High Court in Rajesh Agarwal v. State and Anr., MANU/DE/1838/2010, the Trial Court shall be at liberty (at the initial post cognizance stage) to ask questions, it deems appropriate, Under Section 251 Code of Criminal Procedure/Section 274 BNSS, 2023 including the following questions:

(i) Do you admit that the cheque belongs to your account? Yes/No

(ii) Do you admit that the signature on the cheque is yours? Yes/No

(iii) Did you issue/deliver this cheque to the complainant? Yes/No

(iv) Do you admit that you owed liability to the complainant at the time of issuance? Yes/No

(v) If you deny liability, state clearly the defence:

(a) Security cheque only;

(b) Loan repaid already;

(c) Cheque altered/misused;

(d) Other (specify).

(vi) Do you wish to compound the case at this stage? Yes/No

G. The Court shall record the responses to the questions in the order-sheet in the presence of the Accused and his/her counsel and thereafter determine whether the case is fit to be tried summarily under Chapter XXI of the Code of Criminal Procedure/Chapter XXII of the BNSS, 2023.

 IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1755 of 2010

Decided On: 25.09.2025

 Sanjabij Tari Vs. Kishore S. Borcar and Ors.

Hon'ble Judges/Coram:

Manmohan and N.V. Anjaria, JJ.

Author: Manmohan, J.

Citation: 2025 INSC 1158, MANU/SC/1336/2025.

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Section 138 NI Act: Supreme Court's Latest Guidelines on Compounding Cheque Bounce Cases (September 2025)

The Supreme Court has recently revised the guidelines for compounding dishonour of cheque cases under Section 138 of the Negotiable Instruments Act, 1881, in the judgment of Sanjabij Tari vs Kishore S. Borcar & Others, 2025, dated September 25, 2025. This modification represents a significant departure from the previous framework established in Damodar S. Prabhu vs Sayed Babalal H. (2010).

Read full judgment here: Click here.

Original Damodar Prabhu Guidelines (2010)

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What are basic principles for exercise of revisional jurisdiction by high court at the instance of a private complainant?

The High Court was exercising the revisional jurisdiction at the instance of a private complainant and, therefore, it is necessary to notice the principles on which such revisional jurisdiction can be exercised. Sub-section (3) of Section 401 of Code of Criminal Procedure prohibits conversion of a finding of acquittal into one of conviction. Without making the categories exhaustive, revisional jurisdiction can be exercised by the High Court at the instance of private complainant (1) where the trial court has wrongly shut out evidence which the prosecution wished to produce, (2) where the admissible evidence is wrongly brushed aside as inadmissible, (3) where the trial court has no jurisdiction to try the case and has still acquitted the accused, (4) where the material evidence has been overlooked either by the trial court or the appellate court or the order is passed by considering irrelevant evidence and (5) where the acquittal is based on the compounding of the offence which is invalid under the law. {Para 9}

 IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 2420 of 2009 

Decided On: 17.12.2009

Sheetala Prasad and Ors. Vs. Sri Kant and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran and J.M. Panchal, JJ.

Author: J.M. Panchal, J.

Citation:  AIR 2010 SUPREME COURT 1140, 2010 (2) SCC 190,MANU/SC/1915/2009.

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Whether unauthorized construction of a person is compounded if offence as per Compounding Byelaws is compounded?

The Act of 1973 does not contain any provision for compounding of constructions. However, there is a provision for composition of offences under Section 32 of the Act 1973 which reads as follows:-

“32. Composition of Offences.- (1) Any offence made punishable by or under this Act may either before or after the institution of proceedings, be compounded-by ¹[the Vice-Chairman (or any officer authorised by him in that behalf by General or Special order)] on such terms, including any terms as regards payment of a composition fee, as ²[the Vice-Chairman] (or such officer) may think fit.

(2) Where an offence has been compounded, the offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of the offence compounded.” {Para 24}

27. Therefore, the offences which can be compounded are the offences of prosecution/fine and there is no provision, under which, unauthorized constructions can be compounded at least under the Act. However, at the same time, the effect of Compounding Bye-laws would also be examined but one thing is clear that even in the Bye-laws of 2009 relied upon by the Development Authority as quoted hereinabove, the word “constructions” has not been mentioned, rather the word “अपराध ” (“offence”) has been used, meaning thereby, that even the Bye-laws speak of composition of “offences” and not compounding of “constructions”.

28. This Court finds that there is no provision under the Act, 1973 which entitles the Authority to go for profiteering on an illegal act of encroachment or unauthorized construction in the name of compounding. The compounding contemplated in Section 32 is certainly in respect to offences punishable under the Act. It nowhere provides that once an offence is compounded, an act, which is in violation of Plan, shall also stand regularized or become valid. The effect of compounding is provided in Sub-section (2) of Section 32 that an offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect to the "offence" compounded. This is with regard to the criminal liability fastened upon the person for committing an offence under the Act, 1973. But the prohibition contained in the Act and statutory obligation upon Authorities to set right a person who has faulted/breached such provision by taking appropriate action, e.g. demolition of building by exercising power under Section 27 has not been made un-operated when an offence is compounded. The proceeding prevented as a result of compounding an "offence" relates to offence and illegality/irregularity so prohibited/controlled under another provision. It may also be noticed that by U.P. Act No. 3 of 1997 (hereinafter referred to as "Act, 1997"), certain other offences have been provided vide Sections 26D and 28A. However, removal of any construction raised in contravention of Plan and removal of encroachment etc. are governed by a different procedure and steps which would remain uneffected by such compounding. In other words, the compounding under the Act, 1973 is to avoid the criminal liability and punishment on conviction but not to regularize a construction prohibited under the Act for which no relaxation is permissible except when the plan is amended in accordance with Section 13 of the Act.

56. There is another contention that since compounding charges have been paid and therefore, construction whatsoever raised by petitioners must be taken to be valid construction, also has no force for the same reason that petitioners have no right over the land at all. Even otherwise, we are of the view that unauthorized construction would not stand regularized on payment of compounding charges, since concept of compounding charges is not to regularize unauthorized construction but to compound an offence so that otherwise punishment in the Court of law in a trial may not be inflicted.

 ALLAHABAD HIGH COURT

Case :- WRIT - C No. - 6183 of 2016

 D.B. Kauser Vs  State Of U.P. And 4 Others

Coram: Hon'ble Kshitij Shailendra,J.

Delivered on 10.05.2023.

Neutral Citation No.-2023:AHC:102783

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Can Offence U/S 138 of the NI Act be compounded without the complainant's consent?

A perusal of Section 320 makes it clear that the provisions contained in Section 320 and the various Sub-sections is a Code by itself relating to compounding of offence. It provides for the various parameters and procedures and guidelines in the matter of compounding. If this Court upholds the contention of the Appellant that as a result of incorporation of Section 147 in the Negotiable Instruments Act, the entire gamut of procedure of Section 320 of the Code are made inapplicable to compounding of an offence under the N.I. Act, in that case the compounding of offence under Negotiable Instruments Act will be left totally unguided or uncontrolled. Such an interpretation apart from being an absurd or unreasonable one will also be contrary to the provisions of Section 4(2) of the Code, which has been discussed above. There is no other statutory procedure for compounding of offence under N.I. Act. Therefore, Section 147 of the Negotiable Instruments Act must be reasonably construed to mean that as a result of the said Section the offences under N.I. Act are made compoundable, but the main principle of such compounding, namely, the consent of the person aggrieved or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of N.I. Act.

74. For the reasons aforesaid, this Court is unable to accept the contentions of the Learned Counsel for the Appellant(s) that as a result of sanction of a scheme under Section 391 of the Companies Act there is an automatic compounding of offences under Section 138 of the Negotiable Instruments Act even without the consent of the complainant.

 IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 263 of 2012 

Decided On: 01.02.2012

 JIK Industries Limited and Ors.  Vs.  Amarlal V. Jumani and Ors.

Hon'ble Judges/Coram:

A.K. Ganguly and J.S. Khehar, JJ.

Author: A.K. Ganguly, J.

Citation: MANU/SC/0075/2012

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Whether Parents Can Give Consent On Behalf Of Minor Victim To Compromise Sexual Offence?

 It is also settled that offences which involve moral turpitude and grave offences like rape, murder etc. even if compromised cannot be quashed in exercise of High Court’s power under Section 482 Cr.P.C. inasmuch as such offences are against the State and cannot be restricted to two individuals or groups.

11. In the case in hand, the offences are grave in nature involving minor victim. The allegations are under Section 354A (2)/307 read with Section 18 of the POCSO Act. Therefore, when the offences are grave in nature and allegation is of an attempt of rape of a minor, such allegation and criminal proceeding cannot be quashed on the basis of a compromise entered into between the

families of the victim and accused inasmuch when it is a sexual offence involving a minor, the parents, in the considered opinion of this court, cannot give consent on behalf of the minor to compromise such serious offences.

THE GAUHATI HIGH COURT

KOHIMA BENCH

Case No. : CRL.REVN 5/2021

MR. LIMHATHUNG Vs THE STATE OF NAGALAND

BEFORE

 MR JUSTICE ARUN DEV CHOUDHURY

Date of Judgment/ Order :24.03.2022

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Whether an offence under S 138 of Electricity Act is compoundable?

(4) The Compounding of an offence under sub-section (1) shall be allowed only once for any person or consumer.” It will be seen that both Sections 135 and 138, which impose a maximum sentence of three years, both deal with theft of electricity. The High Court has taken a very narrow view of Section 152 by stating that an offence of theft is related stricto senso to Section 135 since that section alone deals with the offence of theft, but would not specifically refer to Section 138 which only indirectly relates to the offence of theft. Both the respondent as well as the petitioner before us have moved the High Court stating that Section 138 would also be so subsumed and have continued to argue the same position before us. We are of the view that this is correct in law inasmuch as the language of Section 152 specifically states ......”an offence of theft” which according to Stroud's Judicial Dictionary, as well as Ramanatha Iyer's Law Lexicon, states that one meaning of 'an' is 'any'. If the word 'any' is substituted for the word 'an' in Section 152, it becomes clear that any offence relating to the theft of electricity is also within the ken of Section

152. Section 138 also relates to theft of electricity, be it through maliciously injuring meters, and is therefore also within Section 152, and can therefore be compounded.

 Supreme Court - Daily Orders

Suresh Ganpati Halvankar vs The State Of Maharashtra on 22 January, 2018

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Maharashtra govt Notification on compounding fees for Motor vehicle offences- Useful for LokAdalat

 https://drive.google.com/file/d/18NmI_93dtqQbuavFkwl-aMlE72xBmgD0/view?usp=sharing

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