Courts Should Prioritise Mediation in Cheque Bounce Cases & Give True Meaning to Mediation Act, 2023: Punjab & Haryana High Court
Case Name: Sonu Kumar v. Kulbir Singh
Date of Judgment: 10 March 2026
Citation: CRR-2873-2025
Bench: Justice Anoop Chitkara
Held: The Punjab & Haryana High Court held that courts should ordinarily refer cheque bounce cases under Section 138 of the Negotiable Instruments Act to mediation at the earliest stage, as the primary objective of such proceedings is recovery and compensation rather than punishment. The Court dismissed a revision petition challenging rejection of additional evidence but directed the trial court to refer the dispute to mediation.
Summary: The petitioner filed a criminal revision under Section 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023 challenging the order of the Judicial Magistrate First Class, Ludhiana dated 03 October 2025. The trial court had dismissed the petitioner’s application seeking permission to examine a handwriting and fingerprint expert to compare the complainant’s alleged signatures on a Power of Attorney with signatures appearing in a notary register.
The dispute arose from a complaint under Section 138 of the Negotiable Instruments Act filed by the respondent alleging dishonour of a cheque amounting to ₹19,49,230 issued by the petitioner in relation to business dealings. The cheque was returned unpaid due to the drawer stopping payment.
Before the High Court, the petitioner argued that expert examination of signatures was necessary to establish that the Power of Attorney relied upon by the complainant did not bear genuine signatures. It was also submitted that the parties had long-standing business relations and were willing to explore mediation to resolve the dispute.
The respondent opposed the plea, arguing that the application for expert evidence had been filed only to delay the proceedings. It was pointed out that the accused had already taken fifteen opportunities to conclude defence evidence and had not raised the issue of forged signatures during his statement under Section 313 CrPC.
The High Court examined the reasoning of the trial court and noted that the application sought comparison of signatures on a Power of Attorney with those appearing in a notary register which was only a photocopy. The Court observed that such comparison could not be undertaken with photocopies and that the plea regarding forged signatures had not been raised earlier by the accused in his statement under Section 313 CrPC. This indicated that the application was an afterthought filed at the final stage of the trial.
The Court therefore found no illegality in the trial court’s order rejecting the request for additional evidence.
While addressing the broader issue of cheque bounce litigation, the Court discussed the legislative history and objectives of the Negotiable Instruments Act. It observed that proceedings under Section 138 are essentially quasi-criminal in nature, aimed primarily at ensuring payment of the cheque amount and maintaining commercial credibility of negotiable instruments rather than imposing punitive consequences.
The Court emphasised that cheque bounce cases often consume substantial judicial time despite being disputes that essentially involve recovery of money between private parties. It noted that prolonged litigation diminishes the real value of money due to inflation and delays compensation to the complainant.
Referring to the Mediation Act, 2023, the Court observed that mediation offers a pragmatic mechanism to resolve such disputes more efficiently. Since offences under the Negotiable Instruments Act are compoundable under Section 147, parties can settle the matter at any stage of proceedings.
The Court therefore issued broader directions encouraging trial courts and sessions courts to refer pending cheque bounce complaints, appeals and revisions to mediation wherever appropriate. The Court noted that mediation promotes quicker compensation, preserves business relationships and reduces the burden on courts.
Decision: The High Court dismissed the revision petition and upheld the trial court’s order refusing permission to examine a handwriting expert. However, considering the nature of the dispute, the Court directed the trial court to refer the matter to mediation. It further clarified that if mediation fails within 30 days, the trial proceedings should continue in accordance with law.