Cheque Bounce Case Compounded: Punjab & Haryana HC Acquits Accused After Settlement
Case Name: Tejpal Yadav v. State of Haryana and Another
Citation: CRR-572-2025.
Date of Judgment: 13 August 2025.
Bench: Justice Jasjit Singh Bedi.
Held: The Punjab & Haryana High Court held that once parties have amicably settled the dispute arising from dishonour of cheques, the offence under Section 138 of the Negotiable Instruments Act, 1881, being compoundable under Section 147 of the Act read with Section 320 of the Code of Criminal Procedure, 1973, must result in acquittal of the accused. The Court allowed compounding of the offence upon payment of costs, thereby setting aside the conviction and sentence imposed by the lower courts.
Summary: The petitioner had availed a friendly loan of ₹2,50,000/- from the complainant, issuing a cheque that was dishonoured for insufficiency of funds. Following non-payment despite notice, proceedings under Section 138 NI Act were initiated. The Judicial Magistrate, Gurugram convicted the petitioner on 15/16.10.2019, sentencing him to two months’ simple imprisonment and directing compensation of ₹3,10,000/-. The appellate court upheld the conviction on 28.01.2025.
During pendency of the revision, the petitioner effected a comprehensive settlement with both complainants—O.P. Sharma and Munni Devi (his wife), who had filed parallel cheque dishonour cases—for a total of ₹5,70,000/-. Payments were duly made through deposits and demand drafts, with nothing left outstanding. Both the complainant and the State raised no objection to compounding.
Relying on its own precedents including Ramesh Chander v. State of Haryana (2007) and Vatsa Electronics v. Pala Ram (2022), the Court reiterated that once settlement is reached, the offence under Section 138 NI Act stands compounded, and acquittal follows by operation of law.
Decision: The High Court allowed the revision petition, directed compounding of the offence under Section 138 NI Act, and set aside the judgments of conviction and sentence passed by the trial court and the appellate court. The petitioner was acquitted subject to payment of ₹20,000/- as costs to the Spinal Rehab Centre, Chandigarh.