In a significant judgment, the Rajasthan High Court recently overturned a conviction in a cheque dishonour case following a settlement between the involved parties. However, the court imposed a cost amounting to 15% of the cheque's value on the petitioner, noting that the compromise was reached only after the petitioner's appeal had been rejected and a revision petition was pending.
The case was presided over by Justice Manoj Kumar Garg, who reviewed a revision petition challenging the decision of the Additional Sessions Judge. The lower court had convicted the petitioner under Section 138 of the Negotiable Instruments Act, sentencing him to one year of imprisonment and a fine. During the pendency of the revision petition, both parties arrived at a compromise. Consequently, the petitioner's counsel requested the court to set aside the imprisonment in light of the settlement.
Justice Garg referred to the Supreme Court's precedent in Damodar S. Prabhu v. Sayed Babala H. to assess the situation. The Supreme Court, in that case, had outlined guidelines for imposing costs when offences under Section 138 are compounded at various stages of legal proceedings. Applying this precedent, Justice Garg observed that since the compromise was reached after the petitioner's appeal had been rejected, it was appropriate to impose a cost of 15% of the cheque amount on the petitioner.
Accordingly, the High Court set aside the petitioner's conviction and sentence. The petitioner was directed to deposit a sum equivalent to 15% of the cheque's value with the Rajasthan State Legal Services Authority in Jodhpur within one month. The court further stipulated that if the petitioner failed to deposit the specified amount within the given timeframe, the revision petition would be listed again for appropriate orders.
This judgment underscores the judiciary's recognition of settlements in cheque dishonour cases while also emphasizing the importance of timely resolutions. By imposing a cost on the petitioner, the court aims to deter litigants from delaying settlements until the advanced stages of legal proceedings, thereby promoting efficiency and reducing the burden on the judicial system.
The case citation is Omprakash Sundra v. Pawan Kumar, 2025 LiveLaw (Raj) 12.
This decision reflects the court's commitment to balancing the interests of justice with the practicalities of legal settlements, ensuring that while parties are encouraged to resolve disputes amicably, there are also deterrents against protracted litigation and last-minute compromises.
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