Rajasthan High Court Quashes Conviction in Cheque Bounce Case Following Compromise

Shamsuddin Acquitted After Settlement, Must Pay 7.5% of Cheque Amount as Cost

In a significant ruling, the Rajasthan High Court has quashed the conviction and sentence of Shamsuddin, who was previously found guilty under Section 138 of the Negotiable Instruments Act, 1881, pertaining to a cheque bounce case. The decision came after both parties reached a settlement, with the court emphasizing the importance of compromise in such cases to alleviate the judicial burden.

The court, presided over by Justice Mukesh Rajpurohit, heard the criminal revision petition filed by Shamsuddin against the orders of the Special Judicial Magistrate and Special Judge SC/ST (Prevention of Atrocities) Cases, Udaipur. Initially, Shamsuddin was sentenced to one year's simple imprisonment and a fine of Rs. 3,00,000. However, a settlement deed executed on October 8, 2025, confirmed that the respondent had received the entire outstanding amount, leading to the petitioner's acquittal.

The court referenced several Supreme Court judgments, notably the cases of Damodar S. Prabhu and Sanjabij Tari, which provide guidelines for compounding offences under Section 138. The apex court had previously emphasized the need for a graded scheme for imposing costs on delayed compounding to discourage undue litigation delays. In light of these guidelines, the Rajasthan High Court imposed a cost of 7.5% of the cheque amount on Shamsuddin, to be deposited with the Rajasthan State Legal Services Authority within a month.

Justice Rajpurohit's judgment highlighted the compoundable nature of offences under the Negotiable Instruments Act, stressing the importance of encouraging settlements even at the revision stage. The court's decision underscores the judiciary's focus on resolving disputes amicably and efficiently, reducing the burden on the legal system while ensuring justice is served.

Bottom Line:

Section 138 Negotiable Instruments Act - Conviction and sentence quashed based on compromise between parties, subject to deposition of cost as per Apex Court guidelines.

Statutory provision(s): Section 138 Negotiable Instruments Act, Section 147 Negotiable Instruments Act, Section 5 of the Limitation Act

Shamsuddin v. State of Rajasthan, (Rajasthan) : Law Finder Doc Id # 2795591