Cheque Bounce Cases to Be Settled at Any Stage – Delhi HC

Delhi HC

The Delhi High Court has ruled that an accused charged with dishonoring a cheque can lawfully resolve the case even outside the court during any state before the commencement of execution of punishment.

The court delivered the judgment while hearing a case involving a couple in a cheque dishonor case under Section 138 of the Negotiable Instruments (NI) Act.

Justice V K Jain, the honorable judge overseeing the trial was expected to deal with the legal complications regarding whether or not a convict can be allowed to settle such cases (dishonoring a cheque) just on the verge of pronouncement of imminent penalty.


“There is no legal bar to the compounding of such an offense, either during or even after disposal of an appeal filed either by the accused or by the complainant,” Justice Jain said.

The judge referred to the applicable legal provision while went on saying: “It would, thus, be seen that in view of the non obstante clause contained in the Section, the restrictions and limitations prescribed under CrPC with respect to compounding of offenses would not be applicable as far as compounding of an offence punishable under the provisions of the aforesaid Act is concerned.”

“Consequently, such an offence can be compounded at any stage before the sentence, if any, awarded to an accused under the provisions of the aforesaid Act is fully executed….Since, section 147 of the NI Act does not require permission of the court for compounding such an offence, no such permission is necessary and the parties therefore can enter into a compromise outside the court and then get the same recorded in the court at any point of time before the sentence is fully executed,” he added.