🧾 Legal Learning: Sanjabij Tari v. Kishore S. Borcar (Supreme Court, 2025)
📘 Law Involved:
Negotiable Instruments Act, 1881 – Section 138
(Cheque Dishonour – Compounding Guidelines)
⚖️ Key Principle:
The Supreme Court has issued clear guidelines to tackle the rising pendency of cheque dishonour cases. Recognizing that Section 138 offences are quasi-criminal in nature, the Court emphasized that the main objective is to ensure repayment of the cheque amount, not punishment of the drawer.
🧩 Court’s Directions on Compounding:
(a) If the accused pays the cheque amount
before the recording of his evidence (that is, before beginning of defence evidence), the Trial Court may allow compounding of the offence without imposing any cost or penalty.
(b) If the accused pays the cheque amount after recording of his evidence but before the judgment is pronounced by the Trial Court, the Magistrate may allow compounding on payment of an additional 5% of the cheque amount to the Legal Services Authority or any other authority as the Court considers appropriate.
(c) If the payment of the cheque amount is made during an appeal or revision before the Sessions Court or High Court, the Court may allow compounding on the condition that 7.5% of the cheque amount is paid as cost.
(d) If the accused tenders the cheque amount before the Supreme Court, compounding may be allowed on payment of 10% of the cheque amount as cost.
💡 Learning Point:
The Court reaffirmed that the purpose of Section 138 is restitution, not retribution. The law seeks to ensure honouring of financial commitments, and courts should encourage settlement and compounding at the earliest stage to prevent delay and reduce burden on the criminal justice system.
🏛️ Essence of the Ruling:
“The objective of Section 138 is to secure payment, not to punish. Early compounding promotes both justice and efficiency.”
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