The supreme Court, in Sanjabij Tari v. Kishore S Borcar & Anr. [2025 INSC 1158], observed that a large number of cheque bounce cases are pending and interest rates have fallen in the last few years.
Therefore, the Court modified the guidelines of compounding cheque dishonour cases issued fifteen years ago in Damodar S. Prabhu vs. Sayed Babalal H. [AIR 2010 SC 1907].
The modified Guidelines are as follows: –
- If the accused pays the cheque amount before recording of his evidence (namely defence evidence), then the Trial Court may allow compounding of the offence, without imposing any cost or penalty on the accused.
- If the accused makes the payment of the cheque amount post the recording of his evidence but prior to the pronouncement of judgment by the Trial Court, the Magistrate may allow compounding of the offence on payment of additional 5% of the cheque amount with the Legal Services Authority or such other Authority as the Court deems fit.
- Similarly, if the payment of cheque amount is made before the Sessions Court or a High Court in Revision or Appeal, such Court may compound the offence on the condition that the accused pays 7.5% of the cheque amount by way of costs.
- Finally, if the cheque amount is tendered before the Supreme Court, the aforesaid cost would increase to 10% of the cheque amount.
The Supreme Court adds that if the financial institutions/complainant asks for payment other than the cheque amount or settlement of entire loan or other outstanding dues, then the Magistrate may suggest to the Accused to plead guilty and may exercise the power under Section 255(2) and/or 255(3) of the Code of Criminal Procedure (CrPC) or 278 of the Bhartiya Nagarik Suraksha Sanhita, 2023 (BNSS) and/or give the benefit under the Probation of Offenders Act, 1958, to the Accused.
