Court has discretion to allow compounding of cheque bouncing cases: Supreme Court

Presumably with a view to easing docket explosion, the Supreme Court has held that courts have the discretion to close punitive proceedings under Section 138 of the Negotiable Instruments Act, 1881, which deals with cheque bouncing. The same was held by a Bench of Justices AK Goel and UU Lalit in an appeal from a judgment of the Punjab & Haryana High Court.

The Supreme Court Bench went into the history of Section 138 cases decided by it over the years. It was held that consent of the complainant was not required in all cases.“Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused.”

October 16th, 2017