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Cheque Bounce Cases: Costs Not To Be Imposed If Settlement Is Reached At The Stage Of Issuance Of Summons: SC [Read Order]

Ashok Kini
16 Aug 2019 1:20 PM GMT
Cheque Bounce Cases: Costs Not To Be Imposed If  Settlement Is Reached At The Stage Of Issuance Of Summons: SC [Read Order]
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There is no necessity of imposing cost when the parties to a cheque bounce case have amicably settled the matter at the stage of issuance of summons itself, the Supreme Court has reiterated. In Ritesh Ajmera vs. Dainik Bhaskar, the Magistrate prima facie found that there are sufficient grounds for taking cognizance of the offence and directed issuance of summons to the accused. The...

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There is no necessity of imposing cost when the parties to a cheque bounce case have amicably settled the matter at the stage of issuance of summons itself, the Supreme Court has reiterated.

In Ritesh Ajmera vs. Dainik Bhaskar, the Magistrate prima facie found that there are sufficient grounds for taking cognizance of the offence and directed issuance of summons to the accused. The petition challenging this order of Magistrate before the High Court was dismissed. During the pendency of the appeal filed against these orders before the Apex Court, the parties settled the matter. While recording the terms of compromise, the bench comprising of Justice R. Banumathi and Justice AS Bopanna said:

Since the parties have amicably settled the matter at the stage of issuance of summons itself, there is no necessity of imposing cost as per the guidelines laid down by this Court in the judgment reported in Damodar S. Prabhu vs. Sayed Babalal H.

The bench, also passed similar order [Rajendra vs. Nand Lal] while considering another matter, in which the accused was acquitted by the Trial Court on the ground that the complainant had not established that there was a legally enforceable debt, but allowing the appeal filed by the complainant, the accused was convicted by the High Court. While disposing the appeal in terms of compromise, the bench observed:

Because of the reversal of the acquittal by the High Court and the conviction recorded only by the High Court, the appellant had opportunity of negotiating for settlement in this Court after filing the appeal. In such facts and circumstances of the case, this is not a case where cost is to be imposed, as per the guidelines laid down by this Court as per the judgment reported in (2010) 5 SCC 663 (supra).

Damodar S. Prabhu vs. Sayed Babalal H.-Guidelines

In Damodar S. Prabhu case, the Supreme Court had issued the following guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence.

  • That directions can be given that the Writ of Summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused.
  • If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the Court deems fit.
  • Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs.
  • Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount. 

Click here to Read/Download Order


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