Authority: High Court of Himachal Pradesh, Shimla

Order Date: 17 July 2026

Case Overview

  • Parties: Applicant/Petitioner Kartar Singh vs. Respondent No.1 HDFC Bank and Respondent No.2 (unnamed).
  • Counsel: For petitioner – Mr. Gurmeet Bhardwaj; for Respondent No.1 – Mr. Sanjay Kumar Sharma; for Respondent No.2 – Additional Advocate Generals Mr. Rajan Kahol, Mr. Vishal Panwar, with Deputy Advocates General Mr. Ravi Chauhan and Mr. Anish Banshtu.
  • Nature of Application: Filed under Section 147 of the Negotiable Instruments Act read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking compounding of the offence alleged under Section 138 of the NI Act.
  • Background Facts:
  • HDFC Bank granted a loan of Rs 10,50,000 to the father of the accused.
  • The accused (co‑applicant) issued a cheque No. 291581 dated 25‑01‑2019 for Rs 10,50,000 in favour of the bank; the cheque was returned as “Insufficient Funds” on 29‑01‑2019.
  • Legal notice dated 09‑02‑2019 was served demanding payment.
  • The accused failed to pay; the bank instituted criminal proceedings under Section 138 NI Act.
  • Trial Court convicted the accused, sentenced him to eight months’ simple imprisonment and ordered compensation of Rs 20,00,000 to the bank.
  • Appeal to the Sessions Judge, Mandi, was dismissed on 04‑01‑2025.
  • Criminal Revision No. 81 of 2025 was dismissed by this Court on 19‑06‑2026, upholding the conviction.
  • Settlement: After the 19‑06‑2026 judgment, parties entered a “One Time Settlement Scheme”; the full compensation amount was deposited with the bank, evidenced by a No‑Objection Certificate.
  • Legal Precedents Cited: Gulab Singh v. Vidya Sagar Sharma (2017), Rajasthan High Court judgment (Naresh Kumar Sharma case), Gujarat High Court decisions, Supreme Court judgment in K. Subramanian v. R. Rajathi (2010), Damodar S. Prabhu v. Sayed Babalal H. (2010), and several Supreme Court rulings on the effect of dismissal/withdrawal of Special Leave Petitions (Kunhayammed v. State of Kerala, Abbai Maligai Partnership Firm, Sunil Kumar, etc.).
  • Maintainability Issue: The court examined whether a review petition filed after the withdrawal of a Special Leave Petition is maintainable. Relying on the cited Supreme Court jurisprudence, it concluded that the review is maintainable and the earlier conviction can be set aside.

Final Outcome

  • The court exercised its power under Section 147 NI Act to compound the offence.
  • The judgment of conviction and sentence dated 19‑06‑2026 (Cr. Revision No. 81 of 2025) was recalled; all convictions were quashed and set aside.
  • The petitioner‑accused was acquitted of the offence under Section 138 NI Act and any bail bonds were discharged.
  • The petitioner was directed to pay Rs 10,000 as litigation charges to the respondent‑complainant and to deposit Rs 10,000 with the Himachal Pradesh State Legal Service Authority as a compounding fee within eight weeks, failing which penal consequences and contempt may follow.
  • The previously paid compensation of Rs 20,00,000 under the One‑Time Settlement remains with the bank.

Topics: Negotiable Instruments Act; Compounding of Offence