Whether the compounding can/may be allowed at various stages of the trial only after imposition of a certain percentage of costs upon the accused ? under Neggotiable instruments Act.

Whether the compounding can/may be allowed at various

stages of the trial only after imposition of a certain percentage of costs upon the accused ? under Negotiable instruments Act.

In Damodar S. Prabhu vs. Sayed Babalal H. (2010) 5 SCC 663,

Hon'ble Supreme Court held that compounding can/may 

be allowed at various stages of the trial after imposition

 of a certain percentage of costs upon the accused. 

The guidelines are as follows:

(a) 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.

(b) 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.

(c) 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.

(d) Finally, if the application for compounding is made

before the Supreme Court, the figure would increase to 20%

of the cheque amount.

Let it also be clarified that any costs imposed in accordance

with these guidelines should be deposited with the Legal

Services Authority operating at the level of the Court before

which compounding takes place. For instance, in case of

compounding during the pendency of proceedings before a

Magistrate's Court or a Court of Sessions, such costs should

be deposited with the District Legal Services Authority.

Likewise, costs imposed in connection with composition

before the High Court should be deposited with the State

Legal Services Authority and those imposed in connection

with composition before the Supreme Court should be

deposited with the National Legal Services Authority.

However, in Madhya Pradesh State Legal Services Authority vs.

Prateek Jain and another, 2014(4) RCR (Criminal) 178 (SC) it was held

by the Hon’ble Supreme Court that where settlement is made in Lok

Adalat, the Lok Adalat can waive the cost for reasons to be recorded.

 Whether the accused can be permitted to file his

 cheif examination in the form of Affidavit in the

 cheque bounce cases?

The Apex court in the case of M/S. Mandvi Co-Op Bank

Ltd vs Nimesh B.Thakore [ 2010 (3) SCC 83 has

catagorically held that the accused has no right to file proof

affidavit for his examination-in-cheif.

Whether it is mandatory to lead evidence of financial

capacity in every case filed under section 138 of NI Act?

The Hon’ble Supreme court in the case of Tedhi Singh Vs

Narayan Dass Mahant 2022 Live Law(SC) 275 [Crl.Appeal

No 362 of 2022] held that

“Complainant Not Expected To Initially Give Evidence Of

Financial Capacity Unless Accused Disputes it in reply Notice”.