Kiran Raj

The Supreme Court of India Division Bench of Justice M.M. Sundresh and Justice Satish Chandra Sharma set aside the Bombay High Court’s direction requiring payment of costs by an accused in a cheque dishonour case, noting that the matter had been amicably settled and the complainant did not seek any further amount. The Court also clarified that the cost-related guidelines linked to compounding stages in the Damodar S. Prabhu decision do not operate as binding rules and could not justify the High Court’s order.

The matter concerns an appellant who had been convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. His appeal before the Sessions Court was dismissed. He thereafter approached the High Court in a revision petition.

Also Read: Supreme Court Pulls Up Jharkhand High Court For Granting Bail To Murder Convicts Through Unreasoned Order; Criticises State For Inaction And Directs Immediate Surrender

The appellant had been convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and his appeal before the Sessions Court was dismissed. He subsequently filed a revision before the High Court. During the pendency of that revision, the appellant and the complainant reached a settlement, following which the High Court acquitted the appellant but directed him to deposit costs with the State Legal Services Authority by relying on the judgment in Damodar S. Prabhu v. Sayed Babalal H.

The appellant challenged only the imposition of cost before the Supreme Court. Senior Advocate Navin Pahwa submitted that Damodar S. Prabhu had been decided by invoking Article 142 of the Constitution, and therefore its directions could not be treated as binding law. He further argued that treating those directions as binding precedent would discourage settlements at the revisional stage. He also pointed out that the complainant had no objection to the settlement and that he was unable to comply with the cost requirement.

The respondents expressed no objection to an appropriate order being passed by the Supreme Court.

The Court recorded the appellant’s submissions that “the Court had invoked Article 142 of the Constitution of India in the aforesaid decision and therefore, the same cannot be treated as a law.” It further recorded the contention that “construing it to be a law would discourage settlements at the revisional stage.”

The Court noted the submission that the direction required payment not to the complainant but to the Legal Services Authority, and that “when the complainant has no objection, there cannot be any mandate of law directing the appellant to pay any further amount.”

After hearing both sides, the Court stated, “We find force in the submissions made by learned Senior counsel appearing for the appellant.” It also recorded that the respondent’s counsel expressed no objection to appropriate orders.

The Bench observed, “The law laid down in the aforementioned judgment cannot be regarded as a binding precedent, as every case must be considered on its own facts.”

The Court further stated that, in the present case, “the direction imposing costs on the appellant, to be paid to the Legal Services Authority cannot be sustained in the eye of law, particularly when the complainant does not want any further amount and the appellant has expressed his inability to comply with the same, which aspect is not in dispute.”

Also Read: Allahabad High Court Refuses To Recall Contempt Referral Against Advocate For Alleging Court “Bias And Dishonesty” During Bail Hearing

The Court directed: “We find force in the submissions made by learned Senior counsel appearing for the appellant. The learned counsel for the respondents does not have any objection to appropriate orders being passed.”

“The law laid down in the aforementioned judgment cannot be regarded as a binding precedent, as every case must be considered on its own facts. In the present case, we are inclined to hold that the direction imposing costs on the appellant, to be paid to the Legal Services Authority cannot be sustained in the eye of law.”

“The appeal is disposed of, accordingly. Pending application(s), if any, shall also stand disposed of.”

Advocates Representing the Parties

For the Petitioner: Mr. Navin Pahwa, Senior Advocate; Mr. S.S. Sobti, Advocate; Mr. Mohit D. Ram, Advocate; Ms. Sthavi Asthana, AOR

For the Respondents: Mr. Anand Dilip Landge, Advocate; Mr. Siddharth Dharmadhikari, Advocate; Mr. Aaditya Aniruddha Pande, AOR; Mr. Shrirang B. Varma, Advocate; Mr. Ashwani Kumar, AOR; Ms. Iti Sharma, Advocate; Mr. Puneet Sharma, Advocate

Case Title: Rajeev Khandelwal v. State of Maharashtra & Anr.
Case Number: Criminal Appeal arising out of SLP (Crl.) No. 14340/2025
Bench: Justice M.M. Sundresh, Justice Satish Chandra Sharma