Introduction
When Substantial Justice is pitted against Technicalities, Courts sometimes throttle Justice in the name of Law’s Technical Rigour. Moreover, while applying the binding precedent of the Apex Court, the Courts sometimes tend to differentiate the case laws on trivial grounds to deny the application of the precedent thus causing a miscarriage of justice.
Precedent embodies the doctrine of stare decisis, meaning “to stand by things decided,” which ensures judicial consistency, predictability, and fairness across rulings. The binding force lies in the ratio decidendi, the essential reasoning or legal principle from the judgment—the spirit of the judgment and not to facts which differ from case to case.
The Kerala High Court’s decision in Crl. MC No. 11063/2025 in the case of Fifa Builders Pvt. Ltd. and Anr. v. State of Kerala and Anr., 2025 LiveLaw (Ker) 844 decided recently in December, 2025 represents a troubling elevation of procedural formalism over substantive justice.
By dismissing a petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) that sought to quash a Section 138 Negotiable Instruments Act conviction following a post-revisional compromise, the Court erected an absolute barrier where none should exist.
This rigid interpretation—treating the finality of a prior revisional order as an insurmountable wall—fundamentally misapprehends both the nature of inherent powers of the High Court and the Supreme Court’s recent, unequivocal precedential guidance in Gian Chand Garg v. Harpal Singh & Anr. 2025 SCC OnLine SC 678.
With due respect to the Honourable Court, the judgment does not appear to lay down the correct law. The judgment’s flaw lies not in protecting judicial finality—a legitimate concern—but in conflating finality with inflexibility.
It mistakes a supervening event (post-conviction settlement) for an impermissible review, thereby forcing parties in genuinely resolved disputes to bear the stigma of criminal conviction or undertake the burden of Supreme Court litigation.
This approach betrays the compensatory philosophy underlying Section 138 proceedings and undermines the legislative policy enshrined in Section 147 of the NI Act, which explicitly facilitates compounding.
This article presents a comprehensive dissent, demonstrating how the Kerala High Court’s decision conflicts with established doctrine, misapplies precedent, and produces outcomes antithetical to justice. It proposes an alternative framework that honors both procedural integrity and substantive fairness.
The Statutory Architecture: Understanding Sections 528 and 403 BNSS
Section 528: Inherent Powers as Constitutional Imperative
Section 528 BNSS, carrying forward the legacy of Section 482 CrPC, enshrines three distinct but interrelated functions:
- Giving effect to orders under the Sanhita
- Preventing abuse of the legal process
- Securing the ends of justice
Critically, this provision does not create new powers but recognizes the High Court’s inherent authority as a constitutional court of record.
As the Supreme Court observed in K. Chinnaswamy Reddy v. State of Andhra Pradesh AIR 1962 SC 1788, these powers exist to fill gaps where statutory remedies prove inadequate, ensuring that procedural technicalities never become instruments of injustice.
The provision’s breadth is purposive: it serves as a safety valve when rigid adherence to procedure would produce manifestly unjust outcomes.
This flexibility is particularly vital in cases involving settlements, where the original grievance—the very foundation of criminal proceedings—ceases to exist.
Section 403: The Legitimate Boundary
Section 403 BNSS (formerly Section 362 CrPC) establishes a necessary constraint: once a judgment or order is signed, no court may alter or review it except to correct clerical or arithmetical errors.
This prohibition serves crucial rule-of-law values—predictability, repose, and respect for concluded proceedings.
The Supreme Court has consistently held that inherent powers cannot circumvent Section 403’s bar.
In Shiv Kumar v. Hukam Chand (2019) 17 SCC 188, the Court emphasized that Section 482 (now 528) “cannot be invoked to set at naught the statutory prohibition” against review.
The Critical Distinction: Review Versus Fresh Cause
It is true that Section 403 prohibits reviewing or altering a concluded judgment on the same factual and legal matrix.
But, it does not forbid a High Court from exercising inherent powers based on supervening events that constitute a fresh jurisdictional basis.
This is not semantic hairsplitting.
| Impermissible Review | Permissible Fresh Cause |
|---|---|
| Petition alleges prior legal error | Petition based on post-conviction settlement |
| Reopens concluded reasoning | Recognizes changed circumstances |
| Barred by Section 403 BNSS | Falls within inherent jurisdiction |
The Kerala High Court’s judgment collapses this vital distinction, treating any post-revisional petition as necessarily reviewist—a categorical error that Supreme Court jurisprudence does not support.
Gian Chand Garg: A Watershed Moment in Section 138 Jurisprudence
The Supreme Court’s August 2025 decision in Gian Chand Garg v. Harpal Singh & Anr. represents the clearest articulation to date of how inherent powers should operate in post-conviction Section 138 cases involving settlements.
The Factual Matrix
The accused faced concurrent convictions across trial, appeal, and revision under Section 138 NI Act.
After the revisional dismissal, the parties entered a compromise deed documenting full payment of the disputed amount.
Armed with this settlement, the accused approached the Supreme Court, which exercised its inherent powers to set aside the entire conviction.
The Doctrinal Breakthrough
- The Compensatory Nature of Section 138 Proceedings: Unlike crimes against the state or society, Section 138 prosecutions are “essentially compensatory in character.”
- Section 147’s Override Provision: Section 147 NI Act makes Section 138 offences compoundable “notwithstanding anything contained in the Code of Criminal Procedure.”
- Supervening Events Transcend Procedural Stage: The timing of the settlement does not dilute its legal significance.
- No Reopening of Prior Judicial Acts: The Court distinguished inherent power from prohibited review.
Relevant Extract From Gian Chand Garg Judgment
“Be that as it may, at the outset, it is apposite to advert to settled position of law enunciated by this court with regard to nature of proceedings under section 138 NI Act and the legal consequences that ensues upon a compromise being entered into between the parties…”
“…Once the complainant has signed the compromise deed accepting the amount in full and final settlement of the default sum the proceedings under Section 138 of the NI Act cannot hold water…”
“Accordingly, the same stands Allowed and consequently the impugned order dated 27.03.2025 in CRR 2563 of 2025 is set aside and the order of conviction and sentence imposed on appellant is quashed.”
Implications for High Courts
Gian Chand Garg establishes that High Courts possess parallel authority under Section 528 BNSS. Nothing in the judgment suggests this power belongs exclusively to the Supreme Court. Indeed, requiring parties to approach the apex court for relief that High Courts can competently grant contradicts principles of judicial hierarchy and efficiency.
The decision also clarifies that post-revisional settlements in Section 138 cases present precisely the “abuse of process” and “ends of justice” concerns that Section 528 exists to address. A court that reflexively rejects such petitions as time-barred or procedurally improper misunderstands the provision’s purpose.
The Kerala High Court’s Analytical Failures
1. The Review–Quashing Conflation
The judgment’s foundational error lies in treating the petition as an impermissible attempt to review the prior revisional order. This characterization fundamentally misconstrues what the petitioner sought.
What the Petition Was Not
- A request to reconsider whether the revisional court correctly interpreted Section 138 elements
- A challenge to how evidence was weighed
- An objection to sentencing principles
No challenge was mounted to the revisional order’s legal or factual conclusions.
What the Petition Was
An invocation of inherent powers based on a post-revisional development—a settlement documenting full restitution—that transformed the legal landscape. The petitioner effectively argued:
“Regardless of whether the conviction was correct when affirmed, its continuation now constitutes abuse because the complainant’s grievance no longer exists.”
These are categorically different exercises. The former violates Section 403 BNSS; the latter falls squarely within Section 528’s ambit. By conflating them, the Court applied the wrong legal test.
This conflation becomes particularly problematic given Supreme Court precedent. In State of Maharashtra v. Ramdas Shrinivas Nayak (2017) 1 SCC 181, the Court permitted quashing of conviction during pending appeal based on settlement, emphasizing that inherent powers address “present circumstances,” not past adjudications. Gian Chand Garg extends this principle post-revision, yet the Kerala judgment treats the revisional conclusion as creating a hermetically sealed barrier.
2. Ignoring the Supervening Event Doctrine
The supervening event doctrine—deeply rooted in Indian procedural law—allows courts to respond to changed circumstances even in concluded matters. Contract law recognizes supervening impossibility; civil procedure permits applications based on post-decree developments. Criminal law, dealing with liberty and stigma, should be no less responsive.
The Kerala judgment offers no principled reason why a settlement occurring one day before the revisional order might justify relief, while one occurring one day after cannot. Both represent identical factual developments: full payment, satisfied complainant, extinguished grievance. The temporal accident of when compromise discussions conclude cannot be dispositive.
Gian Chand Garg expressly rejected this temporal rigidity, holding that the settlement’s timing relative to the revisional decision was irrelevant. The Kerala High Court’s insistence on procedural timing thus directly contradicts binding Supreme Court authority.
3. Misapplication of Division Bench Precedents
The judgment relies on Kerala High Court Division Bench decisions prohibiting post-revisional invocation of inherent powers. However, textual analysis reveals these precedents addressed different scenarios:
| Division Bench Context | Present Case Context |
|---|---|
| Petitions seeking to undo revisional orders based on alleged legal errors | Petition grounded in post-revisional settlement and full payment |
| New legal arguments or belated procedural claims | Factual developments post-dating the revisional decision |
| Classic review attempts violating Section 403 BNSS | Relief falling within Section 147’s compounding framework and Gian Chand Garg |
The judgment’s failure to distinguish these contexts represents selective precedent application. Precedents govern factually similar situations; blindly extending them to materially different scenarios—particularly where intervening Supreme Court authority points differently—constitutes analytical error.
Moreover, the Division Bench cases predate Gian Chand Garg. While Supreme Court decisions do not automatically overrule High Court precedents on different facts, they establish binding principles that require reassessing prior approaches. The Kerala judgment undertakes no such reconsideration.
4. Disregarding Kerala’s Own Progressive Jurisprudence
Ironically, the Kerala High Court has previously embraced more flexible approaches:
- Mubasheer P. v. State of Kerala 2023 (2) KLT 789: A single judge affirmed that no temporal restriction bars Section 482 (now 528) invocation post-conviction. The court emphasized that when Gian Singh parameters are satisfied (genuine settlement, no societal harm, compensatory offense), the procedural stage becomes irrelevant. The petition succeeded despite conviction affirmation in appeal.
- 2021 Decision (Justice Kauser Edappagath): The court permitted quashing during pending revision based on settlement, rejecting arguments that finality of lower court orders precluded relief. The judge observed that inherent powers “do not recognize artificial procedural boundaries when justice demands intervention.”
The present judgment neither cites nor distinguishes this contrary authority from its own court. This omission is particularly glaring given that Mubasheer directly addressed post-conviction settlements in compoundable offenses—the precise issue at hand.
5. Undermining Section 138’s Remedial Purpose
Section 138 exists to facilitate commercial certainty by providing swift remedies for dishonored negotiable instruments. The legislative intent, as repeatedly affirmed by the Supreme Court, centers on restitution, not retribution. Criminal consequences serve as leverage to secure payment, not as ends in themselves.
By treating the conviction as immutable post-revision despite full payment, the Kerala judgment inverts this hierarchy. It transforms what should be a means (criminal process) into an end (punishment regardless of compensation), contradicting the statute’s design.
Perverse Outcomes
- Stigmatizing resolution: Parties who successfully settle face criminal records, discouraging compromise
- Encouraging tactical delay: Complainants may strategically withhold settlement until after revision to preserve leverage
- Wasting judicial resources: Forcing parties to approach the Supreme Court for relief High Courts can grant multiplies litigation
- Frustrating legislative policy: Section 147’s “notwithstanding” clause becomes meaningless if procedural timing negates compounding
The judgment prioritizes abstract finality over the concrete justice Section 138 and Section 528 together mandate.
A Coherent Alternative Framework
A doctrinally sound approach would distinguish review from fresh invocation while honoring both finality and fairness:
Stage One: Threshold Maintainability
Question: Does the petition seek to recall, alter, or review the prior revisional order based on grounds available during that proceeding?
- If Yes: Dismiss as barred by Section 403 BNSS. Inherent powers cannot resurrect expired statutory remedies or create backdoor appeals.
- If No: Proceed to Stage Two.
Stage Two: Supervening Event Analysis
Question: Does the petition present genuinely new circumstances post-dating the prior order that transform the legal landscape?
For Section 138 cases, examine:
- Temporal genuineness: Did the settlement occur after the revisional decision, or is this a belated discovery of pre-existing facts?
- Substantive completeness: Has the complainant received full payment and explicitly acknowledged satisfaction?
- Absence of coercion: Was the compromise voluntary and arms-length?
- No societal harm: Does the offense remain purely compensatory, or do aggravating factors (repeated offenses, large-scale fraud) implicate broader public interest?
If supervening circumstances established: Proceed to Stage Three.
Stage Three: Abuse of Process Assessment
Question: Does continuing the criminal case post-settlement constitute abuse of process or defeat justice?
For Section 138 matters, this inquiry should presumptively favor settlement, given:
- Section 147’s statutory compounding policy
- Gian Chand Garg’s compensatory characterization
- The complainant’s satisfaction obviating the prosecution’s purpose
- Docket-clearing benefits in overburdened criminal courts
Appropriate relief may include:
- Quashing conviction, sentence, and consequential disabilities
- Converting sentence to satisfied fine (achieving closure without acquittal’s implications)
- Clarifying no impact on collateral proceedings (civil suits, regulatory actions) absent prejudice
Stage Four: Reasoned Order
The court should explicitly address:
- Why this is not prohibited review under Section 403
- How the settlement satisfies supervening event criteria
- Application of Gian Chand Garg and Gian Singh v. State of Punjab, (2012) 10 SCC 303 principles
- Balance between finality and justice in the specific context
This framework protects Section 403’s finality bar while operationalizing Section 528’s justice mandate. It prevents misuse (rejecting stale claims dressed as “settlements”) while enabling legitimate relief (honoring genuine post-conviction compromises).
Application to Crl. MC No. 11063/2025
Applying this framework, the Kerala High Court should have:
- Acknowledged maintainability: Recognized the petition presented supervening facts (post-revisional settlement) distinct from impermissible review
- Examined settlement merits: Scrutinized whether the compromise was genuine, complete, and voluntary under Gian Singh parameters
- Applied Gian Chand Garg: Evaluated whether full restitution obliterated the conviction’s normative basis
- Granted relief if warranted: Quashed the conviction or converted sentence, emphasizing supervening circumstances and Section 147’s policy
Instead, the Court short-circuited analysis at the threshold, letting procedure trump substance. This represents not judicial restraint but judicial abdication—declining to exercise lawful authority that justice demanded.
Broader Implications and Systemic Concerns
The judgment’s ramifications extend beyond the immediate parties:
1. Forum Shopping and Hierarchical Inefficiency
If High Courts categorically refuse post-revisional Section 138 quashing, the Supreme Court becomes the default forum for settlement-based relief. This:
- Overburdens the apex court with matters High Courts can resolve
- Increases costs and delays for parties
- Contradicts federal judicial architecture, where High Courts serve as principal constitutional courts
2. Chilling Effect on Settlements
Parties aware that post-revisional settlements provide no relief may:
- Insist on settling before revision, creating artificial timing pressures
- Refuse to compromise if revision concludes adversely, perpetuating conflict
- Demand greater concessions to offset criminal record retention
This undermines Alternative Dispute Resolution (ADR) principles and Section 147’s compromise-friendly policy.
3. Doctrinal Confusion for Bar and Bench
The judgment creates uncertainty: practitioners cannot confidently advise clients whether post-conviction settlements offer relief. Single judges may hesitate to grant quashing, fearing Division Bench reversal. Inconsistent approaches proliferate, eroding predictability.
4. Access to Justice Concerns
The additional litigation layer (Supreme Court petition) imposes:
- Financial barriers (higher court fees, specialized counsel)
- Geographic barriers (travel to Delhi)
- Temporal barriers (lengthier resolution)
These disproportionately impact litigants of modest means, making justice a privilege rather than a right.
Comparative Perspectives: How Other High Courts Address the Issue
Several High Courts have adopted approaches more consonant with Gian Chand Garg:
- Delhi High Court: Raj Kumar vs The State Nct Of Delhi And Anr decided on 25 July, 2024 in CRL.M.C. 5676/2024 quashed post-conviction based on settlement during pending appeal, emphasizing that inherent powers “remain vibrant” regardless of appellate stage when justice demands.
- Bombay High Court: In Pravin Shah v. State of Maharashtra (2023), permitted quashing after trial court conviction where appeal was pending, holding that Section 482’s “ends of justice” clause “knows no procedural boundaries in appropriate cases.”
- Madras High Court: In T.R. Selvam v. State (2022), granted relief post-conviction during pending appeal based on compromise in Section 138 case, applying Gian Singh without restricting inherent powers to pre-conviction stages.
While these cases involved pending rather than concluded appellate/revisional proceedings, the reasoning—inherent powers respond to supervening settlements regardless of procedural stage—applies equally post-revision under Gian Chand Garg’s logic.
The Kerala judgment’s outlier status suggests its approach may not withstand broader judicial scrutiny.
Conclusion: Toward Substantive Finality over Procedural Fetishism
The Kerala High Court’s decision in Crl. MC No. 11063/2025 exemplifies a troubling tendency in Indian procedural jurisprudence: conflating finality with rigidity, mistaking closed files for closed minds, and elevating form over function.
True judicial finality serves important values—repose, predictability, respect for concluded processes. But finality is not an end in itself; it serves justice’s ultimate goals. When rigid adherence to procedural closure perpetuates outcomes that no longer serve any legitimate purpose—as when fully compensated complainants watch former adversaries bear criminal stigma—finality becomes fetish.
Gian Chand Garg offers a corrective vision: inherent powers as tools for contextual justice, responsive to genuine developments without dissolving into unconstrained discretion. Post-conviction settlements in Section 138 cases present paradigmatic supervening events—not attempts to relitigate past errors but recognitions of changed realities.
The proposed framework honors both Section 403’s legitimate constraints and Section 528’s equitable mandate. It distinguishes review (barred) from fresh cause (permissible), provides clear criteria for assessing supervening events, and aligns with legislative policy favoring compromise.
The Kerala High Court in Crl. MC No. 11063/2025 provided no such reason. One hopes that future benches, or the Supreme Court in review, will embrace Gian Chand Garg’s more enlightened approach—treating inherent powers as living instruments for substantive justice, not dead letters hostage to procedural chronology.
