Discharge based on compounding order cannot survive once that order is set aside, allowing criminal proceedings to continue.

Where a discharge rested entirely on a compounding order under the Customs Act, the later setting aside of that compounding order by the Supreme Court removed the foundation of the discharge. The High Court noted that discharge is not an acquittal on merits, so it does not bar further proceedings once the basis for termination has disappeared. In these circumstances, the ACMM could not rely on the earlier discharge to block the complaint, and the refusal to proceed was legally unsustainable. The criminal process could therefore continue, and the accused could be required to face trial again on the same complaint.

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Issues: Whether, after the Supreme Court set aside the compounding order and the High Court order affirming it, the discharge order passed by the ACMM could survive and the accused could be required to face trial again on the same complaint.

Analysis: The compounding of the offences under the Customs Act had formed the sole for the earlier discharge of the accused. Once the Supreme Court set aside both the compounding order and the High Court order, the foundation of the discharge disappeared. The subsequent Supreme Court order in the connected application made it clear that the Union of India could work out its rights in accordance with law. In these circumstances, the ACMM could not treat the earlier discharge as an impediment to further proceedings, and the trial court's refusal to proceed was held to be legally unsustainable. The Court also noted that a discharge is not the same as an acquittal on merits, and a fresh proceeding is not barred where the earlier termination rested only on a compounding order that was later invalidated.

Conclusion: The accused could be made to face trial again, and the orders dated 15-1-2007 and 20-2-2010 were unsustainable.

Ratio Decidendi: Where an earlier discharge rests entirely on a compounding order that is subsequently set aside, the discharge loses its foundation and the criminal process may lawfully continue, since such discharge is not an acquittal on merits.

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