Compounding of cheque dishonour offence on full settlement led to acquittal, with belated compromise attracting costs

Section 138 of the Negotiable Instruments Act can be compounded on the basis of a genuine compromise where the cheque liability has been paid and accepted in full and final settlement. The record reflected a joint request for compounding by both parties, and the settlement was recognised, with the conviction and appellate affirmation set aside and the accused acquitted. Because the request for compounding was made belatedly, costs were also directed as part of the compromise disposal.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded on the basis of the parties' compromise, resulting in setting aside the conviction and acquittal of the accused.

Analysis: The record showed that the entire cheque amount had been paid and received in full and final settlement, and both sides filed a joint application seeking compounding of the offence. In view of the settlement and the statutory permissibility of compounding, the revision was allowed to the extent of recognising the compromise, while a cost was directed to be paid because the plea for compounding was raised belatedly.

Conclusion: The offence was compounded, the judgments of conviction and appellate affirmation were set aside, and the accused was acquitted.

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