Compounding of cheque dishonour offence allowed after settlement, with conviction orders set aside and appeals allowed.

On a settlement reached during the pendency of the appeals, the Supreme Court permitted compounding of the offence under Section 138 of the Negotiable Instruments Act. The compromise terms were placed before the Court, and that settlement formed the basis for allowing compounding. As a result, the conviction orders passed by the Trial Court and the High Court were set aside and the appeals were allowed.

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Issues: Whether, on the basis of settlement between the parties, the offence punishable under Section 138 of the Negotiable Instruments Act could be compounded and the conviction orders sustained by the Trial Court and the High Court set aside.

Analysis: The parties had entered into a settlement during the pendency of the appeals and placed the terms of settlement before the Court. In view of that settlement, permission was granted to compound the offence.

Conclusion: The offence under Section 138 of the Negotiable Instruments Act was permitted to be compounded, and the orders of the Trial Court and the High Court were set aside, resulting in allowance of the appeals.

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