Compounding of cheque dishonour offences: High Court accepted compromise, quashed conviction and appellate order, and cancelled the warrant.

A High Court accepted a genuine out-of-court compromise in a prosecution under section 138 of the Negotiable Instruments Act, where the complainant acknowledged receipt of the cheque amount and consented to quashing. It applied the principle that offences under section 138 are compoundable under section 147 of the Act, and that this special provision prevails over the restrictions in section 320 of the Code of Criminal Procedure, 1973. The Court also relied on its inherent and constitutional powers under section 482 of the Code and Articles 226 and 227 to secure the ends of justice. The conviction, appellate judgment, and arrest warrant were quashed, and the petitioner was treated as acquitted on compounding.

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Issues: Whether the High Court could accept the compromise between the parties in a prosecution under section 138 of the Negotiable Instruments Act, 1881 and quash the conviction and appellate order after dismissal of the appeal.

Analysis: The dispute was settled out of court, the complainant acknowledged receipt of the entire cheque amount and expressly consented to quashing. The governing principle applied was that offences under section 138 are compoundable under section 147 of the Negotiable Instruments Act, 1881 notwithstanding the Code of Criminal Procedure, and that the special provision prevails over the general restrictions in section 320 of the Code of Criminal Procedure, 1973. The Court also relied on its power under section 482 of the Code of Criminal Procedure, 1973 read with Articles 226 and 227 of the Constitution of India to secure the ends of justice and prevent injustice.

Conclusion: The compromise was accepted as genuine and the conviction and appellate judgment were quashed and set aside. The arrest warrant was cancelled and the petitioner was treated as acquitted on compounding.

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