Compounding of cheque dishonour offence on voluntary settlement can operate as acquittal even in revision.

An offence under Section 138 of the Negotiable Instruments Act was held compoundable on the basis of a voluntary settlement recorded before the Court. The compromise could be accepted even at the revisional stage under Section 401 CrPC because Section 147 of the Act makes offences under the Act compoundable notwithstanding the Code. Once composition is permitted, Section 320(8) CrPC treats it as operating as acquittal, and the conviction and sentence were set aside accordingly. The revision thus succeeded on compromise, ending the cheque dishonour prosecution and the resulting criminal liability.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded in revision on the basis of a voluntary compromise between the parties, and whether such composition entitled the petitioner to acquittal.

Analysis: Section 147 of the Negotiable Instruments Act makes every offence punishable under the Act compoundable notwithstanding the Code of Criminal Procedure. The compromise was recorded as voluntary, and the parties affirmed the terms of settlement before the Court. In this situation, compounding could be permitted even at the revisional stage under the Court's power under Section 401 of the Code of Criminal Procedure. The effect of composition under Section 320(8) of the Code of Criminal Procedure is acquittal of the accused, while Section 320(6) recognises compounding in the course of proceedings.

Conclusion: The offence was validly compounded on the basis of the settlement, and the petitioner was entitled to acquittal. The conviction and sentence under Section 138 of the Negotiable Instruments Act were set aside.

Final Conclusion: The revision succeeded on compromise, resulting in termination of the criminal liability arising from the cheque dishonour prosecution.

Ratio Decidendi: An offence expressly declared compoundable by statute may be compounded at the revisional stage on a voluntary settlement, and such composition operates as an acquittal of the accused.

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