Cheque dishonour offence can be compounded even at the revisional stage when a genuine compromise is verified

Section 147 of the Negotiable Instruments Act, 1881 permits compounding of cheque dishonour offences notwithstanding the Code of Criminal Procedure, 1973, and the court treated such proceedings as primarily compensatory in nature. Where the compromise between the parties was verified and found genuine, delayed compounding could still be accepted at the revisional stage, subject to payment of costs in line with Supreme Court guidelines. On that basis, the conviction and sentence under Section 138 were set aside, the offence was compounded, and the accused was acquitted subject to deposit of costs.

---

---

Issues: Whether, on the basis of compromise between the parties, the revisional court could compound the offence under Section 138 of the Negotiable Instruments Act, 1881 after conviction had been affirmed in appeal, and set aside the conviction and sentence with costs.

Analysis: Section 147 of the Negotiable Instruments Act, 1881 makes offences under the Act compoundable notwithstanding the Code of Criminal Procedure, 1973. The Court relied on the principle that cheque dishonour proceedings are primarily compensatory in nature and that compounding is permissible even at a later stage of litigation. The compromise between the parties was verified, and the Court applied the guidelines for delayed compounding laid down by the Supreme Court, which require payment of costs when compounding is sought at the revisional or appellate stage. Since the settlement was genuine, the revisional power was exercised to do real and substantial justice.

Conclusion: The revision was allowed, the conviction and sentence were set aside, the offence under Section 138 of the Negotiable Instruments Act, 1881 was compounded, and the petitioner was acquitted subject to deposit of costs.

---