Cheque dishonour compromise accepted; revisional and inherent powers used to substitute imprisonment with compensation paid.

In a Section 138 NI Act prosecution, the High Court held that once the cheque amount had been paid and the complainant accepted the compromise, it could use its revisional and inherent powers under Sections 397, 401 and 482 CrPC, read with Section 147 NI Act, to terminate the proceedings. Treating cheque dishonour litigation as primarily compensatory, the Court found the settled dispute suitable for a pragmatic exercise of power to prevent abuse of process and secure the ends of justice. The sentence of simple imprisonment was accordingly modified and substituted by the compensation already paid.

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Issues: Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the revisional court could give effect to a compromise after payment of the cheque amount and modify the sentence in order to secure the ends of justice.

Analysis: The complaint arose from dishonour of a cheque issued towards liability. During the revision, the petitioner paid the amount accepted by the respondent and sought compounding. The Court relied on the inherent and revisional powers under Sections 397, 401 and 482 of the Code of Criminal Procedure, 1973, together with Section 147 of the Negotiable Instruments Act, 1881, and the governing principles that cheque dishonour proceedings are primarily compensatory in nature and may be brought to an end where the dispute has been settled and the complainant has been compensated. The Court treated the matter as one fit for a pragmatic exercise of power to prevent abuse of process and to secure the ends of justice.

Conclusion: The compromise and payment were accepted, and the substantive sentence of simple imprisonment was modified and substituted by the compensation already paid.

Ratio Decidendi: In a cheque dishonour case, where the complainant has been duly compensated and the parties have settled the dispute, the High Court may exercise its revisional and inherent powers, along with Section 147 of the Negotiable Instruments Act, 1881, to bring the proceedings to an end and substitute imprisonment with the compensation already paid.

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