Post-conviction compounding under the Negotiable Instruments Act was allowed on voluntary compromise, setting aside conviction and sentence.

Compounding of an offence under Section 138 of the Negotiable Instruments Act, 1881 remains permissible after conviction under Section 147 where the parties voluntarily settle the dispute. The complainant affirmed on oath that the compromise was genuine and that the agreed compensation was to be paid, leaving no legal impediment to accepting the settlement. The High Court therefore gave effect to the compromise by setting aside the conviction and sentence, with the result that the petitioner was relieved of the criminal consequences and the complainant was entitled to receive the deposited amount.

---

---

Issues: Whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of a compromise between the parties, leading to quashing of the conviction and sentence.

Analysis: The parties placed the compromise before the Court and the complainant affirmed on oath that the settlement was voluntary and that the entire compensation amount had been agreed to be paid. The Court relied on Section 147 of the Negotiable Instruments Act, 1881 and the principle that compounding is permissible even where conviction has already been recorded. In view of the settlement and the governing legal position, there was no impediment to accepting the compromise and giving effect to it by setting aside the criminal conviction and sentence.

Conclusion: The issue was answered in the affirmative in favour of the petitioner. The offence was ordered to be compounded and the conviction and sentence were set aside, resulting in acquittal.

Final Conclusion: The criminal revision succeeded on the basis of compromise, and the petitioner was relieved from the consequences of the conviction while the complainant was entitled to receive the deposited amount.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded under Section 147 even after conviction, if the parties voluntarily settle the dispute.

---