Compounding of cheque dishonour offence after conviction is permissible when parties amicably settle the dispute.

An offence under Section 138 of the Negotiable Instruments Act may be compounded under Section 147 even after conviction where the parties have amicably settled the dispute. The Himachal Pradesh HC noted that the complainant consented to compounding on release of the deposited compensation in his favour, and, because the dispute stood resolved inter se the parties, there was no impediment to accepting the settlement. The courts below were therefore set aside and the accused was acquitted after compounding was permitted in revision.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded in revision after conviction by the courts below on the basis of an amicable settlement between the parties.

Analysis: The parties placed before the Court a settlement whereby the complainant consented to compounding if the deposited compensation was released in his favour. The Court relied on Section 147 of the Negotiable Instruments Act and the governing principle that offences under the Act may be compounded even after conviction. Since the dispute stood resolved inter se the parties, there was no impediment to accepting the prayer for compounding and giving effect to the settlement.

Conclusion: The offence was validly compounded after conviction, the judgments of the courts below were set aside, and the accused was acquitted.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act may be compounded under Section 147 even after conviction if the parties have amicably settled the dispute.

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