Compounding of cheque dishonour cases may justify quashing conviction where payment is made and the complainant accepts settlement.

In a cheque dishonour prosecution under Section 138 of the Negotiable Instruments Act, 1881, the High Court may use its inherent power under Section 482 CrPC, read with Section 147 of the Act, to give effect to a compromise and compound the offence when the cheque amount and agreed compensation have been paid and the complainant raises no objection. The compounding framework also requires payment of the prescribed compounding cost, including 15% of the cheque amount where compounding is sought before the High Court in revision. On that basis, the conviction and sentence were quashed and the accused was acquitted.

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Issues: Whether a conviction under Section 138 of the Negotiable Instruments Act, 1881 could be set aside and the offence compounded after payment of the cheque amount and agreed costs.

Analysis: The cheque dishonour prosecution had culminated in concurrent convictions by the courts below. The amount covered by the cheque and the compensation stood satisfied, and the complainant did not object to compounding. In such circumstances, the Court invoked its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, supported by Section 147 of the Negotiable Instruments Act, 1881, to give effect to the compromise and terminate the criminal proceedings. The Court also applied the compounding guidelines requiring payment of 15% of the cheque amount where compounding is sought before the High Court in revision.

Conclusion: The offence was compounded, the conviction and sentence were quashed, and the petitioner was acquitted, subject to payment of the stipulated amount and compounding costs.

Final Conclusion: The revision succeeded on the basis of compromise and payment, bringing the cheque dishonour prosecution to an end.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the High Court may, in exercise of its inherent jurisdiction, permit compounding and quash the conviction where the cheque amount is satisfied, the complainant accepts the settlement, and the prescribed compounding cost is directed to be paid.

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