Post-conviction compounding under the Negotiable Instruments Act permitted after settlement and full cheque payment, with conviction quashed.

An offence under Section 138 of the Negotiable Instruments Act may be compounded even after conviction, where the parties record a compromise and the cheque liability is fully satisfied. On that basis, the dispute ceased to survive for adjudication, and the conviction and sentence were quashed. The accused was consequently acquitted of the cheque dishonour charge.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded after conviction and dismissal of the appeal, on the basis of compromise between the parties, and whether the conviction and sentence were liable to be set aside.

Analysis: The parties placed a compromise deed on record and acknowledged that the cheque liability had been satisfied by payment of the entire amount due. In view of the settlement, the Court applied the principle that an offence under Section 138 of the Negotiable Instruments Act may be compounded even after conviction. Since the dispute stood fully resolved and the cheque amount had been paid, there remained no impediment to accepting compounding and granting consequential relief.

Conclusion: The offence was validly compounded and the judgments of conviction and sentence were quashed. The petitioner was acquitted of the charge under Section 138 of the Negotiable Instruments Act.

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