Compensatory character of cheque dishonour proceedings supports closure where the complainant is fully compensated.

In a prosecution under section 138 of the Negotiable Instruments Act, the governing principle applied was that the offence is primarily compensatory in character. Where the accused had already paid the complainant by a demand draft during trial and later deposited an amount said to fully compensate for the cheque liability, interest and costs during appeal, the appellate court treated the compensation as adequate and declined to disturb the acquittal. The text states that, even without consent for compounding, proceedings may be closed if the complainant has been duly compensated and the statutory object is satisfied, making interference with the appellate order unwarranted.

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Issues: Whether the appellate court's acquittal in a prosecution under section 138 of the Negotiable Instruments Act, 1881, based on the accused having deposited compensation, interest and costs sufficient to fully compensate the complainant, called for interference in appeal.

Analysis: The record showed that the accused had initially sent a demand draft during trial and later deposited an amount four times the cheque value during the appeal, which the complainant received. The governing principle applied was that an offence under section 138 is primarily compensatory in character, and even without consent for compounding, the court may close the proceedings if satisfied that the complainant has been duly compensated. The appellate court's decision to set aside the conviction was thus treated as a discretionary order resting on the adequacy of compensation and the underlying object of the statutory scheme.

Conclusion: The refusal to interfere with the acquittal was justified, and the challenge by the complainant failed.

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