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of <h1>Cheque Bounce Conviction Overturned After Compromise; 15% Fee Imposed for Delayed Settlement.</h1> The revisionist's conviction under Section 138 of the Negotiable Instruments Act was set aside following a compromise with the opposite party, who ... Dishonor of Cheque - insufficiency of funds - compounding of offence under Negotiable Instruments Act - HELD THAT:- The law regarding compounding of offence under Negotiable Instruments Act is no more res integra and the offences under the said Act can be compounded at any stage of the proceedings. The Hon'ble Supreme Court in the case of K. M. Ibrahim vs. K.P. Mohammad and another [2009 (12) TMI 903 - SUPREME COURT] where it was held that Section 147 of the aforesaid Act does not bar the parties from compounding an offence under Section 138 even at the appellate stage of the proceedings. Taking into account the fact that the parties have agreed to end the proceedings by way of compromise and the opposite party no.2 has already received the amount of cheque along with interest/ cost and he does not want to pursue the proceedings against the revisionist, this Court deems it appropriate to compound the offence on the basis of compromise deed dated 10.11.2020 entered into between the parties - in case the revisionist deposits 15% of the cheque amount to the High Court Legal Services Committee, Allahabad within the stipulated period, the judgment and sentence dated 06.09.2018 passed by the trial Court duly confirmed by the appellate court vide judgment dated 01.02.2020, is set aside. Revision allowed. Issues Involved:1. Conviction under Section 138 of the Negotiable Instruments Act.2. Compounding of the offense.3. Guidelines for compounding at different stages of litigation.4. Payment of costs for delayed compounding.Issue-Wise Detailed Analysis:1. Conviction under Section 138 of the Negotiable Instruments Act:The revisionist was convicted under Section 138 of the Negotiable Instruments Act for issuing a cheque that was dishonored due to insufficient funds. The trial court sentenced the revisionist to one year of rigorous imprisonment and imposed a fine of Rs. 3,30,000/-, with an additional six months of imprisonment in case of default. This conviction was upheld by the appellate court.2. Compounding of the Offense:The revisionist and the opposite party reached a compromise, as evidenced by a deed dated 10.11.2020. The opposite party confirmed receipt of the entire cheque amount along with interest and expressed no desire to continue the criminal proceedings. The law regarding the compounding of offenses under the Negotiable Instruments Act allows for compounding at any stage of the proceedings. The Supreme Court has consistently held that once an offense under Section 138 is compounded, the conviction should be set aside.3. Guidelines for Compounding at Different Stages of Litigation:The Supreme Court has laid down guidelines for compounding offenses at various stages of litigation. In *Damodar S. Prabhu vs. Sayed Babalal H.*, the Court proposed that no costs should be imposed if compounding is done at the initial stages. However, if compounding is sought at later stages, costs should be imposed progressively: 10% of the cheque amount if before the Magistrate, 15% if before the Sessions Court or High Court, and 20% if before the Supreme Court.4. Payment of Costs for Delayed Compounding:Since the revisionist sought to compound the offense at a late stage, the Court directed the revisionist to pay 15% of the cheque amount to the High Court Legal Services Committee, Allahabad, within four weeks. This direction aligns with the guidelines set by the Supreme Court in *Damodar S. Prabhu vs. Sayed Babalal H.*.Conclusion:Given the compromise between the parties and the receipt of the cheque amount by the opposite party, the Court deemed it appropriate to compound the offense. The judgment and sentence dated 06.09.2018, confirmed by the appellate court on 01.02.2020, were set aside, conditional upon the revisionist depositing 15% of the cheque amount as costs within the stipulated period. The criminal revision was thus allowed in these terms.
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