Compromise in cheque dishonour proceedings led to quashing of conviction and consequential proceedings after settlement was accepted.

A conviction under the Negotiable Instruments Act was quashed after the parties recorded a compromise and the cheque-related liability was paid and received. The Court noted that an offence under Section 138 is compoundable and that its inherent jurisdiction may be used to terminate proceedings where the complainant does not oppose settlement and further litigation would serve no useful purpose. On that basis, the compromise was accepted, the offence was compounded, and the conviction and all consequential proceedings were set aside, resulting in acquittal.

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Issues: Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881, and the consequential proceedings could be quashed on the basis of a compromise between the parties and payment of the settled amount.

Analysis: The parties placed on record that the dispute had been compromised and that the cheque-related liability had been paid and received. In proceedings under the Negotiable Instruments Act, the offence is compoundable, and the High Court may invoke its inherent jurisdiction to bring the litigation to an end when the complainant does not object to the settlement and continuation of the proceedings would serve no useful purpose.

Conclusion: The compromise was accepted, the offence was compounded, and the conviction as well as all consequential proceedings were quashed; the petitioner was acquitted.

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