Compromise in cheque dishonour cases can justify quashing when the complainant has been fully compensated.

Cheque dishonour prosecutions under Section 138 of the Negotiable Instruments Act may be brought to an end where the parties enter a full compromise and the complainant has received the entire liability. Because such proceedings are treated as predominantly compensatory, the court may invoke its inherent power under Section 482 of the Code of Criminal Procedure, read with Section 147 of the Negotiable Instruments Act, to encourage compounding when the complainant has been duly compensated. On that basis, continuation of the prosecution serves no useful purpose. The proceedings were quashed and the accused was acquitted.

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Issues: Whether criminal proceedings for cheque dishonour could be quashed on the basis of a full compromise between the parties by invoking the inherent jurisdiction of the High Court read with the power to compound under the Negotiable Instruments Act.

Analysis: The liability under the cheque transaction had been fully satisfied and the complainant had acknowledged receipt of the entire amount and sought closure of the case. The legal position governing offences under Section 138 of the Negotiable Instruments Act treats such prosecution as predominantly compensatory in character, and compounding is to be encouraged when the complainant has been duly compensated. In such circumstances, continuation of the prosecution would serve no useful purpose. The inherent power under Section 482 of the Code of Criminal Procedure, reinforced by Section 147 of the Negotiable Instruments Act, could therefore be exercised to bring the proceedings to an end.

Conclusion: The proceedings were validly quashed on the basis of compromise, and the petitioner was acquitted of the offence under Section 138 of the Negotiable Instruments Act.

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