Genuine compromise can end cheque dishonour prosecution in revision where compounding is legally permissible and justice so requires

A genuine, voluntary and unpressured compromise in a cheque dishonour matter may be given effect in revisional proceedings where compounding is legally permissible. The offence under the Negotiable Instruments Act was treated as compoundable, and the court considered the compensatory character of Section 138 proceedings and the complainant's clear unwillingness to continue the dispute. On that basis, the conviction and sentence could be set aside in the interests of justice, subject to compliance with the stipulated deposit condition.

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Issues: Whether the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 deserved to be set aside on the basis of a genuine compromise between the parties.

Analysis: The compromise was found to be voluntary, bona fide, and free from pressure or undue influence, and the complainant clearly stated that he did not wish to pursue further legal action. The offence under Section 138 is compoundable under Section 147 of the Negotiable Instruments Act, 1881, and the Court exercised revisional jurisdiction to give effect to the settlement in the interest of justice. The compensatory nature of cheque dishonour proceedings was also taken into account, along with the condition of deposit of 15% of the cheque amount in line with the settled principle governing compounding at the revisional stage.

Conclusion: The conviction and sentence were set aside and the revision petition was allowed on the basis of the compromise, subject to deposit of 15% of the cheque amount within the stipulated time.

Ratio Decidendi: A genuine and voluntary compromise in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881 can be given effect to in revisional proceedings, and the conviction and sentence may be set aside when compounding is otherwise legally permissible and consistent with the interests of justice.

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