Post-conviction compounding in cheque dishonour cases accepted after settlement, with quashing allowed and prescribed costs directed.

Post-conviction compounding of a cheque dishonour offence under Section 138 of the Negotiable Instruments Act was treated as permissible where the parties settled the dispute and the complainant consented to quashing. Invoking inherent powers under Section 482 of the Criminal Procedure Code, the court applied the Supreme Court's guideline in Damodar S. Prabhu and accepted compounding in the interests of justice. The conviction and consequential proceedings were quashed, and the accused was directed to deposit the prescribed costs with the Gujarat State Legal Services Authority.

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Issues: Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 could be quashed and the offence compounded after conviction on the basis of an amicable settlement between the parties, and whether costs were payable in terms of the governing guidelines.

Analysis: The application invoked the inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 after the parties settled the cheque dishonour dispute and the complainant expressed no objection to quashing. The governing principle applied was that offences under the Negotiable Instruments Act are compoundable, and post-conviction compounding is permissible subject to the costs structure indicated by the Supreme Court in Damodar S. Prabhu. The Court accepted the settlement, treated compounding as appropriate in the interests of justice, and directed deposit of 15% of the cheque amount with the Gujarat State Legal Services Authority.

Conclusion: The conviction and consequential proceedings were quashed and set aside, and the application was allowed with a direction to deposit the prescribed costs.

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