Post-conviction compounding under the Negotiable Instruments Act is permissible after settlement, subject to prescribed costs.

An offence under Section 138 of the Negotiable Instruments Act may be compounded after conviction where the parties have amicably settled the dispute and the complainant consents to quashing. The Gujarat High Court noted that Section 147 makes such offences compoundable and that compounding guidelines permit it at the appellate or revisional stage on payment of prescribed costs. On those facts, the conviction was set aside and compounding was allowed, subject to deposit of the stipulated cost with the legal services authority within the directed time.

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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, with payment of costs as directed.

Analysis: The parties had settled the dispute and the complainant had no objection to quashing of the conviction. Section 147 of the Negotiable Instruments Act, 1881 makes offences under the Act compoundable, and the guidelines governing compounding permit compounding at the appellate or revisional stage on payment of prescribed costs. In the facts of the case, the Court found it appropriate to permit compounding after settlement, while directing deposit of 15% of the cheque amount with the Gujarat State Legal Services Authority within the stipulated time.

Conclusion: The conviction was set aside and compounding of the offence was permitted, in favour of the petitioner, subject to deposit of the stipulated amount.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction when the parties have amicably settled the dispute, subject to payment of the costs prescribed for compounding at the appellate or revisional stage.

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