Compounding of cheque dishonour offence permitted on voluntary compromise and deposit of prescribed costs, leading to acquittal.

A cheque dishonour complaint under section 138 of the Negotiable Instruments Act was validly compromised, as the compromise was verified as voluntary and the complainant raised no objection to acquittal. Applying the compounding framework under section 147, the Court permitted compounding subject to deposit of 15% of the cheque amount as costs with the State Legal Services Authority. On compliance with that condition, the conviction and sentence were set aside and the accused was treated as acquitted.

---

---

Issues: Whether the offence under section 138 of the Negotiable Instruments Act could be compounded on the basis of compromise between the parties and, upon deposit of the stipulated compounding costs, the conviction and sentence required to be set aside and the applicant acquitted.

Analysis: The compromise was verified before the Registrar and was found to be voluntary, without force, coercion, undue influence, or threat. The complainant expressed no objection to acquittal. The Court acted on the basis that compounding of the offence was permissible under section 147 of the Negotiable Instruments Act and required deposit of 15% of the cheque amount as costs with the State Legal Services Authority, following the settled compounding framework applied in such matters.

Conclusion: The offence was permitted to be compounded subject to deposit of the prescribed costs, and the conviction and sentence were set aside with the applicant treated as acquitted.

Final Conclusion: The revision succeeded on compromise, resulting in substitution of the earlier conviction and sentence by acquittal on compliance with the compounding condition.

Ratio Decidendi: Where a dishonour complaint under section 138 of the Negotiable Instruments Act is validly compromised and the required compounding costs are deposited, the conviction and sentence can be set aside and the accused acquitted.

---