Compounding of cheque dishonour offences can be allowed at revision stage, with conviction and proclamation orders set aside.

Compounding of a cheque dishonour offence under the Negotiable Instruments Act was held permissible at the revisional stage after conviction, where the compromise between the parties was genuine, voluntary and the liability had been satisfied. Section 147 was treated as giving overriding effect to compounding, and the power to compound was not confined to the trial stage. Once the offence was compounded, the conviction and sentence could not survive, and the connected order declaring the accused a proclaimed person was also set aside.

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Issues: (i) Whether the offence under the Negotiable Instruments Act could be compounded at the revisional stage after dismissal of the appeal and conviction of the accused; (ii) whether, on such compounding, the conviction, sentence and order declaring the accused as proclaimed person were liable to be set aside.

Issue (i): Whether the offence under the Negotiable Instruments Act could be compounded at the revisional stage after dismissal of the appeal and conviction of the accused.

Analysis: The compromise between the parties was found to be genuine and voluntary. The statutory scheme under Section 147 of the Negotiable Instruments Act gives overriding effect to compounding of cheque dishonour offences, and the power to compound is not confined to the trial stage. The settled legal position applied was that compounding may be permitted even after conviction and at the appellate or revisional stage, particularly where the dispute has been amicably resolved and the cheque liability has been satisfied.

Conclusion: The offence was permitted to be compounded and the application for compounding was allowed.

Issue (ii): Whether, on such compounding, the conviction, sentence and order declaring the accused as proclaimed person were liable to be set aside.

Analysis: Once compounding was accepted in a cheque dishonour matter, the conviction and sentence could not stand. The order declaring the accused a proclaimed person, passed in connection with the same proceedings and in the context of the compromise, also ceased to survive. The proceeding under the criminal complaint and the connected declaration were therefore required to be neutralised in consequence of the settlement.

Conclusion: The conviction, sentence and order declaring the petitioner as proclaimed person were set aside.

Final Conclusion: The dispute was resolved on compromise, resulting in acceptance of compounding and complete relief to the petitioner against the conviction and connected proclamation order.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded at the revisional stage under Section 147 of that Act, and once compounded, the conviction and sentence cannot survive.

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