Compounding fee condition in cheque dishonour settlement deleted after full payment and complainant consented to compounding.

In a cheque dishonour dispute under Section 138 of the Negotiable Instruments Act, the parties settled the matter before the Lok Adalat and the complainant confirmed receipt of the full cheque amount with no objection to compounding without a fee. On those facts, the HC held that the appellate condition requiring deposit of 20% of the cheque amount was unnecessary and could be modified. The court deleted the compounding fee condition and relieved the petitioner from depositing the amount directed by the court below.

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Issues: Whether the condition directing payment of 20% of the cheque amount as compounding fee could be deleted after the parties settled the dispute and the complainant had received the entire cheque amount.

Analysis: The dispute arose from a complaint under Section 138 of the Negotiable Instruments Act and, during the appeal, the parties resolved the matter before the Lok Adalat. The complainant stated that the full cheque amount had been received and that he had no objection to compounding without payment of compounding fee. In these circumstances, the Court held that the condition imposed by the appellate court requiring deposit of 20% of the cheque amount was not necessary and could be modified.

Conclusion: The condition of payment of compounding fee was deleted, and the petitioner was held not liable to deposit the amount directed by the court below.

Ratio Decidendi: Where a cheque dishonour dispute under Section 138 is amicably settled and the complainant consents to compounding, the court may modify the compounding order and dispense with the fee condition.

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