Court permits compounding under Section 138, emphasizes settlement, and releases petitioner.

The court allowed the compounding of the offence under Section 138 of the Negotiable Instruments Act, setting aside the judgments of both lower courts. The petitioner was ordered to be released if confined in jail and not required in any other case. The judgment emphasized the importance of parties reaching a settlement and the court's power to invoke Section 147 for compounding even at the appellate stage, in line with legislative intent and judicial precedents.

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Issues:
Compounding under the Negotiable Instruments Act at the stage of appeal and revision.

Analysis:
The revision petition was filed against the judgment and order convicting the petitioner under Section 138 of the Negotiable Instruments Act. The petitioner had deposited amounts with the respondent, and the matter was referred to the Mediation Centre. The respondent acknowledged the remittance of the entire amount and had no objection to compounding the offence under Section 147 of the Act. The court discussed the compounding provision under the Act and cited various precedents, emphasizing that the power under Section 147 can be invoked at any stage of the proceedings. The court referred to the case of K.M. Ibrahim Vs. K.P Mohammed & Another, highlighting the legislative intent behind the amendment to facilitate settlements. The court noted that once a case is compounded under Section 147, the conviction under Section 138 should be set aside.

The court further discussed the applicability of Section 320 Cr.P.C. and Article 142 of the Constitution in allowing the compounding of offences under the Negotiable Instruments Act. The judgment referred to various decisions supporting the view that once a case is compounded under Section 147, the conviction under Section 138 should be annulled. The court emphasized the compensatory nature of cheque dishonour cases and the importance of prioritizing a compensatory mechanism over punitive measures. Citing cases like Cochin Hotels Co.(P) Ltd Vs. Kairali Granites and Damodar S. Prabhu Vs. Sayed Babalal H., the court highlighted the significance of compromise in strengthening relationships between parties.

Ultimately, the court allowed the compounding of the offence under Section 138 of the Negotiable Instruments Act, setting aside the judgments of both lower courts. The petitioner was ordered to be released if confined in jail and not required in any other case. The judgment underscored the importance of parties reaching a settlement and the court's power to invoke Section 147 for compounding even at the appellate stage, in line with the legislative intent and judicial precedents.

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