Post-conviction compounding under the Negotiable Instruments Act can extinguish conviction and sentence after an amicable settlement.

An offence under Section 138 of the Negotiable Instruments Act may be compounded after conviction if the parties have amicably settled the dispute and the complainant raises no objection. Once compounding is permitted, the conviction and sentence cannot survive, because the foundation for punishment ceases to exist. The text also notes that where payment has been made and a compounding fee has been deposited, the court may retain part of that deposit as the fee and direct refund of the balance to the accused.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded after conviction on the basis of a settlement between the parties, and whether the conviction and sentence deserved to be quashed.

Analysis: The dispute had been amicably settled and the complainant raised no objection to compounding. The amount due had already been paid. In these circumstances, the Court exercised its power under the compounding provision and also took note of the deposit already made toward compounding fee, directing retention of a part of that amount as fee and refund of the balance to the accused. Once compounding was permitted, the foundation for the conviction and sentence ceased to survive.

Conclusion: The offence was compounded and the conviction and sentence were quashed and set aside.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act may be compounded after conviction when the parties have settled the dispute amicably, and upon such compounding the conviction and sentence cannot stand.

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