Cheque dishonour proceedings may be closed after full settlement and compensation, even without complainant consent, in appropriate cases.

Cheque dishonour proceedings under Section 138 of the Negotiable Instruments Act may be closed where the complainant has been duly compensated and the dispute has been settled. The text states that, in appropriate cases, Section 258 CrPC can be used to discharge the accused and end the prosecution when the cheque amount, costs and interest have been paid and continuation of the punitive process serves no purpose. It also notes that, although compounding ordinarily requires the complainant's consent, the court may still act in the interests of justice if full and final settlement is established, and costs may be imposed according to precedent.

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Issues: Whether proceedings for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 could be closed and the impugned orders set aside on the basis of settlement and compensation, despite absence of consent by the complainant.

Analysis: The proceeding under Section 138 of the Negotiable Instruments Act, 1881 is treated as primarily compensatory and in the nature of a civil wrong. Section 258 of the Code of Criminal Procedure, 1973 can be invoked in appropriate cases to close the proceedings and discharge the accused when the cheque amount with appropriate costs and interest has been paid and there is no reason to continue with the punitive aspect. Even though compounding ordinarily requires consent of both parties, the court can in the interests of justice close the proceedings if it is satisfied that the complainant has been duly compensated. The settlement in the present matter, together with the amount offered and accepted towards full and final satisfaction, brought the case within this principle, and the compromise after disposal of the appeal justified imposition of costs in terms of the governing precedent.

Conclusion: The question was answered in favour of the petitioner. The proceedings were liable to be closed on settlement, and the impugned orders and sentence were set aside, with costs imposed as directed.

Ratio Decidendi: In a cheque dishonour prosecution, if the complainant has been duly compensated and the dispute has been settled, the court may close the proceedings and discharge the accused in the interests of justice, even without the complainant's consent to compounding, by applying Section 258 of the Code of Criminal Procedure, 1973 along with the compensatory scheme of Section 147 of the Negotiable Instruments Act, 1881.

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