Compounding of cheque dishonour offence remains available after conviction when compromise is reached and compensation is paid.

Section 147 of the Negotiable Instruments Act permits compounding of an offence under Section 138 at any stage, including after conviction and sentence have been affirmed. A petition under Section 482 CrPC for compounding was treated as maintainable on the basis of a later compromise, and the Court noted that withdrawal or a non-speaking dismissal of an SLP does not create a merger bar. Where the compromise was admitted and the compensation amount had been paid, the conviction and sentence were recalled, the offence was compounded, and the accused was acquitted, with consequential release of the deposited amount.

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Issues: (i) Whether a petition under Section 482 of the Code of Criminal Procedure, 1973 read with Section 147 of the Negotiable Instruments Act, 1881 was maintainable for compounding of an offence under Section 138 of the Negotiable Instruments Act, 1881 after the conviction and sentence had already been upheld. (ii) Whether, on the basis of a subsequent compromise and payment of the compensation amount, the conviction and sentence could be recalled, the offence compounded, and the accused acquitted.

Issue (i): Whether a petition under Section 482 of the Code of Criminal Procedure, 1973 read with Section 147 of the Negotiable Instruments Act, 1881 was maintainable for compounding of an offence under Section 138 of the Negotiable Instruments Act, 1881 after the conviction and sentence had already been upheld.

Analysis: Section 147 of the Negotiable Instruments Act, 1881 gives primacy to compounding of offences under Section 138 at any stage. The Court treated the subsequent compromise and the earlier case-law as supporting the view that even after conviction has been affirmed, the criminal court may entertain a request for compounding. It further accepted that dismissal of a special leave petition as withdrawn by a non-speaking order does not attract merger so as to bar the present proceeding.

Conclusion: The petition was maintainable and the Court held that there was no legal impediment to consider compounding.

Issue (ii): Whether, on the basis of a subsequent compromise and payment of the compensation amount, the conviction and sentence could be recalled, the offence compounded, and the accused acquitted.

Analysis: The compromise between the parties was admitted and the entire compensation amount had been paid to the complainant. In view of Section 147 of the Negotiable Instruments Act, 1881 and the settlement reached between the parties, the Court found it appropriate to accept the prayer for compounding. The earlier judgment of conviction and the order of sentence were therefore liable to be recalled and set aside.

Conclusion: The offence was compounded, the conviction and sentence were quashed, and the accused was acquitted.

Final Conclusion: The proceeding was finally disposed of by accepting the compromise, undoing the criminal conviction under Section 138 of the Negotiable Instruments Act, 1881, and granting consequential release of the deposited amount.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded at any stage under Section 147 of that Act, and a non-speaking dismissal or withdrawal of an SLP does not by itself create a merger bar to such compounding or recall.

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