Compounding of cheque dishonour offence after affirmed conviction is permissible where parties fully settle the dispute.

An offence under Section 138 of the Negotiable Instruments Act may be compounded at any stage under Section 147, including after conviction has been upheld in appeal or revision, where the parties have genuinely settled the dispute and the complainant raises no objection. The High Court may invoke its inherent power under Section 482 of the Code of Criminal Procedure to give effect to such compromise and undo the recorded conviction and sentence. On that basis, the application was held maintainable, the offence was compounded, and the conviction and sentence were quashed, resulting in acquittal.

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Issues: Whether an application under Section 482 of the Code of Criminal Procedure, read with Section 147 of the Negotiable Instruments Act, was maintainable for compounding an offence under Section 138 of the Negotiable Instruments Act after conviction had been upheld and whether the conviction and sentence could be set aside on the basis of compromise and full settlement.

Analysis: Section 147 of the Negotiable Instruments Act enables compounding of the offence under Section 138 at any stage. The Court relied on the settled principle that a compromise between the parties, once the amount in dispute has been paid and the complainant has no objection, can be accepted even after conviction, including after appellate or revisional affirmance. The Court held that the power under Section 482 of the Code of Criminal Procedure can be exercised to give effect to such settlement and to undo the conviction and sentence already recorded.

Conclusion: The application was maintainable and the offence was permitted to be compounded. The conviction and sentence were quashed, and the petitioner was acquitted.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act may be compounded at any stage under Section 147, and the High Court may exercise inherent powers to set aside an affirmed conviction once the parties have genuinely settled the matter.

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