Compounding of cheque dishonour offence after conviction was accepted on settlement, leading to quashing of conviction and sentence.

Offences under the Negotiable Instruments Act may be compounded after conviction when the parties have settled the liability and the complainant has no objection. In this revision against concurrent findings under Section 138, the High Court accepted the compromise because the cheque dues had been cleared under a one-time settlement and the complainant bank had issued a no-objection certificate. Applying Section 147 and the Supreme Court's compounding principles, the Court held that post-conviction compromise could justify quashing the conviction and sentence. The offence was compounded, the conviction and sentence were set aside, and the accused was acquitted.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of compromise between the parties, and whether the conviction and sentence were liable to be quashed.

Analysis: The petition was filed in revision under Sections 397 and 401 of the Code of Criminal Procedure, 1973 against concurrent findings of guilt under Section 138 of the Negotiable Instruments Act, 1881. The complainant bank and the accused appeared before the Court and stated that the entire liability had been settled under a one-time settlement, the cheque-related dues stood cleared, and a no objection certificate had been issued. The Court relied on Section 147 of the Negotiable Instruments Act, 1881, which makes offences under the Act compoundable, and on the principles governing compounding laid down by the Supreme Court, including that compromise may be accepted even after conviction. The Court also noted that the graded compounding fee may be reduced in appropriate circumstances, having regard to the financial condition of the accused.

Conclusion: The offence was ordered to be compounded, the conviction and sentence were quashed, and the accused was acquitted of the charge under Section 138 of the Negotiable Instruments Act, 1881.

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