Post-conviction compounding under the Negotiable Instruments Act may still end prosecution after genuine settlement, subject to costs.

An offence under Section 138 of the Negotiable Instruments Act, 1881 is stated to be compoundable even at the revisional stage, including after conviction, where the parties have entered a genuine settlement and the complainant has received the agreed amount. The document notes that such compromise may justify setting aside the conviction and sentence, while the court may still impose compounding costs. It also records that, in mitigating circumstances, costs may be reduced rather than waived entirely, with the prosecution brought to an end upon deposit of the reduced amount.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded in revision on the basis of a post-conviction settlement and, if so, whether the conviction and sentence were liable to be set aside on payment of costs.

Analysis: The parties had settled the dispute through mediation, and the complainant had received the agreed amount. The offence under Section 138 of the Negotiable Instruments Act, 1881 is compoundable, and compounding is permissible even at a later stage of proceedings. In view of the compromise, the Court declined to refuse compounding merely because the matter had reached the revisional stage. At the same time, while considering the mitigating circumstances, the Court found no basis to waive costs entirely and reduced the compounding cost to Rs. 10,000/-.

Conclusion: The offence was permitted to be compounded, and the conviction and sentence were set aside on payment of reduced costs.

Final Conclusion: The compromise between the parties brought the prosecution to an end, and the petitioner obtained relief from the conviction subject to deposit of costs.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded at a later stage, including in revision, and once a genuine settlement is arrived at, the conviction and sentence can be set aside, though the Court may impose or reduce costs for compounding.

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