Post-conviction compounding under Negotiable Instruments law accepted after settlement, with conviction quashed and compounding fee reduced.

An offence under the Negotiable Instruments Act was held compoundable even after conviction where the complainant had received the full compensation amount and consented to settlement, leading the Court to accept compounding and quash the conviction and sentence. The Court also noted that compounding costs may be reduced in appropriate facts and exercised discretion to impose only a token fee in light of the petitioner's financial condition. The result was acquittal of the petitioner, with the reduced compounding fee directed to be paid within four weeks.

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Issues: (i) Whether an offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of a compromise and payment of the compensation amount, with the conviction and sentence liable to be quashed; (ii) Whether the compounding fee deserved reduction in the facts of the case.

Issue (i): Whether an offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of a compromise and payment of the compensation amount, with the conviction and sentence liable to be quashed.

Analysis: The entire compensation amount had been paid to the complainant, who expressly consented to compounding and did not wish to pursue the complaint further. The Court applied Section 147 of the Negotiable Instruments Act, 1881, which makes offences under that Act compoundable notwithstanding the Code of Criminal Procedure, and relied on the principle that compounding may be permitted even after conviction. In view of the compromise and the complainant's no-objection, there was no impediment to accepting compounding and setting aside the conviction and sentence.

Conclusion: The offence was validly compounded and the conviction and sentence were quashed, resulting in acquittal of the petitioner.

Issue (ii): Whether the compounding fee deserved reduction in the facts of the case.

Analysis: The Court considered the graded costs framework for compounding and noted that the competent court may reduce the compounding fee in appropriate facts and circumstances. Taking into account the petitioner's financial condition, the Court exercised discretion to impose only a token amount.

Conclusion: The compounding fee was reduced to Rs. 3,000/-, payable within four weeks.

Final Conclusion: The criminal petition succeeded on compromise, the petitioner was acquitted, and the matter was closed with a reduced compounding fee.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction if the complainant has settled the matter and the Court, in its discretion, accepts the compromise; the compounding fee may also be moderated on special facts.

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