Compounding after conviction under the Negotiable Instruments Act was permitted following settlement, leading to quashing of conviction and sentence.

An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction where the parties have reached an amicable settlement. The Court accepted a mediation settlement under which the complainant waived the cheque claim, noted no objection to setting aside the conviction and sentence, and applied Section 147 of the Act, which permits compounding notwithstanding the Code of Criminal Procedure. On that basis, the conviction and sentence were quashed and the petitioner stood acquitted. The Court also applied Supreme Court guidelines on compounding costs and reduced the fee in view of the petitioner's financial condition.

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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 an amicable settlement and whether the conviction and sentence were liable to be quashed.

Analysis: The parties had arrived at a settlement before the Mediator, under which the complainant gave up his claim in relation to the cheque in question except for the amount already deposited in Court. The complainant also stated that he had no objection to the conviction and sentence being set aside. In view of Section 147 of the Negotiable Instruments Act, 1881, which makes offences under the Act compoundable notwithstanding the Code of Criminal Procedure, and the settled position that compounding may be permitted even after conviction, the Court found no impediment to accepting the compromise. The Court further followed the Supreme Court guidelines on compounding costs and reduced the fee having regard to the petitioner's financial condition.

Conclusion: The offence was permitted to be compounded, and the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 were quashed, resulting in acquittal of the petitioner.

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