Post-conviction compounding under the Negotiable Instruments Act was upheld after settlement, with reduced compounding costs.

An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction when the parties have settled the dispute and the complainant does not object, because Section 147 overrides the general scheme of the Criminal Procedure Code. On that basis, the conviction and sentence were set aside. The graded compounding-cost regime may also be reduced in appropriate cases for recorded reasons, and the Court exercised that discretion having regard to the petitioner's financial condition. The compounding fee was therefore scaled down to a token amount, and the matter was closed on compounding terms.

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Issues: (i) 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. (ii) Whether the compounding fee could be reduced in the facts of the case.

Issue (i): 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.

Analysis: Section 147 of the Negotiable Instruments Act, 1881 makes offences under the Act compoundable notwithstanding the general scheme under the Code of Criminal Procedure, 1973. The compounding power can be exercised even after conviction where the parties have settled the dispute and the complainant does not object to compounding. The settlement between the parties therefore furnished a valid basis to accept compounding and to set aside the conviction and sentence.

Conclusion: The offence was validly compounded after conviction and the conviction and sentence were liable to be quashed in favour of the petitioner.

Issue (ii): Whether the compounding fee could be reduced in the facts of the case.

Analysis: The graded scheme of costs for compounding under the Negotiable Instruments Act permits reduction in appropriate cases for recorded reasons, having regard to the facts and circumstances. Considering the petitioner's financial condition, the Court exercised discretion to scale down the fee from the usual percentage-based amount.

Conclusion: The compounding fee was reduced and a token amount was directed to be deposited.

Final Conclusion: The petition succeeded on compromise, the conviction and sentence were set aside, and the matter was closed on compounding terms with a reduced cost burden.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction when the parties settle the matter, and the compounding cost may be reduced in appropriate cases for reasons recorded by the Court.

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