Post-conviction compounding under the Negotiable Instruments Act was permitted on settlement, with conviction quashed and reduced compounding costs.

An offence under Section 138 of the Negotiable Instruments Act may be compounded after conviction if the parties settle the dispute and the complainant consents, because Section 147 gives compounding overriding effect even at the revisional stage. On that basis, the conviction and sentence were quashed and the accused was acquitted. The Court also noted that while graded compounding costs ordinarily apply, they may be reduced in appropriate circumstances, including financial hardship, and a reduced compounding fee was directed.

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Issues: Whether an offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of a settlement between the parties, and whether the conviction and sentence were liable to be quashed on such compounding with reduction of compounding fee.

Analysis: The parties entered into a compromise during pendency of the revision petition and the complainant gave consent for compounding. Section 147 of the Negotiable Instruments Act, 1881 gives overriding effect to compounding of offences under the Act, and the permissibility of compounding is not excluded merely because conviction has already been recorded. The Court relied on the settled principle that compounding may be permitted even at the revisional stage after conviction. While the Supreme Court's graded scheme for compounding costs ordinarily applies, the Court noted that the competent court may reduce the costs in appropriate facts and circumstances, including financial hardship.

Conclusion: The offence was permitted to be compounded, the conviction and sentence were quashed, the petitioner was acquitted of the charge under Section 138 of the Negotiable Instruments Act, 1881, and a reduced compounding fee was directed.

Ratio Decidendi: An offence under the Negotiable Instruments Act may be compounded even after conviction if the parties settle the matter, and the court may suitably reduce the compounding costs on showing special circumstances.

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