Compounding of cheque dishonour offences after conviction is permissible when parties settle, with Section 147 overriding CrPC compounding rules.

Section 138 of the Negotiable Instruments Act may be compounded even after conviction where the parties have genuinely settled the dispute, and Section 147 operates with overriding effect over the general compounding framework under the Code of Criminal Procedure. In the described matter, the complaint was compromised during the pendency of the petition, the complainant-bank raised no objection, and the High Court permitted compounding. The conviction and sentence were quashed, resulting in acquittal of the petitioner.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded after conviction on the basis of a compromise between the parties and whether the conviction and sentence were liable to be quashed.

Analysis: The matter had been compromised during the pendency of the petition and the complainant-bank expressed no objection to compounding. Section 147 of the Negotiable Instruments Act makes every offence under the Act compoundable and, by virtue of its non obstante clause, operates notwithstanding the scheme of compounding under Section 320 of the Code of Criminal Procedure. The Court also relied on the settled position that compounding may be permitted even after conviction when the parties have settled the dispute.

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

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act is compoundable at any stage, including after conviction, where the parties have genuinely settled the dispute, and Section 147 of the Act prevails over the general compounding framework under the Code of Criminal Procedure.

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