Delayed compounding in cheque dishonour cases permitted at revision stage on payment of graded costs and acquittal follows

Compounding of a cheque dishonour offence under Section 138 of the Negotiable Instruments Act was permitted at the revision stage after the parties settled the dispute and the complainant raised no objection. The court applied the graded cost structure for delayed compounding in later-stage Section 138 matters and required deposit of 3% of the cheque amount with the State Legal Services Authority. On such payment within seven days, the petitioner was to be acquitted and released if in custody; if deposit was not made, the original sentence and compensation would revive.

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Issues: Whether the conviction for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 could be set aside on compromise at the revision stage on payment of costs, and whether the petitioner was entitled to acquittal subject to deposit of such costs.

Analysis: The parties placed the dispute on compromise and the complainant expressed no objection to acquittal. The order applied the graded cost structure recognised for delayed compounding in cheque dishonour matters, particularly where compounding is sought at the revision stage. It was held that, in such circumstances, compounding could be permitted on payment of costs calculated as 3% of the cheque amount to the State Legal Services Authority, consistent with the governing approach for later-stage settlement of Section 138 matters.

Conclusion: The petitioner was permitted to compound the offence on deposit of 3% of the cheque amount within seven days, and upon such payment was to be acquitted and released, if in custody; failing deposit, the original sentence and compensation would revive.

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