Post-conviction compounding in cheque dishonour cases remains possible when parties settle and the complainant accepts payment.
Dismissal of a special leave petition as withdrawn or by a non-speaking order does not create merger with the High Court judgment, so the High Court may still entertain recall or modification proceedings. In cheque dishonour matters, Section 147 of the Negotiable Instruments Act permits compounding even after conviction and sentence have been upheld, where the parties settle and the complainant accepts payment of the agreed amount. On that basis, the offence under Section 138 was compounded, the conviction and sentence were set aside, and the accused obtained acquittal.
Issues: (i) whether the Court could entertain the petition for recall/modification after dismissal of the special leave petition as withdrawn, and (ii) whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction and sentence had been upheld.
Issue (i): whether the Court could entertain the petition for recall/modification after dismissal of the special leave petition as withdrawn
Analysis: The petition was maintainable because dismissal of a special leave petition as withdrawn, or in limine by a non-speaking order, does not amount to merger of the High Court judgment with the order of the Supreme Court. Such dismissal does not bar the High Court from exercising its available jurisdiction, and the earlier judgment was not rendered unalterable merely because the Supreme Court proceedings had been withdrawn.
Conclusion: The petition was maintainable and the Court could consider recall/modification.
Issue (ii): whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction and sentence had been upheld
Analysis: Section 147 of the Negotiable Instruments Act, 1881 gives overriding effect to compounding of offences under Section 138, and the compromise between the parties, coupled with payment of the settled amount, justified compounding even after conviction. The Court followed the principle that compounding may be permitted at a later stage when the complainant has received the amount due and has no objection to closure of the matter.
Conclusion: The offence was permitted to be compounded and the conviction and sentence were set aside, resulting in acquittal.
Final Conclusion: The settlement between the parties was accepted, the criminal liability under the cheque dishonour proceedings was extinguished by compounding, and the petitioner obtained complete relief from the conviction and sentence.
Ratio Decidendi: A cheque dishonour offence may be compounded at a post-conviction stage under Section 147 of the Negotiable Instruments Act, 1881, and dismissal of a special leave petition as withdrawn does not, by itself, create a merger that disables the High Court from granting such relief.
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