Post-conviction compounding under the Negotiable Instruments Act allowed; conviction quashed and compounding fee reduced on settlement.

Offences under Section 138 of the Negotiable Instruments Act can be compounded after conviction when the parties have settled the dispute and the complainant raises no objection; in such circumstances, the conviction and sentence may be quashed and the accused acquitted. Section 147 gives compounding effect notwithstanding the Code of Criminal Procedure, and the compounding framework under Section 320 CrPC does not control it in the same manner. The Court also noted that the compounding fee may be reduced on the facts and circumstances of the case, and reduced the fee accordingly.

---

---

Issues: Whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of a compromise between the parties and whether the compounding fee could be reduced in the facts of the case.

Analysis: The parties had settled the dispute and the complainant had received the amount and expressed no objection to compounding. Section 147 of the Negotiable Instruments Act, 1881 makes offences under the Act compoundable notwithstanding anything contained in the Code of Criminal Procedure, 1973, and the compounding scheme under Section 320 of the Code of Criminal Procedure, 1973 does not control such compounding in the same manner. The Court applied the principles governing post-conviction compounding and the graded cost scheme for compounding, while also noting that the compounding fee may be reduced on the facts and circumstances of a case.

Conclusion: The offence was permitted to be compounded, the conviction and sentence were quashed, the accused was acquitted under Section 138 of the Negotiable Instruments Act, 1881, and the compounding fee was reduced to Rs. 2,500/-.

---