Compounding of cheque dishonour offences after conviction is permissible on settlement, with costs reducible on case-specific facts.

Dishonour of cheques under the Negotiable Instruments Act may be compounded even after conviction when the parties settle the dispute, because Section 147 treats such offences as compoundable notwithstanding the general criminal procedure rule. Applying that principle, the Court accepted the compromise between the drawer and the complainant, noted the complainant's no-objection to compounding, and treated the conviction and sentence as liable to be set aside upon compounding. The Court also applied the graded cost framework for delayed compounding and reduced the compounding fee in light of the petitioner's financial condition.

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Issues: Whether the offence under the Negotiable Instruments Act could be compounded after conviction on the basis of a compromise between the parties, and whether the conviction and sentence could be set aside on such compounding.

Analysis: The dispute related to dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881. During the pendency of the petition, the petitioner and the complainant settled the matter, and the complainant expressed no objection to compounding. The Court relied on Section 147 of the Negotiable Instruments Act, 1881, which makes offences under the Act compoundable notwithstanding the general rule under the criminal procedure law, and on the principle that compounding may be permitted even after conviction. The Court also applied the graded cost framework for delayed compounding and reduced the compounding fee having regard to the financial condition of the petitioner.

Conclusion: The offence was permitted to be compounded, and the conviction and sentence were quashed with the petitioner acquitted of the charge.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction when the parties have settled the dispute, and the Court may exercise discretion to reduce the compounding costs on the facts of the case.

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