Post-conviction compounding under the Negotiable Instruments Act may be permitted after settlement and payment of compensation.

Offences under Section 138 of the Negotiable Instruments Act were stated to remain compoundable even after conviction where the parties had settled and the complainant had received the full compensation amount. The commentary notes that Section 147 permits compounding of such offences and that this power is not controlled by the stricter scheme of Section 320 CrPC. It also explains that the compounding fee may be reduced on the facts, including the financial condition of the accused, reflecting the discretionary nature of the graded costs scheme. On that basis, the conviction and sentence were quashed, the accused was acquitted, and a reduced compounding fee was directed.

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Issues: Whether the offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction on the basis of compromise between the parties, and whether the conviction and sentence deserved to be set aside with a reduced compounding fee.

Analysis: The parties had settled the dispute and the complainant had received the entire compensation amount. Section 147 of the Negotiable Instruments Act, 1881 makes offences under that Act compoundable, and the compounding power is not controlled by the strict scheme of Section 320 of the Code of Criminal Procedure, 1973. The settled position permits compounding even after conviction. Considering the financial condition of the petitioner and the discretionary nature of the graded costs scheme, the compounding fee could be reduced in the facts of the case.

Conclusion: The offence was permitted to be compounded, the conviction and sentence were quashed and set aside, the petitioner was acquitted, and a token compounding fee of Rs. 5,000 was directed to be deposited.

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