Compounding of cheque dishonour offence can be applied at the revisional stage after full settlement between parties.

A conviction under Section 138 of the Negotiable Instruments Act can be annulled where the parties settle after appellate confirmation, because Section 147 makes offences under the Act compoundable notwithstanding the Code of Criminal Procedure. The court accepted the compromise, noted that the complainant had received the cheque amount in full, and treated the compounding power as available even at the revisional stage. Given the compensatory object of the provision and the need to secure the ends of justice, the earlier conviction and sentence were set aside and the accused was treated as acquitted.

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Issues: Whether the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 could be set aside on the basis of a compromise entered into between the parties after confirmation by the appellate court.

Analysis: The compromise was taken on record and it was found that the complainant had received the cheque amount in full. Section 147 of the Negotiable Instruments Act, 1881 makes every offence under the Act compoundable notwithstanding the Code of Criminal Procedure, 1973, and the Court held that the compounding power can be exercised even at the revisional stage. It was further held that the compensatory object of the provision and the need to secure the ends of justice justified giving effect to the settlement notwithstanding the earlier conviction and appellate confirmation.

Conclusion: The conviction and sentence were liable to be annulled on the basis of compounding, and the petitioner was entitled to be treated as acquitted.

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