Post-conviction compounding under the Negotiable Instruments Act was allowed after settlement, with compounding costs reduced.

Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction where the parties later settle and the complainant consents, with the conviction and sentence then liable to be set aside. Section 147 overrides the general compounding scheme under the Code of Criminal Procedure for offences under the Act. The court also held that compounding costs may be reduced in appropriate circumstances, and exercised discretion to treat the fee as token where the matter was settled at a later stage and the accused's financial condition justified relief.

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Issues: (i) Whether an offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction and modification of sentence on the basis of a subsequent compromise between the parties. (ii) Whether the compounding fee could be reduced having regard to the circumstances of the case.

Issue (i): Whether an offence under Section 138 of the Negotiable Instruments Act, 1881 could be compounded after conviction and modification of sentence on the basis of a subsequent compromise between the parties.

Analysis: Section 147 of the Negotiable Instruments Act, 1881 makes offences under that Act compoundable notwithstanding the general scheme of Section 320 of the Code of Criminal Procedure, 1973. The compromise placed on record showed that the complainant had received the agreed amount and raised no objection to compounding. In the light of the statutory enabling provision and the settled principle that compounding can be accepted even after conviction, there was no legal impediment to allowing the matter to be compounded and setting aside the conviction and sentence.

Conclusion: The offence was held compoundable after conviction, and the petitioner was entitled to acquittal on the basis of compromise.

Issue (ii): Whether the compounding fee could be reduced having regard to the circumstances of the case.

Analysis: The graded scheme for compounding costs is intended to encourage early settlement, but the competent court may reduce the amount in appropriate circumstances. Taking note of the petitioner's financial condition and the fact that the matter was being compounded at the High Court stage, the court exercised discretion to reduce the fee to a token amount.

Conclusion: The compounding fee was reduced and the petitioner was directed to deposit Rs. 5,000.

Final Conclusion: The compromise between the parties was accepted, the conviction and sentence were quashed, the petitioner was acquitted of the Section 138 charge, and the petition was disposed of with a reduced compounding fee.

Ratio Decidendi: An offence under Section 138 of the Negotiable Instruments Act, 1881 may be compounded even after conviction if the parties settle the dispute, and the court may reduce compounding costs in the exercise of discretion on appropriate facts.

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