A Section 138 offence may be compounded at the revisional stage upon voluntary settlement.

The petitioner challenged the appellate judgment confirming its conviction under Section 138 of the Negotiable Instruments Act, 1881, and the fine of ₹12,80,000 imposed by the trial court.

During the revision, the parties filed a joint memo recording a voluntary settlement for ₹12,00,000, payable in instalments; the memo provided that the amount previously deposited would form part of the first instalment and that the respondent could pursue enforcement of the conviction in the event of default.

The respondent reported receipt of a demand draft for ₹1,24,630 towards the first instalment, and the parties confirmed the schedule for the remaining instalments.

Whether the parties’ settlement and request to compound the Section 138 offence could be accepted at the revisional stage

Whether the revision petition should be disposed of in light of the settlement and the payment arrangements

Section 147 of the Negotiable Instruments Act, 1881, permits compounding of offences under that Act.

The joint memo also referred to Sections 397 and 401 of the Code of Criminal Procedure, 1973, and the corresponding BNSS provisions, as the basis for the revision and the request to compound.

After examining the joint memo and making an enquiry, the Court found the settlement voluntary and lawful.

It recorded the respondent’s receipt of the first-installment balance of ₹1,24,630 and noted the parties’ agreement that the remaining instalments would be paid on the dates in the memo.

The order does not set out a separate analysis of the proposed default-enforcement clause or expressly state that the conviction is set aside or the petitioner acquitted.

The operative order states that the petition “stands disposed of”; it does not expressly order acquittal or specify the consequences of any future default.