An offence under Section 138 of the NI Act may be compounded after conviction upon settlement and payment.

The revisionist was convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to one year’s simple imprisonment and a fine of ₹1,10,000.

The appellate court dismissed his appeal and affirmed the conviction and sentence

While the criminal revision was pending, the parties filed a compounding application and supporting affidavits, stating that they had amicably settled the dispute and that the revisionist had paid the agreed full and final amount of ₹55,000 by UPI, which the complainant had received

Both parties appeared in person and confirmed the settlement and sought permission to compound the offence.

Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded after conviction when the parties had settled the dispute

Whether the conviction, sentence, and appellate order should be set aside following the parties’ settlement and compounding of the offence.

The judgment concerned an offence under Section 138 of the Negotiable Instruments Act, 1881, and proceeded on the stated principle that such an offence is compoundable even after conviction.

The Court treated the parties’ voluntary settlement and the complainant’s acknowledgment of payment as sufficient grounds to allow compounding.

The Court recorded that the complainant had received the agreed settlement amount and had no further monetary claim, and that both parties personally confirmed the settlement and requested that the offence be compounded.

In light of their agreement and the acknowledged payment, the Court allowed the compounding application; it then set aside the orders arising from the conviction and dismissed appeal.

The criminal revision was disposed of accordingly.