Courts may permit post-conviction compounding of Section 138 offences under Section 147.

The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881, by the SDJM, Padampur, and sentenced to one year’s simple imprisonment and payment of ₹1,30,000 as compensation.

The Sessions Judge, Padampur, affirmed the conviction and sentence in appeal.

In the revision, the petitioner and the complainant filed a joint affidavit stating that they had compromised the matter and that the petitioner had paid ₹1,30,000 in full and final settlement; the complainant’s counsel confirmed receipt.

Whether the offence under Section 138 of the Negotiable Instruments Act could be compounded on the basis of the parties’ joint affidavit and settlement

Whether the conviction and sentence affirmed by the appellate court should be set aside following compounding of the offence

Section 147 of the Negotiable Instruments Act provides that every offence punishable under that Act is compoundable.

The Court also relied on M.P. State Legal Services Authority v. Prateek Jain, (2014) 10 SCC 690, in considering whether to permit compounding in light of the parties’ settlement.

The Court noted that the parties had jointly affirmed their compromise and that the complainant had received the full settlement amount of ₹1,30,000.

In view of Section 147 and the parties’ settlement, the Court considered it appropriate to permit compounding, notwithstanding that no separate compromise petition had been filed.

It consequently set aside the conviction and sentence recorded by the trial court and affirmed on appeal.

The petitioner was not required to be taken into custody pursuant to those judgments and was ordered to be set at liberty.