Unilateral willingness to pay cannot compel compounding of a Section 138 offence without complainant consent.

Respondent No. 2 filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (“N.I. Act”) concerning cheque No. 380118 dated 20.03.2020 for ₹4,00,000, which was dishonoured with the remarks “KYC awaited and funds insufficient.” Despite service of the statutory notice dated 20.04.2020, payment was not made, resulting in the complaint

The Judicial Magistrate First Class, Jalandhar, convicted petitioner No. 2 under Section 138 of the N.I. Act by judgment dated 30.10.2025 and sentenced him to one year’s rigorous imprisonment, besides compensation of ₹4,00,000 with 9% annual interest

During the pendency of the petitioners’ criminal appeal, they applied for compounding under Section 147 of the N.I. Act, offering to pay the cheque amount along with 7.5% costs in terms of Sanjabij Tari v. Kishore S. Borcar

Respondent No. 2 expressly refused to compound, citing the petitioners’ alleged delaying tactics, harassment, and failure to honour earlier settlement arrangements

The appellate Court dismissed the compounding application on 16.05.2026, holding that consent of the complainant was essential

The petitioners challenged that order under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023

Section 147 of the N.I. Act permits compounding of offences under the Act, but compounding remains fundamentally consensual and cannot ordinarily be imposed without the complainant’s consent.

Relying on A.S. Pharma Pvt. Ltd. v. Nayati Medical Pvt. Ltd., 2024 SCC OnLine SC 2539, and JIK Industries Ltd. v. Amarlal V. Jumani, (2012) 3 SCC 255, the Court held that the complainant’s consent is a sine qua non for compounding and that willingness to pay, even with additional compensation, cannot substitute such consent

K.M. Ibrahim v. K.P. Mohammed, (2010) 1 SCC 798, and the decisions of the High Court in M/s Nidhi Knitwears (P) Ltd. v. Honey Hosiery Mills, 2022 (3) RCR (Criminal) 304, and Surinder Kumar Bindal v. Satinder Nath Radhey Shyam and Sons reaffirm the same principle

Paragraph 38(c) of Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, prescribes 7.5% costs where payment is made before the Sessions Court or High Court in appeal or revision, but paragraph 39 merely permits the Court to “suggest” compounding and does not authorise compulsion of an unwilling complainant

Section 528 of the BNSS, corresponding to Section 482 of the Cr.P.C., cannot be used to override an express statutory requirement or to equate quashing with compounding

The Court held that respondent No. 2’s refusal to compound was clear and unequivocal

Although the petitioners offered the full cheque amount together with 7.5% costs, that offer could facilitate a consensual settlement but could not create a unilateral right to compounding.

The costs framework in Sanjabij Tari regulates the financial consequences of compounding at different procedural stages; it does not dispense with the complainant’s consent

Since compounding is based on mutual agreement, the appellate Court correctly declined to compel respondent No. 2 to settle.

The inherent jurisdiction under Section 528 of the BNSS could not be invoked to bypass the consent requirement under Section 147 of the N.I. Act, particularly because quashing and compounding operate in distinct legal fields

Finding no illegality, infirmity, or perversity in the appellate Court’s order dated 16.05.2026, the Court dismissed the petition

It clarified that the dismissal would not prejudice the petitioners’ rights in the pending statutory appeal, which was to be decided independently on its merits and in accordance with law.