Madras High Court (Madurai Bench)· 21 July 2026

Can the High Court exercise its inherent power to permit compounding where the accused has already deposited the entire cheque amount under Section 138?

Y.Sanjay v. K.Karunanidhi

CRL RC No. 835 of 2025 · CRL RC No. 835 of 2025
Coram: Shamim Ahmed

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Answer

The High Court held that where the accused had deposited the entire cheque amount and the complainant acknowledged no further claim, this constituted a special circumstance justifying exercise of the inherent power to secure substantial justice and give effect to the compromise, even after dismissal of the appeal confirming conviction.

Headnote

Negotiable Instruments Act, 1881 — s.147 — Bharatiya Nagarik Suraksha Sanhita, 2023 — s.359 — Compounding of offence under s.138 NI Act — Post-conviction compromise — High Court's inherent power in revision — Negotiable Instruments Act, 1881 — s.147 — Compounding after conviction upheld in appeal — Held: Section 147 of the Negotiable Instruments Act, 1881 makes every offence punishable under the Act compoundable notwithstanding the Code of Criminal Procedure, and this compoundability survives even after the conviction has been confirmed by the Appellate Court, since the object of the provision is compensatory and not punitive. (¶18, 19) Bharatiya Nagarik Suraksha Sanhita, 2023 — s.359 — Revisional power to permit compounding — Held further: Section 359(6) of the Bharatiya Nagarik Suraksha Sanhita, 2023 empowers a High Court exercising revisional jurisdiction to permit compounding of any offence, and this power to secure the ends of justice is neither limited nor curtailed by any other provision, though it must be exercised sparingly and with caution. (¶19) Negotiable Instruments Act, 1881 — s.138 — Full and final settlement — Acquittal on compounding — Held further: Where the parties enter a Joint Memorandum of Compromise of full and final settlement after the accused deposits the entire cheque amount, and no amount remains due, the conviction and sentence recorded by the courts below stand annulled and the Revision Petitioner is treated as acquitted on account of compounding of the offence. Criminal Revision Case disposed of accordingly. (¶23, 24)

In the Court's own words

Paragraph 19It is well settled that inherent power of the Court can be exercised only when no other remedy is available to the litigants and nor a specific remedy as provided by the statute. It is also well settled that if an effective, alternative remedy is available, the High Court will not exercise its inherent power, especially when the Revision Petitioner may not have availed of that remedy. The power can be exercised by the High Court to secure the ends of justice, prevent abuse of the process of any court and to make such orders as may be necessary to give effect to any order under this Sanhita or Act, depending upon the facts of the given case. This Court can always take note of any miscarriage of justice and prevent the same by exercising its power. These powers are neither limited, nor curtailed by any other provision of the Sanhita or Act. However, such inherent powers are to be exercised sparingly and with caution.

Paragraph 22In the instant case, the Revision Petitioner is invoking the inherent power of this court after dismissal of the appeal confirming his conviction and sentence. In these circumstances, I have to examine as to whether for entertaining the aforesaid case, any special circumstances are made out or not, so it can be legitimately argued and inferred and held that in all cases where the Revision Petitioner is able to satisfy this Court that there are special circumstances which can be clearly spelt out subsequent proceeding invoking inherent power of this court can be modified and cannot be thrown away on that technical argument as to its sustainability once the contesting parties entered into subsequent compromise.

Acts & Sections

s.138 Negotiable Instruments Act, 1881s.147 Negotiable Instruments Act, 1881s.139 Negotiable Instruments Act, 1881s.143 Negotiable Instruments Act, 1881s.359 Bharatiya Nagarik Suraksha Sanhita, 2023s.258 Code of Criminal Procedure, 1973s.264 Code of Criminal Procedure, 1973s.357(3) Code of Criminal Procedure, 1973s.431 Code of Criminal Procedure, 1973s.64 Indian Penal Code, 1860s.482 Code of Criminal Procedure, 1973

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Also decided in this judgment

Under the Negotiable Instruments Act, 1881, can a Section 138 conviction confirmed by the Appellate Court be nullified by the High Court on the basis of a compromise between the parties?Does Section 147 of the Negotiable Instruments Act override Section 359 of the BNSS for compounding a cheque dishonour offence?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court (Madurai Bench). Corrections