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Madras High Court (Madurai Bench)· 21 July 2026

Does Section 147 of the Negotiable Instruments Act override Section 359 of the BNSS for compounding a cheque dishonour offence?

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

Section 147 of the Negotiable Instruments Act, 1881 operates notwithstanding the Code of Criminal Procedure, making every offence under the Act compoundable, while Section 359 of the Bharatiya Nagarik Suraksha Sanhita, 2023 additionally empowers the High Court in revision to permit such compounding, both provisions being read together to allow compounding irrespective of the stage of proceedings.

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 7Learned counsel for the Revision Petitioner further submits that the present Revision has been filed on 06.06.2025 before this Court and on the basis of change in circumstances, as the parties have entered into Joint Memorandum of Compromise, it was prayed to this Court to compound the offence. It was further argued by the learned counsel for the Revision Petitioner that this Court has inherent powers to compound the offence, so that, ends of justice could be secured as the object of Negotiable Instruments Act is primarily compensatory and not punitive and moreover Section 147 of NI Act would have an overriding effect on Section 359 Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) Irrespective of which stage, the parties are compromising with the kind leave of this Hon'ble Court.
Paragraph 18Before answering the aforesaid question as framed, I shall examine the relevant provision of the B.N.S.S, as well as the Negotiable Instrument Act. I may extract Section 359 of B.N.S.S., and Section 147 of Negotiable Instruments Act. Section 359 B.N.S.S. - Compounding of Offences - 1. The offences punishable under the sections of the Bharatiya Nyaya Sanhita, 2023 specified in the firsttwo columns of the Table next following may be compounded by the persons mentioned in the third column of that Table: - 2)The offences punishable under the sections of the Bharatiya Nyaya Sanhita, 2023 specified in the first two columns of the Table next following may, with the permission of the Court before which any prosecution for such offence is pending, be compounded by the persons mentioned in the third column of that Table:-- 3. When an offence is compoundable under this section, the abetment of such offence or an attempt to commit such offence (when such attempt is itself an offence) or where the accused is liable under subsection(5) of section 3 or section 190 of the BharatiyaNyaya Sanhita, 2023 (45 of 2023), may be compounded in like manner. (4)(a) When the person who would otherwise be competent to compound an offence under this section is a child or of unsound mind, any person competent to contract on his behalf may, with the permission of the Court, compound such offence; (b) When the person who would otherwise be competent to compound an offence under this section is dead, the legal representative, as defined in the Code of Civil Procedure, 1908 (5 of 1908) of such person may, with the consent of the Court, compound such offence. (5) When the accused has been committed for trial or when he has been convicted and an appeal is pending,no composition for the offence shall be allowed without the leave of the Court to which he is committed, or, as the case may be, before which the appeal is to be heard. (6) A High Court or Court of Session acting in the exercise of its powers of revision under section 442 may allow any person to compound any offence which such person is competent to compound under this section (7) No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence. (8) The composition of an offence under this section shall have the effect of an acquittal of the accused with whom the offence has been compounded. (9) No offence shall be compounded except as provided by this section. Section 147 of the Negotiable Instrument Act:- Offences to be compoundable.—Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under thisAct shall be compoundable.
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?Can the High Court exercise its inherent power to permit compounding where the accused has already deposited the entire cheque amount under Section 138?
Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court (Madurai Bench). Corrections