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?

The Court held that the order passed by the Appellate Court confirming the conviction under Section 138 of the Negotiable Instruments Act can be nullified by the High Court on the basis of a compromise entered between the parties, since the offence is compoundable under Section 147 of the Act and the object of the provision is compensatory, not punitive.

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)

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