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Madras High Court· 27 July 2026

Whether the order passed by the Appellate Court confirming the conviction of the trial court under Section 138 of the Negotiable Instruments Act can be nullified by the High Court on the basis of compromise entered between the parties?

A.Chandran v. C.Murugesan
CRL RC No. 927 of 2026 · CRL RC No. 927 of 2026
Coram: Justice Shamim Ahmed
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Answer

Yes. Section 147 of the Negotiable Instruments Act makes every offence punishable under the Act compoundable notwithstanding the Code of Criminal Procedure, and Section 359 of the Bharatiya Nagarik Suraksha Sanhita, 2023 expressly permits a High Court acting in the exercise of its powers of revision to allow a person to compound such an offence. The law is no more res integra and the offence can be compounded even at any stage of the proceedings; where the complainant has voluntarily agreed for settlement, has received the entire amount agreed and has no objection, there is no impediment for the Court to permit compounding of the offence in the interest of justice.

Headnote

Negotiable Instruments Act, 1881 — s.138 — s.147 — Bharatiya Nagarik Suraksha Sanhita, 2023 — s.359 — Compounding of offence — Compromise in revision — Effect of acquittal — Negotiable Instruments Act, 1881 — s.147 — Compounding permissible at any stage — Held: Every offence punishable under the Act is compoundable notwithstanding the Code of Criminal Procedure, and the law on compounding under the N.I. Act is no more res integra; the offence may be compounded even at any stage of the proceedings. (¶12, 22) Bharatiya Nagarik Suraksha Sanhita, 2023 — s.359 — Revisional power to allow compounding — Held further: A High Court acting in the exercise of its powers of revision may allow compounding after the appellate court has confirmed the conviction and sentence, where the compromise is genuine and the complainant has received the entire amount agreed. (¶16, 22) Negotiable Instruments Act, 1881 — s.138 — Composition operates as acquittal — Held further: Composition of the offence has the effect of an acquittal, so the conviction and sentence stand annulled and the revision petitioner is treated as acquitted on account of compounding. Criminal Revision Petition allowed. (¶23)

In the Court's own words
Paragraph 15Considering the facts as narrated above, the following question arose for consideration. 'Whether the order passed by the Appellate Court confirming the conviction of the trial court under section 138 of Negotiable In- struments Act can be nullified by the High Court on the basis of compromise entered between the parties'.
Paragraph 16Before 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 Instru- ments 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 first two columns of the Table next following may be compounded by the persons men- tioned 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 be- fore which any prosecution for such offence is pending, be com- pounded 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 sub section (5) of section 3 or section 190 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023), may be compoun- ded 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 con- tained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.
Paragraph 22In view of the settlement arrived at between the parties and the joint memo/compliance memo filed before this Court, this Court is of the view that the dispute between the parties has been amicably resolved. Section 147 of the Negotiable Instruments Act provides that offences punishable under the said Act shall be compoundable. Since the respondent/complainant has voluntarily agreed for settlement and has received the entire amount agreed between the parties, there is no impediment for this Court to permit compounding of the offence in the interest of justice.
Acts & Sections
s.138 Negotiable Instruments Act, 1881s.147 Negotiable Instruments Act, 1881s.359 Bharatiya Nagarik Suraksha Sanhita, 2023s.139 Negotiable Instruments Act, 1881

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Also decided in this judgment
What is the effect of permitting compounding under the Negotiable Instruments Act on a conviction and sentence already confirmed in appeal?
Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court. Corrections