The central legal point established is the permissibility of compounding the offence under Section 138 of the NI Act, considering the settlement between the parties and the provisions of Section 147 of the Act.

Ashutosh Kumar, J.

1. The petitioner has invoked the revisional jurisdiction of this Court for challenging the judgment and order of conviction dated 23.03.2015/26.03.2015 passed by the learned Metropolitan Magistrate whereby the petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘NI Act’) and has been sentenced to undergo SI for a period of six months and pay a compensation of the amount of Rs. 2.25 lacs to the respondents. In default of payment of compensation, the petitioner has been directed to undergo further imprisonment for three months.

2. The petitioner is also aggrieved by the judgment and order passed by the Appellate Court namely ASJ, Rohini Courts, Delhi, whereby the appeal preferred by the petitioner was dismissed and the conviction and sentence awarded by the Trial Court was upheld and affirmed.

3. Without taking this Court to the merits of the case, at the outset, it has been stated by the petitioner that he is ready to compound the case with the complainant. In fact, the petitioner has come prepared with a draft of Rs. 1.25 lacs to be given to the respondent.

4. It has been submitted that as part of the compensation amount namely Rs. 2.25 lacs which was awarded, Rs. 1 lac has already been deposited before the Trial Court. The petitioner has also paid to the complainant (respondent) an amount of Rs. 50,000/- as litigation expenses.

5. Learned counsel for the respondents does not have any objection to such a prayer.

6. Section 147 of the NI Act reads as under:

“147. Offences to be compoundable. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.”

7. In several judgments of the Supreme court and this court, it has been held that in view of non-obstante clause appearing in Section 147 of the NI Act, 1881, the compounding of the offence under the said Act is controlled by the aforesaid section only and is not contingent or dependent on the provisions/scheme contemplated under section 320 of the Cr. P.C.

8. While dealing with this issue, the Supreme Court of India in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 has held that compounding of the offence at later stages of litigation in a cheque bouncing cases is permissible.

9. A reference in the aforesaid case has been made of Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305 wherein the Supreme Court had an occasion to examine whether an offence punishable under Section 138 of the NI Act, which is a special law, could be compounded.

10. The Supreme Court was of the view that the provision is only intended to prevent dishonesty on the part of the drawer of the Negotiable Instrument in issuing cheques without sufficient funds or with a view to induce a payee or holder in due course to act upon it. It only seeks to promote the efficacy of bank operations and ensures credibility in transacting business through cheques. It was held that in such matters, there should not be any denial for compounding of offences. The aforesaid view has been reiterated by the Supreme Court in K.M. Ibrahim v. K.P. Mohammad and Another, (2010) 1 SCC 798.

11. The Parliament, realising this aspect, has inserted section 147 of the NI Act.

12. In Damodar S. Prabhu (supra), the following guidelines have been issued by the Supreme Court with respect to compounding.

THE GUIDELINES

(i) In the circumstances, it is proposed as follows:

(a) That directions can be given that the writ of summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused.

(b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stag