An offence under Section 138 of the Negotiable Instruments Act can be compounded under Section 147 even after the stage of conviction, provided both parties reach an amicable settlement and the court exercises its discretion to set aside the conviction.

Sandeep Sharma, J. (Oral)

Instant criminal revision petition filed under Section 438 read with Section 442 of the BNSS, lays challenge to judgment dated 29.05.2025, passed by the learned Additional Sessions Judge, Kullu, District Kullu, Himachal Pradesh, in Criminal Appeal No.105 of 2024, titled Sh. Dev Vs. H.P. State Co-operative Agriculture and Rural Development Bank Ltd., affirming judgment of conviction and order of sentence dated 07.08.2024, passed by the learned Judicial Magistrate First Class, Kullu, District Kullu, Himachal Pradesh, whereby the learned trial Court while holding the petitioner-accused (hereinafter, ‘accused’) guilty of having committed offence punishable under Section 138 of the Negotiable Instruments Act (in short the ‘Act’), convicted and sentenced him to undergo simple imprisonment for a period of two months and pay compensation to the tune of ₹90,000/- to the complainant.

2. Precisely, the facts of the case, as emerge from the record are that respondent-complainant (hereinafter, ‘complainant’) instituted a complaint under Section 138 of the Act, in the Court of learned Judicial Magistrate First Class, Kullu, District Kullu, Himachal Pradesh, alleging therein that accused with a view to discharge his liability issued Cheque for a sum of Rs.81,280/-, but fact remains that aforesaid Cheque on its presentation, was dishonoured. Since petitioner-accused failed to make the payment good within the time stipulated in the legal notice, respondent/complainant was compelled to initiate proceedings before the competent Court of law under Section 138 of the Act.

3. Learned trial Court on the basis of material adduced on record by the respective parties, vide judgment/order dated 07.08.2024, held the petitioner-accused guilty of having committed offence under Section 138 of the Act and accordingly, convicted and sentenced him, as per the description given hereinabove.

4. Being aggrieved and dissatisfied with the aforesaid judgment of conviction recorded by the Court below, accused preferred an appeal in the Court of learned Additional Sessions Judge, Kullu, District Kullu, Himachal Pradesh, which also came to be dismissed vide judgment dated 29.05.2025, as a consequence of which, judgment of conviction recorded by the learned trial Court came to be upheld. In the aforesaid background, present petitioner-accused has approached this Court by way of instant proceedings, seeking therein his acquittal after setting aside the judgments of conviction recorded by the Courts below.

5. Before case at hand could be heard and decided on its own merits, parties have entered into compromise, whereby petitioner/accused has agreed to pay entire amount of compensation to the respondent/complainant.

6. Counsel representing the petitioner, on instructions, states that entire amount of compensation is lying deposited with the learned trial Court and the same has been agreed to be released in favour of respondent/complainant. He states that since petitioner/accused has agreed to pay entire amount of compensation awarded by learned trial Court, this Court, while exercising power under Section 147 of the Act may proceed to compound the offence.

7. Mr. Deepak Sharma, Advocate, states that he has instructions to depose on behalf of respondent-complainant. He states that complainant has compromised the matter with the petitioner-accused and as per compromise, entire compensation amount has been deposited with the learned trial Court and in case amount lying deposited with the learned trial Court is ordered to be released in favour of the complainant, complainant shall have no objection in case the judgments of conviction passed by the learned Courts below are quashed and s