Offences under Section 138 of the Negotiable Instruments Act are compoundable under Section 147 of the same Act, and once a settlement is reached between the parties, courts may set aside the conviction and acquit the accused accordingly.

O R D E R

Dated this the 25^th day of May, 2026 This Criminal Revision Petition has been filed under Sections 397 and 401 of the Code of Criminal Procedure challenging the judgment dated 22.01.2020 in Criminal Appeal No.158/2015 on the file of the Additional Sessions Judge-VI, Thiruvananthapuram, arising out of the judgment dated 05.05.2015 in C.C. No.89/2012 on the file of the Judicial First Class Magistrate Court-III, Nedumangad.

2. The revision petitioner herein is the sole accused in the above case.

The learned Magistrate, after trial, found the accused guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the NI Act”) and convicted him thereunder. Consequently, the accused was sentenced to undergo simple imprisonment for a period of one year and to pay a fine of Rs.13,16,000/-. In default of payment of the fine amount, the accused was directed to undergo simple imprisonment for a further period of six months. It was further ordered that, if realised, the fine amount shall be paid to the complainant as compensation under Section 357(1)(b) of the Code of Criminal Procedure.

3. Aggrieved by the said conviction and sentence, the accused preferred Criminal Appeal No.158/2015 before the Sessions Court, Thiruvananthapuram. The learned Additional Sessions Judge, upon hearing the appeal, allowed the same in part. While confirming the conviction entered by the trial court, the appellate court modified the sentence and ordered the accused to undergo imprisonment till the rising of the court and to pay compensation of Rs.16,00,000/- to the complainant. Aggrieved thereby, the accused has preferred the present revision petition.

4. Today, when the matter was taken up for hearing, the learned counsel appearing for the revision petitioner and the learned counsel appearing for the second respondent/complainant submitted that the disputes between the parties have been amicably settled out of court. An affidavit sworn to by the second respondent/complainant has also been placed on record.

5. In the said affidavit, the complainant has stated that the revision petitioner has paid an amount of Rs.10,00,000/- on 26.04.2023 towards full and final settlement of all claims arising out of the transaction in question and that the complainant has accepted the said amount in full satisfaction of the entire claim. It is further stated that no further amount remains due from the revision petitioner and that the complainant has no objection in compounding the offence and setting aside the conviction and sentence imposed against the accused.

6. The offence punishable under Section 138 of the NI Act is compoundable by virtue of Section 147 of the NI Act. In view of the settlement arrived at between the parties and in the light of the affidavit filed by the complainant, this Court is satisfied that the entire dispute has been amicably settled and that the offence has been validly compounded.

7. Consequently, the judgment of conviction and order of sentence dated 05.05.2015 in C.C. No.89/2012 on the file of the Judicial First Class Magistrate Court-III, Nedumangad, as modified by the judgment dated 22.01.2020 in Criminal Appeal No.158/2015 on the file of the Additional Sessions Judge-VI, Thiruvananthapuram, are set aside, and the revision petitioner/accused is acquitted of the offence under Section 138 of the NI Act in terms of Section 320(8) of the Code of Criminal Procedure read with Section

147 of the NI Act.

8. The bail bond, if any, executed by the revision petitioner shall stand cancelled, and he shall be set at liberty.

Accordingly, this Criminal Revision Petition is allowed.