Section 147 of the Negotiable Instruments Act allows compounding of offences at any stage, even post-conviction, prioritizing compensation over punishment.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 and Section 147 - Compounding of offences - The petitioner was convicted under Section 138 and subsequently appealed. The appellate court confirmed the conviction, which led to a revision petition. The parties later entered a compromise, settled for Rs. 2,00,000, leading to the compounding of the offence, allowing the petitioner to be acquitted. (Paras 7, 45)

(B) Appellate Court's role - Courts can allow compounding of offences under Section 147 of the Negotiable Instruments Act at any stage, even post-appeal confirmation. (Para 41)

(C) Inherent powers of the High Court - The court can exercise its inherent powers to secure justice and prevent any miscarriage, particularly where both parties have reached a settlement. (Paras 24, 41)

Facts of the case:
The petitioner was convicted for issuing a bounced cheque amounting to Rs. 2,00,000 and sought revision after the appellate court upheld the conviction. A Joint Memorandum of Compromise was later filed detailing the agreed settlement.

Findings of Court:
The court permitted the compounding, leading to the annulment of the conviction and acquittal of the petitioner based on a settlement reached with the respondent.

Issues: The primary issue was whether the High Court could nullify an appellate court's conviction decision based upon a compromise.

Ratio Decidendi: The court asserted that according to Section 147 of the Negotiable Instruments Act, offences can be compounded at any stage, emphasizing the compensatory rather than punitive nature of these proceedings.

Result: Conviction and sentence annulled, and the petitioner acquitted.

ORDER

Heard Mr.V.Vishnu, learned counsel appearing for the Petitioner and Mr.S.Prabhu, learned counsel for the Respondent and also this Court has taken the assistance of Mr.M.Karunanithi, learned Government Advocate (Criminal Side).

2. This Criminal Revision Petition has been filed by the petitioner to set aside the judgment dated 05.04.2025 made in C.A.No.34 of 2022 on the file of learned IV Additional District Sessions Judge, Madurai, confirming the judgment passed by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 by order dated 20.04.2022.

3. The facts of the case in a nutshell, led to filing of this Criminal Revision Petition and necessary for disposal of the same, are as follows:-

a) The Petitioner was convicted and sentenced for the offence under Section 138 of the Negotiable Instruments Act , by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 by the judgment dated 20.04.2022, to undergo simple imprisonment for one year and to pay a fine of Rs.2,000/-, in default of payment of amount, to undergo further period of simple imprisonment for three months. Aggrieved by the order of the Trial Court, the Petitioner filed a Criminal Appeal in C.A.No.34 of 2022 before the learned IV Additional District Sessions Judge, Madurai.

b) The learned IV Additional District Sessions Judge, Madurai confirming the judgment passed by the learned District Munsif cum Judicial Magistrate, Peraiyur in S.T.C.No.643 of 2016 dated 20.04.2022, dismissed the said Appeal vide order dated 05.04.2025. Aggrieved by the same, the present Criminal Revision Petition has been filed.

4. The Co-ordinate Bench of this Court, while admitting the Criminal Revision Case, vide order dated 22.07.2025, had ordered suspension of sentence in Crl.M.P.(MD) No.9301 of 2025 in Crl.R.C. (MD) No.725 of 2025, with the following directions:-

“(i) The petitioner shall deposit a sum of Rs.40,000/- (Rupees Forty Thousand only) to the credit of S.T.C.No.643 of 2016 on the file of the learned Judicial Magistrate, Peraiyur, on or before 19.08.2025, failing which, the sentence suspended shall automatically dismissed, and the respondent is at liberty to execute the sentence imposed by the trial Court against the petitioner in the manner known to law;

(ii) On such deposit, the petitioner shall execute a bond for a sum of Rs.25,000/- (Rupees Twenty Five Thousand only) with two sureties, each for a like sum to the satisfaction of the learned Judicial Magistrate, Peraiyur;

(iii) The sureties shall affix their photographs and Left Thumb Impression in the surety bond and the trial Court may obtain a copy of their Aadhar card or Bank Pass Book to ensure their identity; and

(iv) The petitioner shall appear before the learned Judicial Magistrate, Peraiyur, on all working days at 10.30 a.m., until further orders.

(v) On such deposit, the learned Judicial Magistrate, Peraiyur; shall re-deposit the said sum in a Nationalised Bank, so that, the amount accrues interest and the same can be disbursed depending upon the outcome of the Criminal Revision Case in Crl.R.C.(MD) No.875 of 2025.”

5. Thereafter, the Petitioner seeks extension of time by filing Crl.MP(MD)No.11706 of 2025 before this Court seeking to extend the time for depositing the sum of 40,000/- to the credit of S.T.C.No. 643/2016 on the file of the learned Judicial Magistrate, Peraiyur, as directed by the Co-ordinate bench of this Court dated 22.07.2025 in Crl.M.P(MD) No. 9301/2025 in Crl.RC(MD) No.875 of 2025. After hearing the submissions of learned counsel for the parties, this Court vide order 02.09.2025 allowed the said petition with the following directions:

“4.Today, when the matter is being taken up, Mr.J.Vishnu, learned Counsel for the petitioner submits that due to financial constraints and unavoidable personal circumstances, the petitioner could not mobilise the fund within the time stipulated by this Court vide order, dated 22.07.2025 in Crl.M.P. (MD)No.9301 of 20

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Section 147 of the Negotiable Instruments Act allows compounding of offences at any stage, even post-conviction, prioritizing compensation over punishment.

Cases Referred (3)