The Madurai Bench of the Madras High Court has ruled that an offence under Section 138 of the Negotiable Instruments Act, 1881, can be compounded even after the conviction has been confirmed by multiple appellate forums, provided the parties reach a settlement. Justice B. Pugalendhi allowed a petition to set aside a ten-month prison sentence after noting that the accused had settled the dues with the complainant.
Background of the Case
The case originated from S.T.C. No. 10 of 2022 before the Judicial Magistrate (Fast Track Court at Magisterial Level), Palani. On October 30, 2023, the petitioner, S. Senthilselvi, was convicted for a cheque bounce offence and sentenced to ten months of simple imprisonment, with a direction to pay Rs. 8,75,000/- as compensation to the complainant, R. Jayakumar.
This conviction was subsequently upheld by the Additional District Court (Fast Track Court), Palani, in Crl.A. No. 136 of 2023 on February 19, 2025. A further revision filed before the High Court in Crl.RC(MD). No. 378 of 2025 was also dismissed on August 28, 2025. Following these dismissals, the petitioner moved a Criminal Original Petition under Section 528 of the BNSS Act to compound the sentence based on a post-conviction settlement.
Arguments of the Parties
The petitioner was represented by counsels Mr. AK. Azagar Sami and Mr. K. Karnan. They submitted that a settlement had been reached and the dispute was now resolved.
Counsel for the respondent-complainant, M/s. S. Mamtha, confirmed the settlement, stating that the respondent was willing to compound the offence. It was informed to the court that the petitioner had paid Rs. 6,00,000/- via a Demand Draft dated April 9, 2026, while the remaining balance had been deposited during the earlier stages of the litigation.
Court’s Analysis and Decision
Justice B. Pugalendhi examined the materials and the nature of the offence. The court observed that Section 138 of the Negotiable Instruments Act is primarily a civil wrong in a criminal nature, intended to ensure the credibility of banking operations.
The court held:
“Considering the fact that the offence under Section 138 of the Negotiable Instruments Act is compoundable in nature and in view of the settlement arrived at between the parties, this Court is inclined to permit compounding of the offence.”
By allowing the petition, the High Court set aside the orders of the trial court, the appellate court, and the previous revision order. The petitioner was acquitted of the charges, and the offence was officially recorded as compounded.
Case Details Block
- Case Title: S. Senthilselvi vs. R. Jayakumar
- Case No.: Crl.OP. (MD) No. 7749 of 2026
- Bench: Justice B. Pugalendhi
- Date: April 21, 2026
