Madras High Court Annuls Conviction in Cheque Dishonour Case Following Compromise

Compounding of Offence Under Negotiable Instruments Act Prevails Over Bharatiya Nyaya Sanhita, 2023

In a significant judgment, the Madurai Bench of the Madras High Court has annulled the conviction of K. Balachenniappan under Section 138 of the Negotiable Instruments Act following a compromise between the parties involved. The judgment was delivered on September 19, 2025, by Justice Shamim Ahmed, who emphasized the overriding effect of Section 147 of the Negotiable Instruments Act over Section 359 of the Bharatiya Nyaya Sanhita, 2023 (BNSS), allowing compounding of offences even at the revisional stage.

Balachenniappan was originally sentenced to one year of simple imprisonment and a fine by the District Munsif cum Judicial Magistrate, Peraiyur, which was confirmed by the IV Additional District Sessions Judge, Madurai. Aggrieved, he filed a criminal revision petition which led to the suspension of his sentence pending the hearing. Amidst financial constraints, Balachenniappan sought additional time to comply with court-imposed conditions, which the court granted.

The case took a decisive turn when Balachenniappan deposited Rs. 40,000 with the court and agreed to pay the remaining Rs. 1,60,000 to the complainant, Jeyakrishnan, as part of a full and final settlement. The High Court recognized the compromise, highlighting that the object of the Negotiable Instruments Act is primarily compensatory and not punitive, thus permitting compounding at any stage of the proceedings.

Justice Ahmed referenced the Supreme Court guidelines from Damodar S. Prabhu v. Sayed Babalal H., advocating for the timely compounding of offences to alleviate the burden on the judicial system. The judgment underscores the inherent powers of the High Court to ensure justice, even when procedural restrictions exist in BNSS, asserting that special law prevails over general law.

This ruling not only brings closure to Balachenniappan's legal battles but also reinforces the precedence of the Negotiable Instruments Act in promoting amicable resolutions in cheque dishonour cases, furthering the cause of justice through compromise.

Bottom Line:

Negotiable Instruments Act, 1881 - Section 138 - Conviction for dishonour of cheque - Compounding of offences under Section 147 permissible even at the revisional stage - Bharatiya Nyaya Sanhita, 2023 (BNSS), Section 359, does not bar compounding of offences under the N.I. Act, as the latter carries an overriding effect - Compromise between the parties recognized and conviction annulled.

Statutory provision(s): Negotiable Instruments Act, 1881 - Sections 138, 147, Bharatiya Nyaya Sanhita, 2023 - Section 359

K.Balachenniappan v. Jeyakrishnan, (Madras)(Madurai Bench) : Law Finder Doc Id # 2783277