Negotiable Instruments Act, 1881: ss. 147 and 138 - Compounding of offence - Appeal before the Supreme Court involving offences punishable under s. 138 - Settlement having been arrived at between the parties - HELD: Compounding of offences is allowed, and the conviction of the accused in each case is set aside.

s. 147 - Compounding of offences punishable under s. 138 - Guidelines - HELD: In view of the non-obstante clause, which has overriding effect, the compounding of offences under the Act is controlled by s. 147, and the scheme contemplated by s. 320, Cr.PC will not be applicable in the strict sense since the latter is meant for the specified offences under the Penal Code - It is evident that the permissibility of the compounding of an offence is linked to the perceived seriousness of the offence and the nature of the remedy provided - It is quite clear that with respect to the offences of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect - The problem in such cases is with the tendency of litigants to belatedly choose compounding as a means to resolve their dispute - Furthermore, unlike s. 320, CrPC, s. 147 of the Act provides no explicit guidance as to at what stage compounding can or cannot be done and whether compounding can be done at the instance of the complainant or with the leave of the court - In the absence of statutory guidance, parties are choosing compounding as a method of last resort instead of opting for it as soon as the Magistrate takes cognizance of the complaints - If the accused is willing to settle or compromise by way of compounding of the offence at a later stage of litigation, it is generally indicative of some merit in the complainant's case - In such cases, it would be desirable if the parties choose compounding during the earlier stages of litigation - If, however, the accused has a valid defence such as a mistake, forgery, or coercion among other grounds, then the matter can be litigated through the specified forums - Guidelines laid down for filing of applications for compounding of offences involving s. 138 of the Act and imposition of costs on parties who unduly delay compounding of offences - It would be mandatory for the complainant to disclose that no other complaint in relation to the same offence has been filed before any other court - Since s. 147 does not carry any guidance on how to proceed with the compounding of offences, there exists a legislative vacuum in this regard - Even in the past, the Supreme Court has used its power to do complete justice under Article 142 of the Constitution to frame guidelines in relation to subjects where there was a legislative vacuum - Code of Criminal Procedure, 1973 - s. 320 - Constitution of India, 1950 - Article 142 - Legislation - Legislative vacuum - Bridged by judicial pronouncement.