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Chapter XVII - Of Penalties in Case of Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts

Section 147

Section 147: Offences to be compoundable

Section 147 makes every offence punishable under the Negotiable Instruments Act compoundable, notwithstanding the stated Code provisions.

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Need advice on Section 147?

This article is for general information. Refer to the Negotiable Instruments Act, 1881 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.

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Statutory text

Bare law

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable.

Applicability and limits

The statutory statement is about offences under this Act. In a cheque prosecution, the parties can consider the compounding route and have its legal effect addressed in the pending proceeding.

Compoundable does not mean an informal payment automatically erases every court order. Settlement terms, consent, the stage of the case and the appropriate court order need to be considered in the actual matter.

Hypothetical example

Hypothetical: after a section 138 complaint is filed, the parties agree on payment and wish to resolve the prosecution. They record the settlement and obtain advice on placing the compounding request before the relevant court.

Evidence and next steps

Identify all pending proceedings and the exact offence involved.

Record the settlement amount, performance terms and parties’ positions clearly.

Obtain the appropriate court order and retain proof of agreed payments and disposal.

Statutory and procedural context

Official consolidated Act, Chapter XVII. The bare-law text retains its Code of Criminal Procedure references. For an actual case, check the applicable procedural transition and court directions.

Practical checklist

Do

  • Identify all pending proceedings and the exact offence involved.
  • Record the settlement amount, performance terms and parties’ positions clearly.
  • Obtain the appropriate court order and retain proof of agreed payments and disposal.

Avoid

  • Do not treat this general guide as a case-specific court direction.

Glossary

Compounding
Resolution of a compoundable criminal offence through the legally recognised process.
Settlement terms
The agreed obligations whose performance and procedural effect must be documented.

Frequently asked questions

Is section 147 limited in its words to section 138?

No. It says every offence punishable under this Act is compoundable.

Does sending money alone close a pending court case?

Do not assume so. The effect of settlement must be addressed through the applicable court process and orders.

Does this guide specify a universal compounding cost?

No. Costs and conditions depend on applicable judicial guidance, case stage and the court’s directions; the section itself states no fixed percentage.

Need help applying this provision to your situation?

Contact Bizeneed

Last updated 10 October 2026