Offences to be compoundable
Section 147 of the Negotiable Instruments Act, 1881 deals with offences to be compoundable. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable]. The Act came into force on 01 Mar 1882.
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable].
Section 147, The Negotiable Instruments Act, 1881 (Act 26 of 1881).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Damodar S. Prabhu v. Sayed Babalal H.
Court's Decision & Legal Precedent
Judgment of Main Case order-9.pdf 2010-05-03. Crl.A. 963/2010 (with 964-966/2010). K.G. Balakrishnan CJI / P. Sathasivam / J.M. Panchal 3-judge reportable. DATE-CHECK false positive (markdown header ‘VERIFY THIS IS THE ORDER’); body is the named 3 May 2010 compounding-guidelines reportable. Isolates NI 147: s.147 non-obstante makes s.138 compoundable despite CrPC 320(9); graded cost guidelines (0/10/15/20% of the cheque) for compounding at successive stages. Map ni-act 147 cited only. Do not pad ni-act 138 (already filled by Dashrath).
On this section: NI 147’s non-obstante clause makes cheque-dishonour compoundable despite CrPC 320(9); compounding at later stages attracts graded costs of 0/10/15/20% of the cheque (Damodar S. Prabhu). Do not pad ni-act 138 (already filled).
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Jik Industries Ltd. vs Amarlal V. Jumani
Court's Decision & Legal Precedent
Approval and sanction of a scheme of compromise and arrangement under Section 391 of the Companies Act, 1956 does not have the effect of automatically compounding an offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The offence, if committed prior to the scheme, does not stand automatically compounded by virtue of the scheme sanction. Compounding of criminal offences, including those under the NI Act, requires the explicit consent of the complainant or person aggrieved, and this consent cannot be assumed or implied from the sanction of a corporate restructuring scheme. The statutory procedure for compounding prescribed in Section 320 of the Criminal Procedure Code, 1973 applies to compounding of NI Act offences despite the non obstante clause in Section 147 of the NI Act, as Section 147 only makes offences compoundable but does not prescribe the mode and manner of such compounding.
On this section: Makes all offences under NI Act compoundable; Court interpreted that non obstante clause does not eliminate requirement of explicit consent under Section 320 CrPC
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Madhav Saran Agarwal vs Msx Mall Pvt. LTD
Court's Decision & Legal Precedent
Section 138/141 proceedings under the Negotiable Instruments Act against a corporate debtor are covered by the moratorium provision in Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, as such proceedings relate to transactions evidencing debt of the corporate debtor and result in depletion of its assets through compensation orders, thereby directly impacting the object of the moratorium which is to preserve the corporate debtor's assets during the insolvency resolution process so it can continue as a going concern and be rehabilitated. However, the moratorium applies only to the corporate debtor and not to natural persons (Directors/officers) in charge of and responsible for the conduct of the business of the corporate debtor, who remain liable to prosecution under Section 138/141 as the corporate debtor is a necessary party to such proceedings.
On this section: Cited to show that offences under NI Act are compoundable; reflects compensatory rather than purely punitive nature
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Naresh Kumar Gupta vs Sood Resins and Polymers
Court's Decision & Legal Precedent
Section 138/141 proceedings under the Negotiable Instruments Act against a corporate debtor are covered by the moratorium provision in Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, as such proceedings are 'proceedings' within the meaning of that section. The moratorium applies only to the corporate debtor and not to natural persons (Directors and officers) who can continue to be prosecuted under Section 141 of the Negotiable Instruments Act. The rules of statutory construction (noscitur a sociis and ejusdem generis) cannot be applied to restrict the meaning of 'proceedings' in Section 14(1)(a) when the expression is designedly wide and the object of the statute is clear - which is to preserve the corporate debtor's assets during the insolvency resolution process.
On this section: Analyzed to show that Section 138 offences are compoundable, indicating their quasi-criminal nature
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Gurrapu Sunil Kumar vs Naidu Daiva Vara Prasad
Court's Decision & Legal Precedent
An offence under Section 138 of the Negotiable Instruments Act can be compounded at the appellate stage under Section 147, and upon such compromise, the conviction and sentence are liable to be set aside.
On this section: Applied to allow compounding of the offence at the appellate stage.
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Seema vs Rajender
Court's Decision & Legal Precedent
Offences under Section 138 of the NI Act are compoundable at the appellate stage upon mutual settlement between parties, warranting the setting aside of conviction.
On this section: Provision stating that every offence punishable under the NI Act is compoundable.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Act, 1881 is controlled by Section 147 and the scheme contemplated by Section 320 of the Code of Criminal Procedure (hereinafter "CrPC") will not be applicable in the strict sense since the latter is meant for the specified offences under the Penal Code, 1860." The Court then noted that: " 12. Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 CrPC which <span id="page-42-0"></span><sup>19</sup> …
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… Sub-section (1) of Section 320 enumerates the offences which are compoundable without the leave of the court, while sub-section (2) of the said Section specifies the offences which are compoundable with the leave of the court. 12. Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 CrPC which states that "No offence shall be compounded …
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… Sub-section (1) of Section 320 enumerates the offences which are compoundable without the leave of the court, while sub-section (2) of the said Section specifies the offences which are compoundable with the leave of the court. 12. Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 CrPC which states that "No offence shall be compounded …
Questions about Section 147
What have the courts held on Section 147 of the Negotiable Instruments Act?
Damodar S. Prabhu v. Sayed Babalal H. (03 May 2010) is the leading judgment on this section among those set out below: NI 147’s non-obstante clause makes cheque-dishonour compoundable despite CrPC 320(9); compounding at later stages attracts graded costs of 0/10/15/20% of the cheque (Damodar S. Prabhu). Do not pad ni-act 138 (already filled). Another 5 judgments on this section are set out below, 4 of them from the Supreme Court. They run from 2010 to 2024.
How do I find court cases under Section 147 of the Negotiable Instruments Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: NI Act 147, section 147 NI Act, section 147 of the Negotiable Instruments Act. People searching for it also type negotiable instrument act 147 and 147 ni act application format. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 6 reported judgments on this section are set out on this page, beginning with Damodar S. Prabhu v. Sayed Babalal H. (03 May 2010).
When did Section 147 of the Negotiable Instruments Act come into force?
Section 147 of the Negotiable Instruments Act, cited as NI Act 147, came into force on 01 Mar 1882, having been enacted on 09 Dec 1881. It is in force as at the date shown on this page.
Other sections of this Act
- 138. Dishonour of cheque for insufficiency, etc., of funds in the account312 words
- 142A. Validation for transfer of pending cases299 words
- 143. Power of Court to try cases summarily297 words
- 143A. Power to direct interim compensation291 words
- 142. Cognizance of offences290 words
- 141. Offences by companies287 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.