Interpreting Section 147 of the Negotiable Instruments Act, the apex court said every offence committed under the Act was compoundable.

The apex court noted that there has been conflicting judgements from High Court as to whether an offence relating to bouncing of cheque was compoundable.

While some High Courts had held that the offence was not compoundable, others took the view that it was compoundable, provided the parties to the dispute reached an amicable settlement.

However, the apex court pointed out that Section 147 gave the liberty for an accused to escape conviction by paying the compounding fee.

The apex court passed the ruling while allowing the appeal filed by Vinay Devanna Nayak charged with issuing a cheque for Rs 24,000 that had bounced at the bank.

He was convicted to six months imprisonment by a trial court in Karnataka which noted that the accused failed to pay the amount despite issuance of a notice.