In Brief
P. Chandrakala was convicted in 2005 for dishonoring a cheque under Section 138 of the Negotiable Instruments Act after her appeal and revision petition failed. She was sentenced to six months' imprisonment and fined, with compensation ordered to the complainant. However, during the High Court revision proceedings, the parties settled and the full amount was paid. The Supreme Court allowed their plea to compound the offence and set aside the conviction, but imposed exemplary costs of ₹1 lakh to be paid to a child welfare orphanage within four weeks. The Court warned that failure to produce payment acknowledgement within one week thereafter would revive the conviction.
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