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SUPREME COURT OF INDIA
VIKRAM NATH, SATISH CHANDRA SHARMA, JJ.
Ghanshyam Gautam & Anr. – Appellants
Versus
Usha Rani (Since Deceased) Through L.R.S – Respondents
Criminal Appeal No. 65 of 2024 (@SLP(Crl.) No(s). 3289 of 2018)
Decided on : 04-01-2024
Settlement - Negotiable Instruments Act - The court quashed the proceedings under Section 138 of the NI Act based on the settlement reached between the parties, accepting a specific amount as full and final settlement of the default amount and the fine imposed by the Trial Court.
Fact of the Case:
The appellant was convicted and sentenced under Section 138 of the NI Act. The parties settled their scores and filed a compromise deed accepting a specific amount as full and final settlement.
Finding of the Court:
The court found that the settlement reached between the parties warranted the quashing of the proceedings under Section 138 of the NI Act.
Issues: Settlement agreement in relation to proceedings under Section 138 of the NI Act.
Ratio Decidendi: Once a settlement has been reached and the complainant has accepted a specific amount in full and final settlement, the proceedings under Section 138 of the NI Act need to be quashed.
Final Decision: The appeal was allowed, and the proceedings under Section 138 of the NI Act, along with the impugned orders, were quashed.
ORDER :
Leave granted.
2. In proceedings under Section 138 of the Negotiable Instruments Act (‘NI’ Act), 1881, the appellant was convicted and was further sentenced.
3. In the meantime, the parties have settled their scores and have filed a compromise deed dated 16th January, 2018, according to which, the respondent-complainant agreed to accept the amount of Rs. 1,14,000/-(Rupees One Lakh and Fourteen Thousand) as full and final settlement of the cheque amount and the fine imposed by the Trial Court, which had been confirmed by the High Court. The compromise deed is filed as Annexure P-6 to the special leave petition and a photocopy of the same is also filed along with a typed copy. Paragraph 2 of the said compromise deed mentions that the amount of Rs. 1,14,000/- (Rupees One Lakh and Fourteen Thousand) has been paid in two parts; initially Rs. 80,000/-(Rupees Eighty Thousand) was paid and Rs. 34,000/-(Rupees Thirty Four Thousand) has been deposited in the bank account later.
3. Notices were issued and stay was granted by this Court. However, no one has put in appearance on behalf of the respondents, maybe for the reason that there has been a settlement. This matter is pending since 2018.
4. Considering the overall facts and circumstances of the case, we are of the view that once the settlement has been arrived at and the complainant has signed the deed accepting a particular amount in full and final settlement of the default amount and the fine amount awarded by the Trial Court, the proceedings under Section 138 of the NI Act need to be quashed.
5. Accordingly, the appeal is allowed and the proceedings under Section 138 of the NI Act, along with impugned orders passed, stand quashed.
6. Pending applications stand disposed of accordingly.
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The court allows room for the trial court to evaluate the implications of a settlement while acknowledging the petitioner's right for future appeal.
The court can quash convictions under the Negotiable Instruments Act when parties reach a genuine compromise, emphasizing recovery over punishment.
The court can set aside a conviction and sentence under Section 138 of the Negotiable Instruments Act based on a compromise settlement between the parties, and may impose a cost in line with relevant....
Compromise, when complete payment is made, allows for quashing of proceedings under the Negotiable Instruments Act.
The court can exercise inherent powers to quash criminal proceedings and accept a settlement, considering the nature and gravity of the offence, public interest, and compensatory aspect of the offenc....
Dishonour of cheque – Offence of dishonour of cheque is fully compoundable.
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