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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

THE HONOURABLE SRI JUSTICE N.TUKARAMJI CRIMINAL PETITION No.6991 OF 2024

DATE: 23.03.2026

Between :

Vanga Srinivasa Reddy

… Petitioner AND

The State of Telangana Rep by its Public Prosecutor, High Court for the State of

Telangana and another.

… Respondents.

O R D E R:

This Criminal Petition is filed assailing the order dated

15.05.2024 passed in Crl.M.P. No.106 of 2024 in C.C. N.I. No.7 of 2024 on the file of the learned Principal Junior Civil Judge-cum-

Metropolitan Magistrate, Ranga Reddy District.

2. The petitioner/accused had filed the said application under Section 147 of the Negotiable Instruments Act, 1881 (for short, “the N.I. Act”), seeking closure of the complaint proceedings to enable both

parties to pursue remedies arising out of a subsequent settlement.

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3. Heard Mr. T. Bala Mohan Reddy, learned counsel for the petitioner, and Mr. V. Yadu Krishna Sainath, learned counsel appearing

for respondent No.2/complainant.

4.1. The brief facts, as borne out from the record, are that the respondent/complainant filed a private complaint under Section 200 of the Code of Criminal Procedure, 1973 alleging commission of an offence under Section 138 of the N.I. Act by the petitioner/accused. Upon taking cognizance, the case was initially registered as S.T.C. No.593 of 2023 and subsequently renumbered as C.C. N.I. No.7 of

2024.

4.2. During the pendency of the proceedings, it is stated that the parties, with the intervention of elders, arrived at an amicable settlement, whereby the petitioner agreed to pay a sum of Rs.4,00,000/- in full and final settlement against the original cheque amount of Rs.6,00,000/-. In furtherance of the said understanding, the petitioner executed a letter of undertaking dated 02.02.2023, agreeing to discharge the undertaken liability on or before 02.03.2023. However, the petitioner failed to honour the said undertaking within the stipulated

time.

4.3. Nonetheless, contending that the said settlement gives rise to a fresh cause of action and supplants the original cause of action, the

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petitioner filed the present application seeking dismissal of the complaint proceedings.

4.4. The learned trial Court, upon consideration of the material on record, dismissed the application, observing that the letter of undertaking stood frustrated due to non-compliance within the agreed time and that the continuation of prosecution under Section 138 of the N.I. Act was legally sustainable. The Court further held that the

application lacked bona fides.

5. Learned counsel for the petitioner contends that the settlement arrived at between the parties constitutes a binding agreement, reducing the liability to Rs.4,00,000/-, and that the same gives rise to a fresh cause of action. It is argued that once such a settlement is entered into, the original complaint based on the dishonored cheque for Rs.6,00,000/- cannot be continued, as it would amount to prosecuting a superseded liability. Reliance is placed on the judgment of the Hon’ble Supreme Court in Gimpex Private Limited v. Manoj Goel, (2022) 11 SCC 705, to contend that a subsequent agreement between parties

can give rise to an independent cause of action.

6. Per contra, learned counsel for respondent No.2 submits that the petitioner failed to comply with the terms of the settlement, and therefore, the letter of undertaking cannot be enforced to defeat the

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pending criminal proceedings. It is further contended that the decision in Gimpex Private Limited (supra) is distinguishable on facts, as the said case dealt with the maintainability of a subsequent complaint arising from a fresh cheque issued pursuant to settlement, whereas in the present case no such subsequent instrument was issued. It is argued that accepting the petitioner’s contention would leave the complainant remediless, thereby defeating the object of Section 138 of

the N.I. Act.

7. I have carefully considered the submissions made by both

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