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Can't Be Sidestepped by Settlement Agreement:
The
has dismissed a petition seeking to quash proceedings under
against a woman, holding that a
(SPA) executed in favour of her husband could not be circumvented merely because a subsequent settlement agreement recorded that his company would discharge the outstanding amount. Justice Alok Jain observed that the petitioner could not
"take benefit of the said agreement"
while simultaneously disowning the underlying liability.
The Clash of Documents: Settlement Agreement vs
The dispute arose from business dealings between the petitioners—Tripti Srivastava, proprietor of a firm, and her husband Durgesh Srivastava, a Director of
—with respondent Yogesh Singla. Both the firm and the company owed liabilities to the respondent. On
, a
was executed, Clause 1.1 of which recorded that ₹85,00,000 would be paid by the "Second Party" and that
"the above said outstanding amount will be paid in totality by IQ Med Healthcare Pvt Ltd on behalf of both the firms."
A cheque issued pursuant to this arrangement was dishonoured, leading to a complaint and a by the . The petitioners—Tripti Srivastava and her firm—sought quashing of the complaint and the under , arguing that since the husband and his company had undertaken the liability, she could not be compelled to face criminal proceedings.
However, the respondent pointed to a crucial document the petitioner had allegedly concealed: a executed by Tripti Srivastava in favour of her husband, under which she agreed to ratify all acts lawfully done on her behalf. This, the respondent argued, meant that Durgesh Srivastava's actions—including signing the settlement agreement—were to be treated as her own.
High Court's Reasoning: Selective Benefit Not Permissible
Justice Jain noted that the petitioner and her husband had created two separate entities—her proprietorship and his private limited company—both of which had business dealings with the respondent. The court observed that
"
, the petitioner No.1 on one hand wishes to take benefit of the said agreement, whereas, on the other hand does not wish to discharge her liability."
The court further relied on a judgment of the in
Mohammed Samdani Bashi Vs. Syed Issac Basha
(2006), which held that an authorization (SPA) was never revoked before the issuance of cheques, and therefore the petitioner could not be permitted to take a defence that the other accused had owned up the responsibility. The court also emphasised that the petitioner remained
"an important party to the
"
because the complainant would have to rely on his business dealings with her to demonstrate a
.
No Merit in Quashing Petition
The court categorically declined to interfere at this stage, holding that any concession would
"amount to interfering with and prejudging the issues involved in the trial."
It also noted that despite repeated calls to demonstrate her
by making an effort towards discharge of the liability, counsel for the petitioner
"categorically declined to do so."
The court dismissed the petition, leaving the parties to have the disputed questions—including the effect of the settlement agreement and the —resolved at trial.
Key Observations from the Judgment
-
" , the petitioner No.1 on one hand wishes to take benefit of the said agreement, whereas, on the other hand does not wish to discharge her liability."
-
"The petitioner No.1 would be an important party to the for the reason that the complainant at the stage of demonstrating the will have to rely upon the business dealings with petitioner No.1."
-
"Any concession granted to petitioner No.1 at this stage would amount to interfering with and prejudging the issues involved in the trial."
Final Verdict
The petition was dismissed as devoid of merit. All pending applications were disposed of. The case reinforces the principle that a cannot be ignored through a settlement agreement where the principal seeks to evade liability while retaining the benefits of the same arrangement.
