S.138 NI Act | Proceedings For Cheque Dishonour Be Quashed Once Complainant Signs Deed Accepting Amount In Full & Final Settlement: Supreme Court

Gyanvi Khanna

9 Jan 2024 3:28 AM GMT

  • S.138 NI Act | Proceedings For Cheque Dishonour Be Quashed Once Complainant Signs Deed Accepting Amount In Full & Final Settlement: Supreme Court

    In a Criminal Appeal arising out of proceedings under Section 138 of the Negotiable Instruments Act, 1881, the Supreme Court held that once the settlement has been arrived at and the complainant has signed the deed accepting an amount in full and final settlement, the proceedings under this provision must be quashed. “Considering the overall facts and circumstances of the case, we...

    In a Criminal Appeal arising out of proceedings under Section 138 of the Negotiable Instruments Act, 1881, the Supreme Court held that once the settlement has been arrived at and the complainant has signed the deed accepting an amount in full and final settlement, the proceedings under this provision must be quashed.

    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," observed the bench of Justices Vikram Nath and Satish Chandra Sharma.

    The instant appeal was filed challenging the September 13, 2017, order passed by the High Court of Himachal Pradesh, Shimla Bench. By its impugned order, the High Court had upheld the conviction of the accused persons/ the present petitioners under Section 138 of the N.I. Act.

    However, in the meantime, a compromise deed was entered between the parties. As per this deed, the respondent-complainant agreed to accept a certain amount as full and final settlement of the cheque amount and the fine imposed by the Trial Court and confirmed by the High Court.

    In view of these facts and circumstances, the Top Court allowed the present appeal.

    Case Title: GHANSHYAM GAUTAM vs. USHA RANI (SINCE DECEASED) THROUGH L.R.S RAVI SHANKAR., Diary No.- 8428 - 2018

    Citation : 2024 LiveLaw (SC) 23

    Click here to read/ download the order


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