A general perspective amongst the public is that a legal dispute in India, no matter how small it is, takes an obnoxiously long time to conclude and because of this, many of the people who are in need of resorting to the help of a legal professional and courts in India, either end up settling of the dispute outside court or they may end up not pursuing the matter at all by categorising it as a lost cause.
We obviously can’t do anything
about the people who chose to not pursue the matter at all, but in cases where
the matter has been filed and the parties, during or after the pendency of the
matter, meet outside the court and develop an understanding amongst themselves
which may lead them to a possible settlement, one must assume that it is the
end of that particular dispute.
Well, the situation was not so
clear prior to the Supreme Court putting forward its views about the status of
the matter U/s 138 Negotiable Instruments Act which has been settled by both the
parties outside the court, specifically after the trial court and appellate courts
have decided over the issue in entirety of the matter.
The courts of the magistrates/
JMFC’s treat the request to withdraw a matter as a discretion of the court,
which they are completely justified in most of the cases. The JMFC’s have the responsibility
to ensure that any process which has been initiated or performed outside the
court, must have been agreed by the parties on their own free will and both
parties have given their free consent to enter into such settlements, without
any coercion by any party over the other. But the question which was most
ambiguous was what happens once the matter has been adjudicated by the trial
court, or even the appellate court and high Court in this matter, Can settlement
be entered into at any stage of trial or does it become discretion of the court
before which it is placed henceforth? And most importantly, under what legal
provisions do such a settlement take place?
The Hon’ble Division Bench of the
Supreme Court of India in New Win Export and Anr Vs A. Sunramaniam [Crl Appeal
No 2948 of 2024] on July 11, 2024, decided that yes, if matter is settled
between both parties, then there is no need to continue with the proceedings in
court. The magistrate court has to make sure that the settlement has been
reached without any coercion, fraud or any other malafide tactics by any party
and once assured no such practices are used, the court must allow the
settlement of the dispute between the parties.
Brief Facts of the Case:
- The matter came into being when some of the cheques issued by the accused were dishonoured due to insufficient funds.
- The Complainant/ Respondent filed a complaint under Section 138 of Negotiable Instruments Act, 1881 against the Appellants/ accused where the Trial Court vide order dated 16.10.2012 convicted the Appellants and imposed a sentence of one year of simple imprisonment for each accused person.
- The Appellants/ accused persons challenged their conviction before the Appellate Court, which overruled the findings of the Trial Court and acquitted the Appellants.
- The High Court in its order dated 01.04.2019 set-aside the order of the Appellate Court and restored the order of the Trial Court, convicting the Appellants.
- Before filing the present appeal in Supreme Court, Appellants and Respondent-complainant had entered into a settlement agreement dated 27.01.2024. As per the agreement, the Appellants have paid Rs. 5,25,000 to the Respondent-complainant, who has agreed to settle the present matter for the said amount. Also, the complainant does not have any objection if the conviction of the Appellants is set aside.
The Hon’ble Supreme Court of
India Decided that Offences under Section 147 of the Negotiable Instruments Act
are compoundable in nature and this settlement agreement can be treated to be
compounding of the offence. All the same, Section 320 (5) of CrPC (now Section359
of BNSS) provides that if compounding has to be done after conviction, then it
can only be done with the leave of the Court where appeal against such
conviction is pending.
Now, when the accused and
complainant have reached a settlement permissible by law and this Court has
also satisfied itself regarding the genuineness of the settlement, the Hon’ble
Court thinks that the conviction of the appellants would not serve any purpose
and thus, it is required to be set aside.
The Hon’ble court placed reliance
on the case Raj Reddy Kallem v. The State of Haryana & Anr. (2024)
ibclaw.in 121 SC, wherein the Hon’ble Court followed the same principles and
quashed a conviction under the NI Act, by invoking its powers under Article
142, even though the complainant therein declined to give consent for
compounding of the offence, observing that the accused has sufficiently
compensated the complainant.
Decision of the Hon’ble Supreme Court of India
The Hon’ble Supreme court of India,
after considering all facts and circumstances of the matter was inclined to dispose
off the mater in favour of the accused persons/ appellants.
Considering the totality of the
circumstances and compromise between the parties, this appeal was allowed and
acquitted the appellants by setting aside the impugned order dated 01.04.2019
as well the Trial Court’s order dated 16.10.2012. Appellant no.2, who was
exempted from surrendering by the Supreme Court of India Court, need not
surrender and his sureties were hereby discharged.
Conclusion
The whole concept of settlement
in a court case much more dynamic than it seems. It changes the outcome of a
case based on the nature of the case, like if it is Civil or criminal case etc.
Or in cases of the types of cases in
which settlement has been achieved, like in this case it was a proceeding under
the negotiable Instruments Act, which would be different from other types of
cases. Also, sometimes the stage at which the settlement is achieved also plays
a crucial part.
The Hon’ble Supreme Court has reiterated
a few words regarding the principles of compounding of offences in the context
of NI Act. The Hon’ble court established that dishonour of cheques is a
regulatory offence which was made an offence only in view of public interest so
that the reliability of these instruments can be ensured. A large number of
cases involving dishonour of cheques are pending before courts which is a
serious concern for our judicial system. Keeping in mind that the ‘compensatory
aspect’ of remedy shall have priority over the ‘punitive aspect’ of such cases
and courts should encourage compounding of offences under the NI Act, if parties
are willing to do so.
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Sources/ References:
New Win Export and Anr Vs A. Sunramaniam [Crl Appeal No 2948of 2024]
Raj Reddy Kallem v. The State of Haryana & Anr. (2024)
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Unlocking Justice: A Guide to Plea Bargaining under BNSS
National Lok Adalat: Bridging Justice Beyond Courtrooms With A Hint of Compassion
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