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Smart Summary

Factual and Procedural Background

The appellants were convicted and sentenced by the Trial Court under Section 138 of the Negotiable Instruments Act, 1881, for dishonour of cheque(s). The conviction was affirmed by the High Court of Himachal Pradesh on 13 September 2017. While the Special Leave Petition was pending before the Supreme Court, the parties executed a compromise deed dated 16 January 2018, whereby the respondent-complainant agreed to accept ₹1,14,000 as full and final settlement. According to the deed, ₹80,000 had already been paid and the remaining ₹34,000 was deposited in the respondent’s bank account. Notices were issued by the Supreme Court and a stay was granted; however, no appearance was entered on behalf of the respondent, presumably because the dispute had been settled.

Legal Issues Presented

  1. Whether the criminal proceedings and consequent conviction under Section 138 of the Negotiable Instruments Act ought to be quashed when the parties have arrived at a full and final monetary settlement.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court noted that:

  • A duly signed compromise deed evidenced full payment of the agreed sum to the complainant.
  • The complainant expressly accepted the amount in satisfaction of both the cheque amount and the fine imposed by the Trial Court.
  • Given the settlement and absence of objection from the complainant, continuation of criminal proceedings would serve no useful purpose.

On these considerations, the Court held that the ends of justice would be met by quashing the conviction and all related proceedings.

Holding and Implications

APPEAL ALLOWED; CONVICTION AND ALL PROCEEDINGS UNDER SECTION 138 NI ACT QUASHED.

All pending applications were disposed of. The decision terminates the criminal liability of the appellants in this matter and effects only the parties to the compromise; it sets no new precedent beyond reaffirming that courts may quash Section 138 proceedings once a bona fide settlement is reached.

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    GHANSHYAM GAUTAM v. USHA RANI (SINCE DECEASED) THROUGH L.R.S RAVI SHANKAR

    IN THE SUPREME COURT OF INDIA

    CRIMINAL APPELLATE JURISDICTION

    CRIMINAL APPEAL NO. OF 2024

    (@SLP(Crl.) No(s). 3289 OF 2018) GHANSHYAM GAUTAM & ANR. ... PETITIONER(S) Versus

    USHA RANI (SINCE

    DECEASED) THROUGH L.R.S

    ... RESPONDENT(S)

    O R D E R

    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

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    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.

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    6. Pending applications stand disposed of accordingly.

    ……………………………………………………………J.

    [VIKRAM NATH]

    ………………………………………………………………J.

    [ SATISH CHANDRA SHARMA]

    NEW DELHI;

    JANUARY 04, 2024.

    3

    ITEM NO.33 COURT NO.8 SECTION II-C

    S U P R E M E C O U R T O F I N D I A

    RECORD OF PROCEEDINGS

    Petition(s) for Special Leave to Appeal (Crl.) No(s). 3289/2018 (Arising out of impugned final judgment and order dated 13-09-2017 in CRMMO No. 178/2016 passed by the High Court of Himachal Pradesh at Shimla)

    GHANSHYAM GAUTAM & ANR. Petitioner(s)

    VERSUS

    USHA RANI (SINCE DECEASED) THROUGH L.R.S Respondent(s) (IA No. 35899/2018 - EXEMPTION FROM FILING C/C OF THE IMPUGNED

    JUDGMENT

    IA No. 35898/2018 - PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES)

    Date : 04-01-2024 This petition was called on for hearing today.

    CORAM :

    HON'BLE MR. JUSTICE VIKRAM NATH HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA For Petitioner(s) Ms. Radhika Gautam, AOR For Respondent(s)

    UPON hearing the counsel the Court made the following

    O R D E R

    Leave granted. The appeal is allowed in terms of the signed order.

    Pending application(s), if any, shall stand disposed of.

    (SONIA BHASIN)

    COURT MASTER (SH)

    (RANJANA SHAILEY)

    COURT MASTER (NSH)

    [Signed Order is placed on the file]

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    GHANSHYAM GAUTAM v. USHA RANI (SINCE DECEASED) THROUGH L.R.S RAVI SHANKAR
    (Jan 4, 2024)