In the event that the compromise deed is found to be void ab initio on account of coercion, the very basis for quashing of the first complaint is removed since the settlement agreement is deemed to have never existed and hence it had no effect on the liability subsisting under the first complaint. The appellants may then approach the competent court for reinstatement of the original complaint and the trial can proceed on that basis.
SC Explained: The Precautions in Compromise in Cheque Bounced Case
New Delhi (ABC Live India): Compromise in Cheque Bounced Case : The Supreme Court of India on 08/10/2021 in case titled M/s Gimpex Private Limited Vs Manoj Goel ruled that, how violation of a compromise deed in Section 138 of the Negotiable Instruments Act 1881should be dealt with.
Facts of the case;
On 17 and 27 April 2012, the appellant entered into three High Seas Sale Agreements with Aanchal Cement Limited. On the request of ACL, the appellant paid an amount of Rs. 6.96 crores (Rs. 6,96,74,666/-) as customs duty and Rs. 8.04 crores (Rs. 8,04,12,495/-) as wharfage charges in order to clear the goods on behalf of ACL which is alleged to have promised to repay the amount with interest. It has been alleged that though the appellant supplied the goods, ACL failed to make payments. On 6 August 2012, ACL issued 18 cheques dated 8 August 2012, each in the amount of Rs. 50 lakhs, for a total value of Rs. 9 crores in favour of the appellant in part payment of the outstanding liability. On 21 August 2012, the 18 cheques were dishonoured upon presentation with an endorsement: “payments stopped by drawer”/ “insufficient funds”. A complaint was lodged by the appellant on 10 September 2012, with the Commissioner of Police, Egmore, Chennai, against ACL and its directors for offences under Sections 409 and 506(1) of the Indian Penal Code 18606, which was registered as an FIR in Central Crime Branch on 1 February 2013 as Crime No. 21 of 2013. Between 22 September 2012 and 5 October 2012, the appellant issued legal notices under Section 138 of the NI Act to ACL and its directors - Sitaram Goel, Manoj Goel (the respondent) and Mukesh Goel in respect of the dishonor of the 18 cheques.
On 22 October 2012 and 6 November 2012, the appellant filed criminal complaints under Section 138 of the NI Act, in respect of the dishonour of the cheques of the value of Rs. 9 crores. This is the first set of complaints filed by the appellant.
On 3 March 2013, Mukesh Goel, a director of ACL was arrested by the Central Crime Branch. A bail application was filed by Mukesh Goel on 5 March 2013.
During the pendency of the bail application, ACL approached the appellant to settle the matter and arrived at a compromise. On 12 March 2013, the appellant and ACL entered into a deed of compromise and paid Rs 3 Crore to Appellant and agreed and undertake to pay the balance amount of Rs. 7 crore within 3 months in 3 equal instalments of Rs. 2,33,33,333/- every month and issued three cheques for the same but all the cheques issued qua the above mentioned compromise deed were also dishonoured and a second complaint was instituted on 16 February 2017 by the appellant under Section 138 of the NI Act.
The one of directors of accused company during the pending filed petition U/s 482 of CrPC to quash the deed of compromise challenged the deed of compromise as illegal, null and void, and for return of the cheques issued to the appellant pursuant to it, and prayed for quashing of second complaint against him U/s 138 as second sets of cheques were not issued for discharging his legal liability and the Madras High Court accepted the pleadings of accused and set aside the proceeding of second 138 compliant against accused but refused to quash the proceedings of first complaint U/s138.
Thereafter, the Appellants (Complainant) approached the Supreme Court against the order of Madras High Court, wherein second complaint was dismissed and the accused also approached the Supreme Court against the order of High Court as they pray for quashing the first complaint was declined by High Court.
The Apex Court finally ruled that, “ A submission was urged by the appellants that in the event the second complaint is found to be non-maintainable and the compromise deed is held to be invalid, they would be left remediless and thus, the first trial should be allowed to continue. We do not find any merit in this submission. In the event that the compromise deed is found to be void ab initio on account of coercion, the very basis for quashing of the first complaint is removed since the settlement agreement is deemed to have never existed and hence it had no effect on the liability subsisting under the first complaint. The appellants may then approach the competent court for reinstatement of the original complaint and the trial can proceed on that basis.”
Further operative part of judgment ruled that the order of High Court to quash the second complaint U/s 138 was wrong thus set aside the same, and also quashed the complaint first complaint U/s138 and criminal Complaint against accused.
Read the Complete Judgment of M/s Gimpex Private Limited Vs Manoj Goel
Case law referred in this case