SC: Cheque issued in settlement pact presumed to be for discharge of debt

NEW DELHI: The Supreme Court has held that a cheque issued pursuant to a deed of settlement between parties will be presumed to have been issued towards discharge of a debt or liability under Section 138 of the Negotiable Instruments Act (NI Act), which fastens criminal liability in cheque bounce cases (M/s Gimpex Private Limited v. Manoj Goel).

The case involved two sets of cheques. The first set of cheques which were issued by Aanchal Cement Limited, allegedly towards discharge of the liability, were dishonoured. Consequently, criminal complaints under Section 138 came to be filed

against ACL’s directors.

Thereafter, a deed of compromise was entered into on March 12, 2013. The deed of compromise was partially implemented by the payment of an amount of ₹3 crore by demand draft to the complainant.

Upon receipt of this amount, the appellant Gimpex Private Limited was to grant its non-objection to the plea of bail of ACL director Manoj Goel, who undertook to pay the balance of ₹7 crore within three months in instalments. The second set of cheques issued pursuant to the deed of compromise were also, however, dishonoured. This led to a second criminal complaint.

The single-judge of the

High Court was persuaded to quash the criminal complaint instituted against Goel on the basis of the second set of cheques. It was held that since the proceedings under the Negotiable Instruments Act for the dishonour of the first set of cheques was pending, the second set of cheques issued only on the basis of the deed of compromise could not be construed as being towards the discharge of a liability.

The Supreme Court, however, said that both the above grounds cannot be the basis to quash a Section 138 complaint in exercise of powers under Section 482 of the Code of Criminal Procedure (CrPC).