2022 (11) TMI 1040 - HC - Indian Laws

Dishonor of Cheque - insufficient funds - legally enforceable debt or not - compromise entered into between parties - section 138 of NI Act - HELD THAT - In the backdrop of aforesaid litigation, now compromise has been effected between the parties. Both the parties have agreed about payment of Rs.1 crore each in aforesaid suit bearing Nos.60, 61, 62, 63, 64, 65, 66 and 67 of 2017, along with proportionate interest amount, so as to make the total of the entire decretal amount, equal to the extent of amount of Rs.8.35 crore, lying deposited, alongwith up-to-date interest, which accrued on the basis of the amount deposited in the form of FDRs. The party of second part i.e. Atma Tubes Products Limited has no objection and has unconditionally agreed for the release/payment of said amount i.e. Rs.8.35 crore, alongwith up-to-date interest, which has accrued thereon, qua the FDRs, aforesaid, towards full and final settlement of all the claims, by way of decretal of the suits, either individually or in the consolidated form. In pursuance of the aforesaid compromise, so reached, between the parties, now a request is made to the Courts concerned, either to decide the civil summary suits bearing Nos.60, 61, 62, 63, 64, 65, 66 and 67 of 2017, individually or in a consolidated manner, as it deems appropriate, whereby, the decretal amount, in total, should be to the extent of Rs.8.35 crore, together with the up-to-date interest, on the amount of FDRs. In pursuance of release of aforesaid amount, the concerned Courts shall also dispose of all the appeals filed to challenge the judgments of conviction passed in complaints under Section 138 of the NI Act and pass appropriate orders, thereupon. The present revision petitions stand disposed of, being compromised.

Summary

Issues:
Challenge to orders in summary recovery suits dated 02.12.2017 by Addl. District Judge. Compromise between parties leading to decree of compromise dated 24.09.2022. Conviction under Section 138 of NI Act. Challenge to validity of deed of compromise dated 05.10.2005. Criminal complaint under Sections 406 and 420 IPC. Deposit of Rs.8.35 crore in Commercial Court. Compromise agreement for payment of Rs.8.35 crore in recovery suits. Withdrawal/compounding of complaints under Section 138 of NI Act. Request for disposal of recovery suits and related appeals.

Analysis:
The revision petitions before the High Court challenged the orders passed by the Addl. District Judge in eight summary recovery suits dated 02.12.2017. The background of the case involved business dealings between two parties, where an amount of Rs.8,05,73,904.29 became due due to dishonoured cheques. Subsequently, complaints under Section 138 of the Negotiable Instruments Act, 1881, were filed, resulting in convictions and orders for imprisonment and compensation against the defendants. Additionally, separate summary-recovery suits were filed under Order 37 of CPC to recover the principal amount of dishonoured cheques along with interest, with one defendant challenging the validity of the deed of compromise dated 05.10.2005.

The party of the first part had also filed a criminal complaint under Sections 406 and 420 IPC, which was pending before the Magistrate at Ludhiana. During these proceedings, an amount of Rs.8.35 crore was deposited in the Commercial Court in compliance with a Supreme Court order. Subsequently, a compromise was reached between the parties, agreeing to pay Rs.1 crore each in the recovery suits to make the total decretal amount equal to the deposited sum, including interest. The defendants agreed to release the amount for settlement and withdrawal of complaints under Section 138 of the NI Act, with a commitment to refrain from further litigation.

As a result of the compromise, a request was made to the Courts to decide the recovery suits and related appeals in line with the agreed settlement. The Courts were urged to dispose of the suits to the extent of Rs.8.35 crore along with accrued interest, leading to the withdrawal of the criminal complaint under Sections 406 and 420 IPC. Consequently, the High Court disposed of the revision petitions as compromised, reflecting the agreement reached between the parties.