2024 (9) TMI 56 - HC - Indian Laws

Dishonour of Cheque - seeking issuance of warrant of attachment and initiating contempt proceedings against the respondent/accused for willful default and breach of settlement order and undertaking - amicable settlement through mediation - Section 421 read with Section 431 Cr.P.C. - HELD THAT - In Dayawati vs Yogesh Kumar Gosain 2017 (10) TMI 1063 - DELHI HIGH COURT , the issue regarding legal permissibility of referring a complaint case under Section 138 NI Act for amicable settlement through mediation, procedure to be followed upon settlement and the legal implications of breach of mediation settlement were considered - it was observed in Dayawati vs Yogesh Kumar Gosain that the Court would record the statement of the parties or their authorized agents on oath affirming the settlement, its voluntariness and undertaking to abide by it, followed by an appropriate order accepting the agreement. Further, the Court taking on record the settlement stands empowered to make consequential directions, if required. There is no bar that unless the matter is forwarded to mediation for settlement, the same cannot be entered before the Court itself. The Court only needs to be satisfied that the settlement is lawful and consent of the parties is voluntary and not obtained under coercion or undue influence - Even when the Court permits the compounding of an offence, which is permissible under NI Act, there is no bar that the Court cannot compound the offence without forwarding the matter to mediation. When the matter is not forwarded to mediation but the Court records the settlement or compounds the offence, it is obvious that the proposal receives imprimatur or authoritative approval of Court. In the facts and circumstances, there does not appear to be any reason to presume that the settlement was not voluntary or under any force, pressure or coercion. The fact that the respondent had come with a DD dated 06.11.2020, which was handed over to the petitioner/complainant on 09.11.2020 reflects that he had already made up his mind to settle the issues. Once the said settlement was accepted by the petitioner and also received imprimatur of the Court, there does not appear to be any reason for the Court to arrive at a contrary conclusion vide impugned order dated 19.12.2020 that there was no effective settlement bringing criminal proceedings to an end. The settlement was legal and voluntary without any force, pressure or coercion. The proceedings after settlement between the parties vide order dated 09.11.2020 were only for the purpose of ensuring the compliance of settlement by the parties. This Court is of the considered opinion that once a valid settlement stood recorded, the consequences of the same are bound to ensue and as such, on default or non-compliance or breach of settlement, learned MM is bound to pass an order under Section 421 read with Section 431 Cr.P.C. to recover the amount agreed to be paid by the respondent/accused in the same manner, as a fine would be recovered as held in Dayawati vs Yogesh Kumar Gosain. The impugned order dated 19.12.2020 passed by learned MM is set aside. The settlement between the parties in terms of order dated 09.11.2020 is binding. Accordingly, application under Section 421 read with Section 431 Cr.P.C. shall be considered by the learned Trial Court in accordance with law - petition disposed off.

Summary

Issues Involved:
1. Validity of the settlement agreement recorded by the Court.
2. Whether mediation is mandatory for settlement under Section 138 NI Act.
3. Voluntariness of the respondent's consent to the settlement.
4. Applicability of Sections 421 and 431 Cr.P.C. for enforcement of the settlement.

Detailed Analysis:

1. Validity of the Settlement Agreement:
The petitioner challenged the order dismissing their application for issuance of a warrant of attachment and initiating contempt proceedings. The settlement agreement was recorded by the learned MM on 09.11.2020, where the respondent agreed to pay Rs. 1.20 crore. The respondent handed over a demand draft of Rs. 5 lacs and post-dated cheques. The Court emphasized that once a valid settlement is recorded, it is binding and cannot be retracted unless there is evidence of coercion or undue influence.

2. Mediation Requirement:
The petitioner argued that the settlement recorded by the Court does not require a formal mediation process to be valid. The Court agreed, stating that there is no bar on recording a settlement directly without referring the matter to mediation. The Court noted that the Trial Court misinterpreted the scope of the observations in Dayawati vs Yogesh Kumar Gosain, which pertain to mediated settlements, not settlements recorded directly by the Court.

3. Voluntariness of Consent:
The respondent claimed the settlement was not voluntary and was made under pressure. However, the Court found no evidence to support this claim. The respondent's statement recorded on 09.11.2020 indicated that the settlement was made without any force, pressure, or coercion. The Court highlighted that the respondent had already prepared a demand draft before the settlement was recorded, indicating a premeditated decision to settle.

4. Enforcement of Settlement:
The Court held that the learned MM erred in dismissing the application under Sections 421 and 431 Cr.P.C. Once a valid settlement is recorded, the Court is bound to enforce it. The Court referred to Dayawati vs Yogesh Kumar Gosain, which supports the enforcement of settlements recorded by the Court. The Court set aside the impugned order and directed the Trial Court to consider the application for warrant of attachment in accordance with law.

Conclusion:
The High Court set aside the impugned order dated 19.12.2020, holding that the settlement recorded on 09.11.2020 is binding and enforceable. The application under Sections 421 and 431 Cr.P.C. shall be considered by the learned Trial Court. The petition was disposed of, and a copy of the order was forwarded to the Trial Court for compliance.