When parties have amicably settled dispute, conviction and sentence of accused under Negotiable Instruments Act can be set aside: High Court

Read Order: Parkash v. Bhim Sain and another 

LE Staff

Chandigarh, July 9, 2021: Quashing a two-year imprisonment awarded in a cheque dishonoured case, the Punjab and Haryana High Court has held that when the parties have amicably settled their dispute, the conviction and sentence of the accused under Section 138 of the Negotiable Instruments Act can be set aside.

Justice Arvind Singh Sangwan was hearing a petition seeking quashing of the conviction awarded by the trial court through an order dated December 6, 2016, as per which the petitioner was held guilty for commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (cheque dishonour) and was sentenced to undergo rigorous imprisonment for a period of two years.

Later his appeal against the order was dismissed by the lower appellate court in 2018.

In the present petition before the court, the petitioner informed that he was sentenced for dishonouring a cheque for a sum of Rs 2,70,000. Later, the petitioner paid an amount of Rs 1,10,000 as part payment of a settlement arrived at between the parties and subsequently, the remaining amount was also paid.

The petitioner’s counsel further submitted that as of today, the petitioner has paid the entire cheque amount and in that context, the compromise was effected between the parties in 2020, which is duly attested by the notary public.

The compromise is supported by an affidavit sworn by the complainant and he is satisfied with the compromise and has no objection if the present petition before the high court is disposed of.

Deciding the matter, the HC said that after hearing the counsel for the parties considering the fact that the petitioner has faced a protracted trial since 2016 and is not involved in any other case, and that the petitioner has already paid the entire cheque amount of Rs. 2,70,000 to the complainant who has duly acknowledged the same by way of compromise as well as the affidavit, the present petition is allowed and the judgment of conviction dated December 6, 2016 and order of sentence passed by the trial court are set aside.

“It has been held by the Supreme Court in Ashish Subba vs. Manoj Kumar Agarwal and another that when the parties have amicably settled their dispute, the conviction and sentence of the accused, under Section 138 of the N.I. Act can be set aside,” he added.