B V SESHAIAH versus THE STATE OF TELANGANA & ANR

Citation: [2023] 2 S.C.R. 293 · Decided: 01-02-2023 · Supreme Court of India · Bench: KRISHNA MURARI · Disposal: Appeal(s) allowed

Judgment (excerpt)

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   [2023] 2 S.C.R. 293
293
B V SESHAIAH
v.
THE STATE OF TELANGANA & ANR.
(Criminal Appeal No. 284 of 2023)
FEBRUARY 01, 2023
[KRISHNA MURARI AND V. RAMASUBRAMANIAN, JJ.]
Negotiable Instruments Act, 1881 – s.138 – Conviction of the
Appellants – Revision filed before High Court – Meanwhile, the
parties entered into a Memorandum of Understanding (MoU) to
settle the dispute, in terms thereof Respondent No.2 was bound to
file a compromise petition before the High Court, however he failed
to do so – Revision dismissed by High Court, conviction of the
Appellants  confirmed – On appeal, held: This is a very clear case
of the parties entering into an agreement and compounding the
offence to save themselves from the process of litigation – When
such a step was taken by the parties and the law clearly allows
them to do the same, the High Court cannot override such
compounding and impose its will – Also, Respondent No.2 was duty
bound to file a compromise petition before High Court, and by not
doing the same has withdrawn key information from the High Court,
which led to unwarranted confirmation of the Appellants’ conviction
– Order of conviction set aside – Open to the parties to settle their
dispute as per the MoU.
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No.284 of 2023.
From the Judgment and Order dated 17.04.2018 of the High Court
of Judicature at Hyderabad for the State of Telangana and the State of
Andhra Pradesh in CRLR No.1678 of 2014.
With
Special Leave Petition (Crl) No.7100 of 2018.
M. Rambabu, Ms. Prity Kumari, N. Eswara Rao for M/s. M.
Rambabu and Co., Advs. for the Appellant.
S. Udaya Kumar Sagar, Lakshay Saini, Advs. for the Respondents.
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SUPREME COURT REPORTS
[2023] 2 S.C.R.
N. V. Subba Rao, Respondent-in-person
The Judgment of the Court was delivered by
KRISHNA MURARI, J.
1. Leave Granted.
2. The present Appeals have been filed by the Appellants herein
against the impugned order and judgment dated 17.04.2018 passed by
the High Court Of Judicature at Hyderabad in Criminal Revision Case
Nos. 1678/2014 and 1679/2014.
3. For the purpose of these Appeals, briefly, the facts of the present
case are that on a private complaint initiated by the Respondent No.2,
proceedings under Section 138 of the Negotiable Instruments Act, 1881
were initiated against the Appellants herein. These proceedings led to
the conviction of the Appellants by the trial court.
4. It is alleged that the Appellants, under the guise of making
investments took money from Respondent No.2 and made wrongful gain
for their profits.
5. After the Appellants’ conviction, A revision was preferred by
them in the High Court It is important to note that during the course of
the revision filed by the Appellants, the parties entered into a
Memorandum of Understanding to settle the dispute within themselves.
6. Clause 8 of the Memorandum Of Understanding stated that
the dispute was to be settled amicably, and in the event of the dispute
still not being amicably resolved, it must be first referred to a sole
Arbitrator. Clause 8 of the said Memorandum Of Understanding is as
under:-
“That any dispute under this document shall be resolved
amicably. In the event the dispute is not resolved amicably,
the matter shall be referred to the sole arbitration of Shri
Jonnalagadda Srinivasa Rao S/o Venkaiah whose decision
shall be final and binding on all the parties. On entering
reference, the sole arbitrator shall hear the parties and pass
award. The provisions of arbitration and conciliation act shall
apply to the arbitration proceedings. The place of arbitration
shall be Ongole only.
7. It is also to be noted that as per the terms of the agreement, the
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Respondent No.2 was bound to file a compromise petition before the
High Court, however he failed to do so. The lack of filing of such a
compromise petition, as agreed upon by the Respondent No.2, has now
led to the High Court dismissing the Revision and confirming the
Conviction of the Appellants.
8. In our view, the terms and conditions of the settlement entered
into by the parties binds them to settle the dispute amicably, or through
an arbitration as has been stated in clause 8 of the Memorandum Of
Understanding.
9. In such a circumstance, the Appellants cannot be convicted on
the basis of the orders passed by the courts below, as the settlement is
nothing but a compounding of the offence.
10. In the case of M/S Meters and Instruments Private Limited
& An

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