M/S GIMPEX PRIVATE LIMITED versus MANOJ GOEL

Citation: [2021] 11 S.C.R. 432 · Decided: 08-10-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 11 S.C.R.
432
[2021] 11 S.C.R. 432
M/S GIMPEX PRIVATE LIMITED
v.
MANOJ GOEL
(Criminal Appeal No. 1068 of 2021)
OCTOBER 08, 2021
[DR. DHANANJAYA Y CHANDRACHUD, VIKRAM NATH
AND B. V. NAGARATHNA, JJ.]
Negotiable Instruments Act, 1881 – ss. 138, 139 – Parallel
prosecutions arising from a single transaction u/s.138 –
Impermissibility of – Dishonour of cheques – First set of complaints
filed – Compromise – First complaint pending, cheques issued
pursuant to the compromise deed also dishonoured – Second
complaint filed – Both the complaints if can be pursued
simultaneously – Held: No – A settlement agreement effaces the
original complaint – Non-compliance of the terms of the settlement
agreement or dishonour of cheques issued subsequent to it gives
rise to a fresh cause of action – Allowing prosecution under both
sets of complaints would be contrary to the purpose of the enactment
– First complaint quashed – Further, Single Judge erred in quashing
the criminal complaint on a priori reasoning that the second set of
cheques issued in pursuance of the compromise deed were not in
discharge of a liability – Mere fact that a suit was instituted
challenging the compromise deed would not justify exercising
jurisdiction u/s.482 – It would continue to be valid until a decree of
the appropriate court setting it aside is passed – High Court failed
to notice the import of the presumption u/s.139 which can only be
displaced on the basis of evidence adduced at the trial – Judgment
of the Single Judge quashing the second complaint is set aside –
Code of Criminal Procedure, 1973 – s.482 – Penal Code, 1860 –
ss. 409, 506(1).
Negotiable Instruments Act, 1881:
s.138 – Ingredients of – Discussed.
s.138 – Purpose of – Held: Primary purpose of s.138 is to
ensure compensation to the complainant – The Act also allows for
parties to enter into a compromise, both during the pendency of the
complaint and even after the conviction of the accused.
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s.138 – Nature of offence under – Held: It is quasi-criminal,
while it arises out of a civil wrong, the law however, imposes a
criminal penalty in the form of imprisonment or fine.
s.139 – Presumption under – Burden of proof – Discussed.
Partly allowing the appeals, the Court
HELD: 1.1 Parallel Prosecutions
The nature of the offence under Section 138 of the NI Act
is quasi-criminal in that, while it arises out of a civil wrong, the
law, however, imposes a criminal penalty in the form of
imprisonment or fine. The purpose of the enactment is to provide
security to creditors and instil confidence in the banking system
of the country. Given that the primary purpose of Section 138 of
the NI Act is to ensure compensation to the complainant, the NI
Act also allows for parties to enter into a compromise, both during
the pendency of the complaint and even after the conviction of
the accused. [Paras 27, 28][450-D-E; 451-B]
1.2 Allowing prosecution under both sets of complaints
would be contrary to the purpose of the enactment. It is the
compensatory aspect of the remedy that should be given priority
as opposed to the punitive aspect. The complainant in such cases
is primarily concerned with the recovery of money, the conviction
of the accused serves little purpose. In fact, the threat of jail acts
as a stick to ensure payment of money. A complainant enters into
a settlement with open eyes and undertakes the risk of the
accused failing to honour the cheques issued pursuant to the
settlement, based on certain benefits that the settlement
agreement postulates. Once parties have voluntarily entered into
such an agreement and agree to abide by the consequences of
non-compliance of the settlement agreement, they cannot be
allowed to reverse the effects of the agreement by pursuing both
the original complaint and the subsequent complaint arising from
such non-compliance. The settlement agreement subsumes the
original complaint. Non-compliance of the terms of the settlement
agreement or dishonour of cheques issued subsequent to it, would
then give rise to a fresh cause of action attracting liability under
Section 138 of the NI Act and other remedies under civil law and
M/S GIMPEX PRIVATE LIMITED v. MANOJ GOEL
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SUPREME COURT REPORTS
[2021] 11 S.C.R.
criminal law. A contrary interpretation, which allows for the
complainant to pursue both the original complaint and the
consequences arising out of the settlement agreement, would
lead to contradi

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