Mediation agreement in cheque dishonour proceedings is not evidence, but a court may pause trial to honour agreed payment time.

A mediation agreement reached in a complaint under the Negotiable Instruments Act does not, by itself, operate as binding evidence or as a decree-like adjudication in the criminal proceeding, because mediation is confidential and statements made there are not independently admissible to prove or disprove liability. However, where the parties have agreed a limited period for payment, the Magistrate may grant a reasonable opportunity to honour that settlement and keep the case in abeyance until the period expires, provided the trial is not unduly delayed. If the settlement is not honoured, the complaint may then proceed according to law.

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Issues: Whether a mediation agreement entered in a complaint under Section 138 of the Negotiable Instruments Act, 1881 could be treated as binding evidence or as a decree-like adjudication in the criminal proceeding, and whether the Magistrate should defer evidence and await the settlement period fixed in the mediation agreement.

Analysis: Mediation in civil disputes operates as a facilitative process, but in a criminal prosecution it does not produce an award or decree unless the settlement is accepted by the competent court in a manner known to law. A mediation agreement, by itself, has no independent legal effect in the criminal case and cannot be treated as evidence to either prove or disprove liability, particularly in view of the confidentiality of mediation proceedings and the inadmissibility of what transpired therein. At the same time, complaints under Section 138 of the Negotiable Instruments Act are meant to be disposed of expeditiously, yet where the parties have themselves agreed to a limited period for payment, the court may grant a reasonable opportunity to honour that settlement, so long as it does not unduly frustrate the trial.

Conclusion: The mediation agreement could not be treated as evidence or as a civil decree in the criminal complaint, but the Magistrate was justified in being directed to keep the case in abeyance till the agreed period expired and then proceed according to law if the settlement was not honoured.

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