TaxTMI 
TaxTMI 
2019 (6) TMI 312
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....81 by the Court of Sh. N.K. Laka, Metropolitan Magistrate, Dwarka Courts, New Delhi, for dishonour of a cheque dated 1st December, 2009 for an amount of Rs. 75 lacs against the alleged liability of Rs. 3 crores; (b) that the plaintiff appeared before the Court on 18th March, 2010 and the NBW was cancelled and the plaintiff granted bail; (c) that from a perusal of the complaint filed by defendant No.2 Prashant Mamgain on behalf of the defendant No.1 Tushar Patni against the plaintiff, the plaintiff came to know that previously also a complaint of offence under Section 138 of the NI Act was filed before the same Court by defendant No.2 as authorised representative of defendant No.1; (d) that in the previous complaint it was claimed that the defendant No.1, on 10th May, 2006 had given a friendly loan of Rs. 2 crores in cash to the plaintiff for a period of six months and the plaintiff had issued a cheque dated 4th October, 2007 for a sum of Rs. 2 crores in discharge of the said debt; the said cheque was returned dishonoured leading to the filing of that complaint; (e) that the plaintiff further learnt that the said previous complaint was withdrawn o....
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.... was purchased in the name of the plaintiff on 31st October, 2008 but the plaintiff never instructed anyone to purchase any stamp paper; (q) that it is quite evident that the signatures of the witnesses on the Compromise Deed dated 15th November, 2008 have been obtained subsequently; (r) that the daughter of the plaintiff has also confirmed that her signatures were taken on some papers by the defendant No.2 in a very clandestine manner, as the defendant No.2 "is harassing plaintiff's daughters and also blackmailing them"; (s) that the defendants are similarly extorting monies from one Mr. R.S. Chauhan using similar modus operandi; (t) that in the complaint case filed by the defendants against the said Mr. R.S. Chauhan, approximately 40 hearings in a year were held in the Court of Metropolitan Magistrate Sh. N.K. Laka; (u) that the plaintiff has also filed a complaint before the Bar Council of India under Section 35 of the Advocates Act, 1961 of professional misconduct against Mr. Alok Kumar Pandey, Mr. Vijay Nath and Mr. R.K. Thakur, Advocates, and it was confessed by Mr. Alok Kumar Pandey, Advocate that he obtained signatures on alleged....
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....e in which the Compromise Deed dated 15th November, 2008 had been filed was not found inspite of best efforts. On request of the counsels, the hearing on the legal question enquired on 30th November, 2018 was adjourned to today. 9. Before proceedings to record the contentions of the counsels, it is deemed appropriate to record the reasons for which it was felt on 30th November, 2018 that the suit for cancellation of a compromise forming part of a judicial proceeding does not lie. 10. Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (CPC) provides for compromise of a suit and empowers the Court to record an agreement, compromise or satisfaction of the suit claim or part thereof and to pass a decree in accordance therewith and the Proviso thereto clarifies that where it is alleged by one party and denied by the other party that an adjustment or satisfaction has been arrived at, the Court shall decide the question. Order XXIII Rule 3A of the CPC bars a suit to set aside a decree on the ground that the compromise on which the decree is passed was not lawful. It was felt that (i) the proceedings in a complaint case under Section 138 of the NI Act, though not a suit....
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....5 has quashed the said criminal complaint and the said order has attained finality; however, two other complaints are pending; (vii) that Order XXIII Rule 3 of the CPC requires an application in terms thereof to be filed and whereupon only a decree in terms thereof is passed and if any of the party wants to challenge the decree or the compromise deed, has to do so before the same Court; the reason therefor is that the party praying to have the compromise deed set aside will have to satisfy the same Court before whom the compromise was arrived at and filed and which accepted the compromise; (viii) reliance is placed on Banwari Lal Vs. Chando Devi (1993) 1 SCC 581 and Rajwanti Vs. Kishan Chand Shehrawat 2009 (113) DRJ 166; (ix) that no withdrawal/compromise or decree under the provisions of Order XXIII of the CPC has taken place in the present case; (x) that a Criminal Court cannot pass a decree and only a Civil Court can pass a decree; reliance is placed on Section 2(2) of the CPC defining a "decree'; (xi) that a criminal complaint filed under the provisions of Section 138 of the NI Act is a cognizable punishable offence and tried as per ....
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....ion 138 of the NI Act for amicable settlement through mediation, the procedure to be followed upon settlement and the legal implications of breach of the mediation settlement. It was held: (a) that proceedings under Section 138 of the NI Act stand categorized as quasi civil; (b) that in order to provide meaningful interpretation and to do complete justice in such proceedings, Criminal Courts are known to have often utilized the principles of CPC in such cases; Supreme Court also has encouraged early settlement in such proceedings; (c) that proceedings under Section 138 of the NI Act have been considered as quasi civil by all the Courts, therefore, in principle, the procedure which applies to recording a settlement in civil cases could guide the procedure to be followed and be applied for recording a settlement between the parties to a complaint under Section 138 of the NI Act; guidance on this aspect is provided by the provisions of Order XXIII Rule of the CPC and the practice followed by the Civil Courts, upon a compromise arrived at between the parties to a suit; (d) that CrPC as well as NI Act have provided only for compounding of offences; no....
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....) that there can be no manner of doubt that once a settlement is reported to the Court and made the basis of seeking the Court's indulgence, the parties ought not to be able to resile from such a position; and, (m) that in the event of either party resiling from the agreed upon settlement which has received the imprimatur of the Court, the party attempting to breach the settlement and undertaking cannot be permitted to avoid making the payment and to violate the undertaking given to the Court. 14. The counsel for the defendants lastly relies on Dunia Lal Datta Vs. Nagendra Nath Datta AIR 1982 Cal 163 concerned with a suit for declaration that a decree in another suit was void, inoperative and not binding upon the plaintiff. It was held that Section 31 of the Specific Relief Act empowers the Court to cancel a written instrument and that an award and judgment of a Court is not a written instrument. 15. The counsel for the plaintiff has responded to the dicta of the Division Bench of this Court in Dayawati supra by contending that the same is in the context of mediated settlement and it is not so here. 16. Though the counsel for the plaintiff in her arguments has rep....
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....r compromise deed bearing signatures of both the parties. In view of the compromise, the case may be disposed of. RO&AC (Naresh Kumar Laka) 1st LMM/Dwarka Courts Delhi/15.10.2009", the following order was passed: "Tushar Patni Vs. Sushila Badola 15.10.2009 File taken up today on an application for withdrawal of the case being compromised. Present: AR of complainant with counsel Shri Alok Kumar Pandey Shri Vijay Nath counsel for accused Ld. P.O. has gone to conduct TIP in Tihar Jail. A compromise deed filed. Statement of of parties recorded. In view of the statement, the complaint is dismissed as withdrawn as compromised. File be consigned to record room. (Naresh Kumar Laka) 1st LMM/Dwarka Courts Delhi/15.10.2009" and, (V) that the Compromise Deed placed on record was as under: "COMPROMISE DEED THIS DEED OF COMPROMISE IS MADE AT NEW DELHI ON THIS THE 15th day of November, 2008 between Mr. Tushar Patni, S/o Shri M.J. Patni, P.O. Box No.880, Abu Dhabi, UAE through his authorized Attorney Shri Prashant Mamgain, S/o Shri Prithvi Dhar....
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....gainst each other in respect of dispute of present Cheque amount. 5. That in case the Second Party fails to pay the agreed amount i.e. Rs. 3 Crores within the stipulated period as mentioned above, the First Party shall be at liberty to pursue the pending Complaint Case No.2675/01/07 against the Second Party. The First Party shall be at liberty to file/institute civil as well as criminal including registration of FIR against the Second Party in respect of the aforesaid Cheque amount before the competent Court of law. 6. That the present compromise has been made without using any undue influence, coercion, force, threat, allurement etc. against each other. IN WITNESS THEREOF the parties to this Deed of Compromise have singed and executed the same at New Delhi in the presence of the following witness on the day, month and year mentioned hereinabove: WITNESSES: Sd. TUSHAR PATNI THROUGH HIS AUTHORIZED ATTORNEY Sd. (PRASHANT MAMGAIN) FIRST PARTY Sd. (SUSHILA BADOLA) SECOND PARTY" 18. The doubts expressed by me on 30th November, 2018 and as recorded in the....
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....remedies by a fresh suit or otherwise. Further, it has been held in V.N. Sreedharan Vs. Bhaskaran AIR 1986 Ker 49, Parvathiyammal Vs. Sivathani Pillai AIR 1974 Mad 147 and M.L. Lakshmi Bai Vs. Kendaganna Swamy MANU/KE/0239/1993 that a compromise decree is passed by a Court upon the exercise of its adjudicatory powers and the resultant decree would be an expression of such adjudication and fall within the ambit of Section 2(2) of the CPC and is thus capable of execution. D. A perusal of the Compromise Deed as reproduced hereinabove, placed on record of the complaint case and acting whereon the Complaint Court dismissed the complaint as withdrawn, also shows the parties to have agreed that in the event of the plaintiff failing to pay the agreed amount of Rs. 3 crores as provided therein, the remedy agreed upon by the parties and on which Complaint Court puts its imprimatur was inter alia of pursuing the complaint case and which could be pursued only after revival of the same. Thus, it is not as if the compromise divested the Complaint Court of the jurisdiction. E. Irrespective of whether the defendants were entitled to file fresh complaints of offence of dishonour o....
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....s. Baby (2012) 1 SCC 260, G.N. Raju Vs. B.S. Jaiprakash 2005 SCC OnLine Kar 728 and Sunny Vs. State of Kerala ILR 2018 (1) Ker 554 that an offence under Section 138 of the NI Act is in the nature of a civil wrong with criminal overtones. I. Even otherwise, compromises as envisaged under Order XXIII Rule 3 are also permitted in criminal proceedings. Reference in this regard may be made to Madan Mohan Abbot Vs. State of Punjab AIR 2008 SC 1969, Sarvesh Kumar Shukla Vs. State of U.P. MANU/UP/1305/2007 and Gulab Vs. Board of Revenue Rajasthan AIR 2012 Raj 131. The Supreme Court, in Afcons Infrastructure Ltd. Vs. Cherian Varkey Construction Company Pvt. Ltd. (2010) 8 SCC 24 has held that principles underlying Order XXIII Rule 3 can be applied to mediated settlements as well. J. I am unable to find any difference between a mediated settlement and a settlement as recorded above in the complaint case. Thus, from what has been held by the Division Bench of this Court in Dayawati supra also, it follows that the challenge to the compromise permitted by law in Section 138 proceedings has to be before the same Court and not by way of a separate suit. K. I also concur ....
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....o Ramrao Bhikaji Bodhke Vs. Mohammed Ashfaq 2011 SCC OnLine Bom 1281, Omana Jose Vs. State of Kerala 2014 SCC OnLine Ker 6347 (DB), M.K. Products Vs. Blue Ocean Exports (P) Ltd. 2016 SCC OnLine Cal 4496, Subhash Chand Vs. State (Delhi Administration) (2013) 2 SCC 17, Satya Pal Singh Vs. State of Madhya Pradesh (2015) 15 SCC 613 and Mallikarjun Kodagali Vs. State of Karnataka (2019) 2 SCC 752. M. Such an interpretation is also conducive to keeping the stream of justice clean and orderly and to prevent multiplicity of proceedings and abuse of jurisdictions. N. A Civil Court per se is not empowered to comment on the proceedings in a Court governed by the CrPC. What the plaintiff is wanting this Court to enquire into, hold and declare is that the Complaint Court was defrauded into recording a compromise and/or committed an illegality of procedure in recording the compromise and disposing of the complaint and/or that the plaintiff is not bound by the said compromise and for which in my humble opinion the Civil Courts have no jurisdiction. While the High Court is permitted to, under Section 482 of the Cr.P.C., pass any orders to prevent abuse of the process of the Court....