Delhi High Court: In a petition under Section 482 of the Code of Criminal Procedure, 1973 (‘CrPC’) filed by the petitioner for assailing the order of the Trial Court that directed trial to commence despite parties having settled in mediation, Amit Mahajan, J., allowed the petition, while observing that in view of the settlement between parties allowing proceedings to continue would be an abuse of the process of law, and held that the Court under Section 482 of the CrPC could exercise its right to curtail such abuse of the Court.
Background
Respondent 2 had filed a case under Sections 138, 141 and 142 of the Negotiable Instruments Act, 1881 (‘NI Act’) against the petitioner and certain other petitioner persons, for the dishonour of cheques.
The respondent filed a complaint alleging that a company in which the petitioner held 5% shares, had portrayed to the respondent that they were in the business of trading in security market and persuaded respondent 2 to invest certain amounts. Upon completion of transaction between the parties, cheques for a sum of Rs. 50,00,000/- and Rs. 30,45,000/-, were paid by the company in discharge of the liability. On the dishonour of the cheques, the above referred complaints were filed by respondent 2.
It was alleged that on a joint request of parties, the matter was referred to the Mediation Centre, Saket Courts, from 05-03-2016 till 27-08-2018. Further, the matter was listed before the Trial Court on more than ten occasions but were kept pending since mediation between the parties were underway.
The parties entered into a settlement agreement, which included a condition that said that the petitioner would be obligated to not engage in any act which would affect the rights of respondent in obtaining sums from the Investor Protection Fund (IPF) and the due amounts with respect to the settlement agreement, were fully paid on 16-05-2016 by the petitioner. The matter was kept pending before the Trial Court, which concluded on 17-05-2018.
The settlement agreement was further signed by the other related parties and payment for a total sum of Rs. 20,00,000/- along with Rs. 10,00,000/- in cash, was paid to respondent 2, against the dishonoured cheques. In terms of the settlement agreement, respondent 2 was to withdraw all complaints under the NI Act, which were pending against the petitioner and related parties. Following the settlement, the respondent appeared before the Mediation Centre on 16-05-2016 and stated that the matter had been amicably settled and he did not wish to pursue the matter anymore, to which he would make a statement before the Trial Court.
When the matter came up before the Trial Court, a joint request was made by parties seeking time to place on record the settlement deed. Thereafter, on when the matter came up for hearing, the Trial Court was informed by the respondent that settlement was still underway and that only a part of the settlement amount had been paid by the petitioner, and remaining amount was yet to be paid. The matter was put up for consideration of the settlement agreement, whereby both parties were heard, and the Trial Court passed the impugned order.
In the impugned order, the Trial Court held that the matter was at the initial stages of framing of notice under Section 251 of the CrPC, and directed that the trial should be proceeded with, to test the veracity of the settlement agreement.
The contention of the petitioner was that the Trial Court had erred in proceeding with the trial of cases in view of the settlement agreement, the settlement amount paid by the petitioner and also the statement made by the respondent before the Mediation Centre that the case would be withdrawn.
The respondent on the other hand contended that the impugned order did not warrant any interference as the Trial Court had only ordered the framing of notice as per Section 251 of the CrPC. Respondent 2 further submitted that even though it is not disputed than a settlement amount to the tune of Rs. 30,00,000/- had been received by him, the settlement agreement was only a draft, therefore, not binding before the Court.
Decision and Analysis
Upon hearing the parties, the Court noted that the Mediation Report categorically stated that respondent 2 had amicably settled the matters, agreed to withdraw the complaints and to make necessary statement before the Trial Court. Further, the proceedings showed that the statement was made on its own free will and without any force, pressure or coercion.
The Court further noted that the argument by the respondent that the settlement agreement was a draft and thereby not binding, was an afterthought. The Court observed held that the contention that statement was not recorded before the Court was meritless as the recording before the Mediator that parties had settled the disputes was duly signed not only by the partis themselves, but also their respective counsels.
The Court noted that once it is an admitted position that an agreement was signed by parties and the payment in terms of the settlement had already been paid by the petitioner, respondent 2 could not be allowed to wriggle away.
The Court observed that it was apparent from the Trial Court and mediation records that the parties had settled their disputes back in 2016 and the respondent had also accepted money from petitioner, therefore, continuation of proceedings under the NI Act would be an abuse of the process of the Court.
The Court said that the respondent after having accepted the money, was trying to reagitate the proceedings and had managed to keep the proceedings alive since 2016, contributing to the already heavy docket of the Courts to the detriment of other litigants.
The Court observed that it was empowered to exercise is right under Section 482 of the CrPC to look into the record and pass such order as necessary to prevent abuse of the process of the Court.
In the given circumstances, the Court allowed the petition, quashed the criminal complaints and directed the respondent to pay Rs. 50,000/- as cost to the petitioner within a period of four week.
[Ashok Kumar v. State (NCT of Delhi), 2024 SCC OnLine Del 4477, decided on 01-07-2024]
Advocates who appeared in this case :
Advocates for the Petitioner: Adit S. Pujari, Shaurya Mittal, Pallavi Chatterjee, Advocates
Advocates for the Respondents: Utkarsh, APP; Tanuj Khurana, Abhishek Rawat, Advocates
Buy Code of Criminal Procedure, 1973 HERE
