Cheque Dishonour, S.138 of Negotiable Instruments Act, 1881 and Violation of Compromised Settlement

Cheque Dishonour, S.138 of Negotiable Instruments Act, 1881 and Violation of Compromised Settlement

In order to understand issue of settlements in case under S.138 of Negotiable Instruments Act, 1881, one can refer Gimpex Pvt Ltd v Manoj Goel [2021] GCtR 2419 (SC) where it was observed as follows:  "When a complainant party enters into a compromise agreement with the accused, it may be for a multitude of reasons- Higher Compensation, faster recovery of money, uncertainty of trial and strength of complaint, among others. 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 voluntarily entered into such an agreement and agree to abide by the consequence 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……"