M/S Moser Baer Photo Voltaic Ltd. Vs. M/S Photon Energy Systems Ltd.& Ors, on 18th March, 2016, Supreme Court of India: Case Brief – Read Judgement

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Complaint of Dishonour of Cheque: Party arrived at settlement: Court directs, till the total amount at settlement, is paid, the complaint be kept in abeyance and soon it is paid, it should be deemed quashed
Criminal Appeal No. 235 of 2016
Bench: Justice Dipak Misra; Justice Shiva Kirti Singh

Case Brief: In the present case an appeal in the criminal complaint case was preferred against the order directing quashing of the complaint under Negotiable Instrument Act, 1881. In the facts of the case, Appellant being the company has made supplies to the respondent no. 1. And respondent no. 2 to 6 were the Chief Executive Officer, General Manager (Finance), Ex- Chief Executive Officer, Chairman and Managing Director, respectively of Respondent no. 1. As per appellant’s case, the respondent no. 1 had issued a cheque against larger outstanding dues for Rs. 3,21,53,903. However, as per request, that there is shortage in fund, the cheque was remained un-presented immediately. The existing disputes between both parties were settled by the month of September, 2008, then the net payable amount was decided at Rs. 2,87,09,640. Moreover, later the cheque was presented with the bankers, however, it was returned with the remark as “funds insufficient”. Then appellant sent legal notice with demand of only settled amount as shown above, and in response, the respondent no. 1 paid an amount of 20 lakhs of rupees towards its debt liability, and also it was seen that Respondent no. 1 denied its balance liability. In defence it was shown that the cheque was issued to larger amount by way of security and it was not for any payable debt. However, disagreeing to this Appellant file complaint under Negotiable Instrument Act, 1881, however, respondents- accused(s) brought petition under section 482 of the Code of Criminal Procedure, 1973 which was allowed by the Court under appeal, and as a result the criminal complaint under Negotiable Instrument Act, 1881 was dismissed on the base that the cheque amount was different from the legally enforceable debt. Now, the order in the petition section 482 of the Code was in challenge. The bench, as such sought to decided the question “whether in the view of payments or settlements made after the issuance of the cheque, a complainant can disclose the true state of affairs and issue a demand for a lesser amount” and also “whether in such circumstances the criminal prosecution for dishonour of cheque for higher amount is legally sustainable or not”. However, before the court could have decided these questions, the parties have entered into an amicable settlement and thus, they decided to treat the total outstanding amount at Rs. 1,80,00,000 and the same would be paid by the respondents to the appellant in the regular installments of Rs. 15,00,000. Thus, court directed to the effect that when the total settled amount will be paid by the respondents then complaint in question will be deemed quashed and till then the complaint case is to be remained in abeyance.

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M/S Moser Baer Photo Voltaic Ltd. Vs. M/S Photon Energy Systems Ltd.& Ors. on 18th March, 2016 – Supreme Court of India Judgement

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