The Supreme Court of India on October 8, 2021 gave its verdict in the matter of, Messrs. Gimpex Private Limited v. Manoj Goel, [Criminal Appeal No. 1068 of 2021], setting aside the judgment of the single judge quashing the second complaint (CC No. 389/2017). The said order established that a complainant cannot seek two simultaneous prosecutions for the same underlying transaction under Section 138 of the Negotiable Instruments Act (“NI Act”).
In the present case, a series of cheques were dishonoured, prompting the filing of the first complaint under Section 138 of the NI Act. Following that, the parties entered into a deed of compromise to settle the case. While the first complaint was pending, the cheques provided in accordance with the compromise agreement were dishonoured, prompting the second complaint under Section 138 of the NI Act. Both proceedings were on-going at the same time.
Whether the complainant can be allowed to pursue both the on-going cases under Section 138 of the NI Act or whether one of them must be quashed?
Key Observations by the Court:
Decision by the Court:
The Supreme Court thus, held that, non-compliance with the conditions of the settlement agreement or dishonour of subsequent cheques, would give rise to a new cause of action imposing liability under Section 138 of the NI Act as well as other civil and criminal remedies. Therefore, a complainant cannot be allowed to pursue two proceedings one emanating from the original complaint and the other from the compromise agreement between the two.
Please find attached a copy of the judgment.
This update has been contributed by Harshita Jagwani (Senior Associate, Designate).
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