How to proceed in a complaint of 138 NI Act if there is a compromise between the parties

Cheque bounce cases are commonly filed as complaint cases under Section 138 and Section 142 of the NI Act. Other than registering a complaint case, the complainant also has the option of filing an FIR for cheating, forgery, etc. In this article, we will learn about our options on how to close a complaint case initiated under section 138 of NI Act when there is a settlement or comprise between the complainant (person who received the bounced cheque) and the accused (person who wrote the cheque).

A settlement or compromise in a cheque bounce case means that the person who wrote the cheque agrees to pay the money to the person who received it, even if the cheque was bounced. In return, the person who received the bounced cheque agrees not to pursue legal action against the person who wrote the cheque. Other than money, there can also be other arrangements that were agreed between the parties. The agreement is usually written down in a legal document that sets out the details of the agreement, and both the complainant and the accused are legally bound by the terms of the agreement.

When there is compromise or settlement reached between the parties, and the complainant has agreed to close the case, the best way to do is by asking the complainant to withdraw the complaint by filing an application under section 257 of CrPC. This section has been quoted below:

“If a complainant, at any time before a final order is passed in any case under this Chapter, satisfies the Magistrate that there are sufficient grounds for permitting him to withdraw his complaint against the accused, or if there be more than one accused, against all or any of them, the Magistrate may permit him to withdraw the same, and shall thereupon acquit the accused against whom the complaint is so withdrawn.”

As it is clear from the language of this section, it could be withdrawn only with the permission of the court, therefore the complainant has to justify the grounds to why it is withdrawing the complaint. The complainant has to do so by mentioning about the settlement in the application and also attaching the settlement agreement therewith.

Below is a list of documents that will be required to withdraw a complaint of 138 NI Act when a settlement or compromise is reached between the parties –

1. An Application u/s 257 CrPC by the Complainant – [Draft]

2. Affidavit supporting the application – [Draft]

3. Settlement Agreement – [Draft]

The complainant can withdraw such a complaint at any stage of the case before the final judgement is passed by the court. Alternatively, below are listed some less popular options to close such a complaint case -

1. When the compromise has been reached between the parties as soon as the complaint was filed and neither the complainant/witness have been examined by the magistrate nor the summons are issued to the accused. In such a scenario, on the date fixed for examination of complainant/witness, the complainant has to reveal about the compromise when it is examined by the court under sections 200/202 of CrPC. Thereafter based on the examination of the complainant/witness, the court would dismiss the complaint under section 203.

2. When the accused was summoned by the court, he appears in court and opposes the complaint. At this stage, the date is fixed for either complainant’s evidence or accused’s evidence under Section 254. So, on the fixed date, in the evidence it has to be mentioned that there is a settlement between the parties and the agreement of settlement should be attached with the evidence. The court will then acquit the accused based on the evidence presented by the complainant/accused.

In conclusion, settling a cheque bounce case through a compromise or settlement is a viable option for both the complainant and the accused. However, it is important to follow the legal procedures to properly close the complaint case. Withdrawing a complaint under Section 138 of the NI Act requires the complainant to file an application under Section 257 of CrPC and attach necessary documents such as an affidavit and settlement agreement. It is essential to mention the settlement in the application and justify the grounds for withdrawal. Alternatively, there are other options available such as revealing the compromise during examination under Sections 200/202 of CrPC or mentioning it during the evidence stage under Section 254. By following the proper legal procedures, a settlement can effectively close a cheque bounce case initiated under Section 138 of the NI Act.