Dishonour of Cheque--Compromise Decree in Civil Suit--Non-Compliance with Settlement Terms Does Not Extinguish Criminal Prosecution Under Section 138 NI Act
A compromise decree passed in a civil suit does not automatically extinguish criminal liability under Section 138 of the Negotiable Instruments Act. The offence under Section 138 is complete upon failure of the drawer to make payment within the statutory period after receipt of the demand notice. Where the settlement agreement itself conditions withdrawal of the criminal complaint upon fulfilment of specified terms, non-compliance keeps the prosecution alive. Further, a mediation settlement recorded by a civil court does not carry the effect of an award under the Legal Services Authorities Act, 1987, and cannot be pressed into service to quash criminal proceedings under Section 528 of the Bharatiya Nagarik Suraksha Sanhita.
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