Supreme Court approves consensual settlement, directs partial release of deposited funds and installment payment while preserving arbitration rights

A bench of Justice Dipankar Dutta and Justice Manmohan heard a Special Leave Petition filed by the complainant challenging a High Court judgment that had set aside convictions under Section 138 of the Negotiable Instruments Act. The appeal arose from criminal proceedings in which the High Court of Karnataka at Bengaluru had quashed the conviction and sentence of the accused-respondents; the Supreme Court was asked to examine the revision but disposed the petition by consent.

The Court recorded the parties' agreed terms and directed their implementation. It ordered that "20% of the amount deposited by the Respondents with the learned Additional Sessions Court along with accrued interest, if any, shall be released to the Petitioner forthwith" and that "an amount of Rs.9.50 lakhs shall be paid in 6 (six) equated bimonthly (every two months) installments by demand draft/RTGS mode by the Respondents to the Petitioner." The Court emphasised that the payments were to be made "without prejudice to the rights and contentions of the parties in the pending arbitration proceedings." The Court, in its reasoning, observed: "This Court is of the view that the aforesaid consensual terms are fair and reasonable. Accordingly, the Special Leave Petition is disposed of in the aforesaid terms. It is clarified that the present order shall have no impact/effect on the arbitration proceedings that are pending between the parties."

Background The dispute originated from a complaint under Section 138 of the Negotiable Instruments Act concerning bounced cheques. The Additional Sessions Court and the learned Metropolitan Magistrate had convicted the accused-respondents; the High Court, in Criminal Revision No.1169 of 2012, set aside those convictions by its judgment and final order dated 22 July 2021. The complainant filed the present Special Leave Petition (Criminal) No.4017 of 2022 before the Supreme Court challenging the High Court's order. During proceedings before the Supreme Court, counsel for both sides submitted a consensual proposal for settlement of monetary claims, which the Court found to be "fair and reasonable" and therefore accepted.

The agreed terms comprised an immediate release of 20% of funds already deposited in the trial court (with accrued interest, if any) in favour of the petitioner, and payment of Rs.9.50 lakhs in six equated bimonthly instalments by demand draft or RTGS. The Supreme Court disposed of the SLP by recording these terms and clarified that its order would have no effect on the pending arbitration between the parties, thereby preserving the parties' rights in that forum. No other alteration to the High Court's reasoning was made; the petition was disposed on the basis of the settlement reached before this Court.

Case Details: Case No.: SPECIAL LEAVE PETITION (CRL.) No.4017 of 2022 (Citation: 2025 INSC 522) Case Title: VINOD BOOB v. DODBALLAUR SPINNING MILLS PVT. LTD. & ANR. Appearances: For the Petitioner(s): Counsel not indicated in the order For the Respondent(s): Counsel not indicated in the order