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A.S. Pharma Pvt. Ltd. vs. Nayati Medical Pvt. Ltd. & Ors.

Not available · 2024 INSC 690Decided 23 Jul 2024
Not available
Justice C.T. Ravikumar · Justice Sanjay Karol

Background

A.S. Pharma had filed a cheque-dishonour complaint against Nayati Medical under Section 138 of the Negotiable Instruments Act. After summons were issued, the accused expressed willingness to settle by paying the amount, and applied to compound the offence, but the trial court dismissed that application. The Delhi High Court then used its inherent powers under Section 482 CrPC read with Section 147 of the NI Act to quash the complaint and treat the offence as compounded, subject to the accused depositing money: a decision A.S. Pharma, the original complainant, challenged before the Supreme Court.

Decision Breakdown

The Supreme Court upheld the High Court's approach, invoking its own power under Article 142 of the Constitution to do complete justice between the parties. It quashed the complaint case and all resulting proceedings, directing that the complainant could withdraw the amount already deposited (Rs. 6.5 lakh plus 12% annual interest) along with an additional Rs. 1 lakh paid by the accused. The Court clarified its observations were confined to deciding this specific appeal and would not be treated as binding precedent beyond these facts.

Lesson Learnt

In cheque-bounce disputes, courts favour genuine settlement between parties over rigid procedural technicalities. Once the accused makes the complainant financially whole (with interest), a criminal cheque-dishonour case can be compounded and closed even at a late stage, using the Supreme Court's special constitutional power to do complete justice.

Official source (sci.gov.in)View Judgment (PDF)

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