SRI RAM CHAUDHARY vs The State of Bihar AND ANR

IN THE HIGH COURT OF JUDICATURE AT PATNA
CRIMINAL MISCELLANEOUS No.13616 of 2019
Arising Out of PS. Case No.-3145 Year-2017 Thana- SARAN COMPLAINT CASE District-
Saran
======================================================
Sri Ram Chaudhary Son of Rajendra Chaudhary Resident of Village -
Panditpur, PO and PS- Janta Bazaar, District - Saran.
... ... Petitioner/s
Versus
1. The State of Bihar
2. Uma Kant Pandey Son of Late Dwarika Nath Pandey Resident of Village -
Panditpur, PO and P.S.- Janta Bazaar, District - Saran.
... ... Opposite Party/s
======================================================
Appearance :
For the Petitioner/s : Mr. Jeetendra Narayan, Adv
For the Opposite Party/s : Mr. Jharkhandi Upadhyay, APP
======================================================
CORAM: HONOURABLE MR. JUSTICE CHANDRA SHEKHAR JHA
ORAL JUDGMENT
Date : 07-09-2026
Heard the parties.
2. The present quashing petition has been preferred to
quash the order dated 05.11.2018 passed by learned Additional
Sessions Judge-VIII, Saran in Cr. Rev. No. 179/2018 arising out of
Complaint Case No. 3145/2017, where learned Revisional Court
dismissed the revision application and refused to interfere with the
order of cognizance order dated 16.05.2018 as passed by learned
ACJM-VIII, Saran, where cognizance was taken for the offence
punishable under Section 138 of the NI Act, 1881.
3. OP No. 2 joined the present court proceedings.
4. The allegation of the complainant, in brief, is that the
complainant and the petitioner are residents of the same village. It is
alleged that on 11.10.2014, the petitioner requested financial

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assistance from the complainant for purchasing a Bolero Car,
whereupon the complainant, a retired Sub-Inspector, paid him Rs.
2.50 lakhs through Cheque No. 80858 for running his business.
Thereafter, on 15.10.2014, the complainant allegedly paid a further
sum of Rs. 1.50 lakhs in cash, and on 03.12.2014, he paid another Rs.
4 lakhs through Cheque No. 654281. It is further alleged that, earlier,
on 20.08.2013, the petitioner had also taken Rs. 50,000/- from the
complainant's son. Subsequently, towards repayment of the aforesaid
amount, the petitioner allegedly issued a cheque for Rs. 8.75 lakhs on
27.07.2017, which was dishonoured upon presentation. The said
cheque was again deposited on 04.08.2017, but was returned unpaid
and received back by the complainant on 30.08.2017. Thereafter, on
15.09.2017, the complainant, through his advocate, issued a legal
notice to the petitioner, to which the petitioner allegedly failed to
respond. Hence, the present complaint case.
5. Learned counsel appearing on behalf of the
petitioner submits that during the pendency of the present
proceeding, the dispute between the petitioner and OP No. 2 has been
amicably settled through the intervention of the Patna High Court
Mediation Centre. It is submitted that the parties entered into a
Memorandum of Agreement dated 23.11.2023 in Mediation
Proceeding No. 615 of 2023, arising out of the present case.
6. Learned counsel further submits that as per the terms
of settlement, the petitioner agreed to pay a sum of Rs.4,00,000/-

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(Rupees Four Lakhs) to opposite party no.2 towards full and final
settlement of the dispute. It is submitted that an amount of
Rs.50,000/- was handed over to opposite party no.2 by way of
Demand Draft No.000853 dated 23.11.2023 issued by HDFC Bank
and the remaining amount was thereafter paid in terms of the
settlement.
7. Learned counsel submits that pursuant to the
aforesaid settlement, further amount were paid/deposited by the
petitioner towards satisfaction of the agreed settlement amount. It is
submitted that, as stated in the supplementary affidavit filed on
behalf of the petitioner, an amount of Rs.68,000/- was paid through
bank transactions and an amount of Rs.2,83,206/- was adjusted
towards the value of building materials purchased by opposite party
no.2 from the establishment of the petitioner, thereby making the
total amount of Rs.4,01,206/- realized by opposite party no.2.
8. Learned counsel, accordingly, submits that the terms
and conditions of the Memorandum of Agreement have been fulfilled
and no dispute now survives between the parties. It is further
submitted that the settlement was arrived voluntarily before the
Mediation Centre and same was signed by both the parties as well as
their respective learned counsels.
9. Learned APP appearing on behalf of the State and
learned counsel appearing on behalf of opposite party no.2 do not
dispute the factum of settlement arrived at between the parties before

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the Patna High Court Mediation Centre. Learned counsel for opposite
party no.2 also does not dispute the receipt/realization of the agreed
settlement amount and also by OP No. 2, who is present before the
court in person and submits that, in view of the settlement, no dispute
remains between the parties.
10. It would be apposite to reproduce the settlement
terms of Mediation Centre, Patna High Court, which is as under:-
*

Patna High Court Mediation Centre
Memorandum of Agreement
Mediation Proceeding No.615 of 2023
[Arising out of Cr. Misc. No.13616 of 2019]
An agreement made on 23.11.2023 at the High Court Patna Mediation Centre,
between, Sri Ram Chaudhary, Son of Rajendra Chaudhary, resident of Village-
Panditpur, P.O. and P.S.-Janta Bazaar, District-Saran
…..Petitioner (First party).
And
Uma Kant Pandey, Son of Late Dwarika Nath Pandey, resident of Village-
Pandipur, P.O. and P.S.-Janta Bazaar, District-Saran.
……….. Opposite Party No.2 (Second party).
Both the parties appeared in the Mediation Proceeding along with their Advocates
and are ready to resolve the dispute through the Mediation Proceeding on the
following terms and conditions:-
1. That after great persuasion, both the parties agreed to settle the dispute and
for this the petitioner offered to pay Rs.4,00,000/-(Rupees Four Lakhs Only) as
full and final settlement amount to the Opposite party No.2 (Uma Kant Pandey)
and the Opposite party No.2 accepted the offer and gave his consent.
2. That both the parties agreed that the aforesaid amount shall be paid within a
year i.e. from 23.11.2023. The petitioner is handed over Rs.50,000/-(Rupees
Fifty Thousand) by way of bank Draft No.000853, dated 23.11.2023 issued by
HDFC Bank as first instalment.
3. That rest of amount i.e. Rs.3,50,000/-(Rupees Three Lakhs Fifty Thousand),
the petitioner shall paid the said amount within one year in twelve instalment
from today.

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4. That the opposite party No.2 agreed on this payment and this settlement shall
be full and final settlement and no party shall claim in future against each other,
in any manner.
5. That both the parties agreed that any case filed against each other shall be
withdrawn after making full and final payment of Rs.4,00,000 (Rupees Four
Lakhs).
6. That the above contents of the agreement have been read over and explained
to us in Hindi which we have fully understood and accepted there upon.
7. That in the above terms and conditions a settlement has been arrived at
between the parties and both have signed in presence of their learned counsels,
who have also put their signature on this agreement.
*
11. From the aforesaid terms of settlement, it is evident
that the parties, with the intervention of the Patna High Court
Mediation Centre, have voluntarily arrived at an amicable settlement
and have agreed to treat the agreed payment of Rs.4,00,000/- as full
and final settlement of their dispute. The settlement further specifically
records that after making the full and final payment, the cases filed by
the parties against each other would be withdrawn.
12. The supplementary affidavit filed on behalf of the
petitioner further discloses that pursuant to the aforesaid Memorandum
of Agreement, the amount agreed between the parties has been realized
by opposite party no.2. The materials placed on record disclose
payment of Rs.50,000/- through Demand Draft, further payment of
Rs.68,000/- through bank transactions and an amount of Rs.2,83,206/-
towards the value of materials purchased by opposite party no.2 from
the establishment of the petitioner, making a total realization of
Rs.4,01,206/-.
13. It is well settled that an offence punishable under

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Section 138 of the Negotiable Instruments Act is compoundable in
view of the specific provision contained under Section 147 of the
Negotiable Instruments Act. The object underlying the provision
relating to dishonor of cheque is primarily compensatory in nature, and
where the parties have voluntarily settled the dispute and the agreed
amount has been paid, continuation of the criminal proceeding would
not advance the cause of justice.
14. The inherent jurisdiction of this Court under Section
482 of the Code of Criminal Procedure is intended to secure the ends
of justice and to prevent abuse of the process of the Court. The power
is required to be exercised having regard to the facts and circumstances
of each case. Where the dispute arising out of a cheque transaction has
subsequently been amicably settled between the complainant and the
accused and the settlement has been acted upon, the continuation of the
criminal proceeding, particularly when the complainant no longer
wishes to pursue the matter, would serve no useful purpose.
15. In the present case, the dispute between the
petitioner and opposite party no.2 has been settled before the
Mediation Centre of this Court. The terms of settlement were
consciously accepted and signed by both the parties in the presence of
their respective learned counsels. The agreed settlement amount has
also been realized by opposite party no.2. Thus, the condition
incorporated in the Memorandum of Agreement for making the full
and final payment has already been fulfilled.

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16. In view of aforesaid factual and legal discussions, as
the matter has been amicably settled in the mediation proceeding
between the parties and the settlement conditions have been acted
upon, continuing with the criminal proceeding would only amount to
abuse of the process of law. In the peculiar facts and circumstances of
the present case, this Court is of the considered view that the impugned
order as well as the consequential criminal proceeding deserves to be
interfered with in exercise of its inherent jurisdiction under Section
482 of the Code of Criminal Procedure.
17. Accordingly, the impugned order dated 05.11.2018
as passed by learned Additional Sessions Judge-VIII, Saran in
Criminal Revision No.179/2018, arising out of Complaint Case
No.3145/2017, Trial No. 986 of 2018, as well as the order of
cognizance dated 16.05.2018 passed by learned A.C.J.M.-VIII, Saran
along with all its consequential proceedings against this petitioner, are
hereby quashed and set aside.
18. Hence, this application stands allowed.
19. TCR (Trial Court Records), if any, be returned to the
learned Trial Court alongwith the copy of this judgment.

(Chandra Shekhar Jha, J.)
S.Tripathi/-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 07.09.2026
Transmission Date 07.09.2026