Anil Sayal vs Apace Transco Pvt. Ltd. & Ors.

IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 07.02.2026
Judgment pronouncedon:01.07.2026
+ CRL.M.C. 1016/2020 & CRL.M.A. 4079/2020
ANIL SAYAL .....Petitioner
versus
APACE TRANSCO PVT. LTD. & ORS. ..... Respondents
+ CRL.M.C. 1019/2020
M/S FLYWHEEL LOGISTICS PVT. LTD. .....Petitioner
versus
APACE TRANSCO PVT. LTD. & ORS. ..... Respondents
+ CRL.M.C. 5307/2022 & CRL.M.A. 21118/2022
LUV BHARDWAJ .....Petitioner
versus
M/S APACE TRANSCO PVT. LTD.
& ORS. ..... Respondents
Advocates who appeared in this case:
For the Petitioner : Mr. Namit Suri and Ms. Tanya Sharma,
Advs. in CRL.M.C. 1016/2020 & CRL.M.C.
1019/2020
Mr. Sameer Rohtagi, Adv. in CRL.M.C.
5307/2022
Signature Not Verified
Signed By:HARMINDER
KAUR
Signing Date:01.07.2026
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For the Respondent : Mr. Kartik Vashisht, Adv. for R-1 and R-2
CORAM
HON’BLE MR JUSTICE AMIT MAHAJAN
JUDGMENT
1. Through the present petitions, the petitioners essentially seek
quashing of proceedings emanating from CC No. 2302/2017, which
was filed by Respondent Nos. 1 and 2 against the petitioners for
offence under Section 138 of the Negotiable Instruments Act, 1881
(‘ NI Act ’). Further, the following orders have also been challenged:
i. order dated 29.11.2018 passed in the said proceedings,
whereby notice under Section 251 of the Code of Criminal
Procedure, 1973 (‘ CrPC ’) was framed;
ii. order dated 30.11.2019 passed in the said proceedings,
whereby the learned Trial Court closed the right of the
petitioner M/s. Flywheel Logistics Pvt. Ltd. to cross examine
the complainant witness;
iii. order dated 31.01.2020 passed in the said proceedings,
whereby the statement of the petitioner Anil Sayal was
recorded under Section 281(1) read with Section 313 of the
CrPC.
Signature Not Verified
Signed By:HARMINDER
KAUR
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2. Shorn of unnecessary details, the brief facts of the case are as
under:
2.1. The present dispute essentially relates to the subject complaint
which was filed by Respondent Nos.1 and 2 against the petitioners for
the offence under Section 138 of the NI Act. Respondent No.1/
complainant company is involved in business of international freight
forwarders, transporters and logistics solution providers, and
Respondent No.2 is the director of Respondent No.1. The petitioner
M/s. Flywheel Logistics Pvt. Ltd. is Accused No.1 in the complaint,
which was availing the service of the complainant company, and the
other two petitioners were the directors of the accused company.
Prior to filing of complaint
2.2. As certain payments were due from the accused persons on
account of various services taken by them from the complainant
company/ Respondent No.1, Respondent No.2 (director of
complainant company) and another director of the complainant
company called upon the petitioner Anil to arrange the required sum.
st
2.3. 1 Settlement : After lot of discussion, a Memorandum of
Understanding (‘ MOU ’) dated 25.02.2017 was entered into between
the two companies. In terms of the said MOU, three post dated
cheques were issued on behalf of the accused company.
nd
2.4. 2 Settlement : On the alleged request of the accused Anil and
Luv, another MOU dated 15.06.2017 in furtherance and continuation
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KAUR
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of the previous MOU was entered into between the parties and the
date of payment of previous due amount was extended from
15.06.2017 to 10.07.2017. Three fresh cheques were issued for
balance on that date, that is, ₹2,97,49,240/-, in favour of the
complainant company by the accused Anil on behalf of the accused
company in purported consultation with the accused Luv, and the
previous cheques were returned. The said MOU provided that if the
accused company failed to procure or issue a Letter of Credit in favour
of the complainant company for the outstanding amount, it would be
entitled to present the cheques issued under the said MOU.
Dishonour of impugned cheques and filing of subject complaint
2.5. As the accused failed to act in accordance with MOU dated
15.06.2017, the impugned cheques were presented for encashment on
08.08.2017. The same were returned unpaid by the bank with the
reason- ‘ Kindly Contact Drawer/ Drawee bank and please present
again ’.
2.6. Some emails were exchanged between the complainant
company and the petitioner Anil where he apparently apologised for
dishonour of cheques and informed the complainant company that he
was in the process of arranging funds and requested time till end of
August, 2017 to clear the outstanding amount. There is no mention of
the said emails in the complaint.
Signature Not Verified
Signed By:HARMINDER
KAUR
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2.7. In the end of August, 2017, the petitioner Anil requested the
complainant company to wait for some more time and to present the
cheques in the first week of September. There is no mention of this
call in the complaint either.
2.8. On 06.09.2017, the impugned cheques were presented again,
however, they were again dishonoured on presentation. Thereafter, a
statutory legal notice dated 29.09.2017 was sent under the provisions
of the NI Act. Subsequently, on 08.11.2017, the subject complaint was
filed.
After filing of complaint
rd
2.9. 3 Settlement : On 01.05.2018, the complainant company and
the accused company entered into consent terms wherein liability of
the accused company was admitted to be ₹3,36,16,641.20 (including
interest). It was agreed that the consent terms shall remain valid for a
period of 53 days from the date of execution (that is, 01.05.2018) till
23.06.2018.
The terms indicate that the parties agreed that the proceedings
under NI Act were to be put on hold after briefing the Court about the
settlement and ensuing negotiations. The liability of the accused
company to the tune of the consent admitted liability (that is,
₹3,36,16,641.20) stood transferred to the books of M/s. Flywheel
Logistics Solutions Private Limited (‘ FLSPL ’), which is a sister
concern of the accused company. It was agreed that the right of the
Signature Not Verified
Signed By:HARMINDER
KAUR
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complainant company against the accused company was not
extinguished and in the event of default, the complainant company
would have all the legal rights to claim the aforesaid amount from the
accused company.
It was also agreed that the complainant company shall have all
rights to initiate proceedings against FLSPL for the claim in the event
of default. Seven security cheques aggregating to a sum of
₹3,36,16,641.20 were handed over under the said consent terms, and it
was agreed that the same will be payable on 23.06.2018.
2.10. The complainant company withdrew its claim against the
accused company in the proceedings before NCLT on 10.05.2018, and
on 30.05.2018, the learned Trial Court was informed of the settlement
between the parties for the first time.
2.11. On 27.06.2018, the complainant company issued a demand
notice under Section 8 of the Insolvency and Bankruptcy Code, 2016
against FLSPL, however, by way of notice of dispute dated
06.07.2018, the claim was contested on the ground that the
complainant company was not an operational creditor as it had never
provided any services to FLSPL. Association with the accused
company was also denied and it was contested that the consent terms
had been executed under duress and coercion.
2.12. In the intervening period, the matter was adjourned on a number
of occasions for the purpose of verification of settlement.
Signature Not Verified
Signed By:HARMINDER
KAUR
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th
2.13. 4 Settlement : The complainant company and FLSPL entered
into another consent terms dated 03.08.2018. Thereunder, it was
agreed that the terms shall remain valid till 10.09.2018, that is, the
date of execution.
The liability of ₹3,36,16,641.20 was admitted in the said
consent terms by FLSPL and it was agreed that all the legal rights of
the complainant company were “ temporarily suspended ” during
subsistence of the said terms subject to action already taken under
Section 138 of the NI Act by the complainant company.
Seven new security cheques were also issued under the consent
terms and it was agreed that in the event of default, the complainant
company was to have absolute discretion and right to pursue all
remedies available to them.
2.14. Admittedly, the cheques handed under the consent terms dated
03.08.2018 were never presented for encashment.
2.15. On 04.08.2018, the learned Trial Court was informed about the
settlement. Statement of the accused Anil was recorded where he
asserted that the settlement amount would be paid by FLSPL. The
matter was adjourned for verification of payment, and thereafter,
multiple adjournments were granted as more time was sought to make
payment.
2.16. In the order dated 29.11.2018, in the presence of the accused
Luv and Anil, their counsel submitted before Court that payment
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Signed By:HARMINDER
KAUR
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could not be made and the matter may be proceeded further. Notice
under Section 251 of the CrPC was directed to be served upon the
accused. The said order is impugned by the accused Luv and Anil.
2.17. Order dated 30.11.2019 is impugned by the accused company as
its right to cross-examine the complainant witness was closed therein.
2.18. Essentially aggrieved by the continuation of the proceedings
emanating from the subject complaint and the aforesaid orders
respectively, the petitioner accused preferred their separate petitions.
Submissions
3. The learned counsel for the petitioners submitted that the
dispute between the petitioners as well as Respondent No. 1 has
amicably been settled, and consequently the complaint stood
compounded. They submitted that on 03.08.2018, Respondent No. 1
and FLSPL entered into consent terms vide which FLSPL agreed to
settle Respondent No. 1’s claim from the accused company thereby
acquiring liability on itself.
4. They submitted that the Consent terms settlement agreement
was duly filed by Respondent No. 1 with the learned Trial Court on
04.08.2018 and consequently there was no occasion to continue the
complaint case bearing CC No. 2302/2017 (renumbered as CT. No.
7269/2019) against the petitioners. They relied upon the judgment
passed by the Hon’ble Apex Court in the case of Gimpex Pvt. Ltd. v.
Manoj Goel : 2021 SCC OnLine SC 925 and argued that once the
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Signed By:HARMINDER
KAUR
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compromise deed is agreed upon, the original complaint is liable to be
quashed and the parties must proceed with the remedies available in
law under the settlement agreement. They consequently submitted that
after recording the settlement and compounding the same vide order
dated 04.08.2018, the learned Trial Court became functus officio to
continue with the original complaint filed by Respondent No. 1 prior
to entering into the Settlement Agreement and unequivocally agreeing
to transfer the debts of the accused company as the said original
complaint could not have been sustained pursuant to the settlement
between the parties. Reliance is also placed on the judgment in Vinod
Bansal v. Intec Capital Ltd. :2024 SCC OnLine Del 3245 .
5. They submitted that on 01.05.2018, settlement consent terms
were executed between both the parties and the acquiring party which
issued cheque to settle the claim of Respondent No.1. They submitted
that the same was further recorded in a subsequent consent term
signed bilaterally by FLSPL on 03.08.2018 and the same was also
backed by cheques from FLSPL. They submitted that despite the same
Respondent No. 1 chose not to present the above cheques. They
further submitted that the Settlement consent terms signed between the
FLSPL and Respondent No.1 specifically provides for remedies
available to Respondent No. 1, however, the same has never been
pursued.
6. They submitted that none of the settlement agreements – dated
01.05.2018 and 03.08.2018 have been revoked till date by any of the
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KAUR
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parties. They submitted that Respondent No. 1 even categorically
accepted the settlement and even withdrew its claim against the
accused company filed before NCLT and the same was also recorded
in the order dated 10.05.2018 passed by NCLT.
7. They further submitted that the accused company was admitted
into CIRP vide order dated 15.01.2020 and was then ordered into
liquidation vide order dated 22.03.2021 by the NCLT and was finally
dissolved by order dated 11.11.2022 by the NCLT. They submitted
that the entire process took approximately 3 years and yet during the
entire course of time, Respondent No.1 never filed a claim with the
Interim Resolution Professional/Resolution Professional or the
Liquidator of the accused company thereby admitting that it had no
claim from the accused company.
8. They submitted that Respondent No. 1, by agreement and
conduct had accepted FLSPL as its debtor in line with the terms of the
settlement agreement dated 03.08.2018. They submitted that at first
Respondent No. 1 issued a demand notice to FLSPL under Section 8
of the Insolvency and Bankruptcy Code claiming to be the Operational
Creditor of FLSPL. They submitted that Respondent No. 1 did not
revoke the last settlement dated 03.08.2018 and pursued its remedy
against FLSPL before NCLT on the basis of the last settlement dated
03.08.2018. They consequently submitted that there existed no
liability of the petitioners or the accused company since the same had
already been taken over by FLSPL by entering into agreement and
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KAUR
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issuing fresh cheques. They submitted that the same is evident from
demand notice dated 12.12.2018 and the petition under Section 9 of
the IBC as well as order dated 01.02.2019 passed by the NCLT in
claim filed by Respondent No. 1 against FLSPL.
9. They further submitted that FLSPL was incidentally admitted
for CIRP on a claim made by another Operational Creditor (M/s
Kapoor Logistics) vide order dated 02.09.2019 and submitted that
Respondent No. 1 also duly filed their claim dated 21.09.2019 as
Operational Creditor with Mr. Suresh Goyal the Interim Resolution
Professional appointed by NCLT.
10. The learned counsel for Respondent Nos. 1 and 2 vehemently
contested the submissions made on behalf of the petitioners. He
submitted that no payment whatsoever was received towards the
outstanding liability and the offence under NI Act stood completed on
the date when the accused failed to honour the subject cheques.
11. He submitted that the matter involves disputed questions of fact
as the issue is in relation to interpretation of the consent terms, which
is a matter to be adjudicated during course of trial. He submitted that
such issues fall outside the scope of inherent jurisdiction of this Court.
12. He submitted that the decision in Gimpex Pvt. Ltd. v. Manoj
Goel ( supra ) is not applicable to the facts of the present case as unlike
the dispute herein, that matter involved parallel prosecutions where the
second set of complaints arose from a compromise that was effected to
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Signed By:HARMINDER
KAUR
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resolve the first set of complaints. He submitted that in this case, the
complaint under NI Act was kept in abeyance as per the consent terms
between the parties and the consent terms provide for a specific clause
stating that all legal rights were to remain temporarily suspended.
13. He submitted that the matter is at the stage of defence evidence
and prosecution was launched only on the basis of initial cheques
which render this case materially different from Gimpex Pvt. Ltd. v.
Manoj Goel ( supra ). He submitted that the accused persons had
requested the complainant company to not present the cheques under
the consent terms for encashment, however, thereafter, they appeared
before the Magistrate and claimed trial ensuring that the said cheques
(issued under consent terms) became stale.
14. He further submitted that as the cheques issued under the
consent terms dated 01.05.2018 and 03.08.2018 were never deposited
by the complainant company, no fresh cause of action ever arose
under the settlement cheques and the consent terms expressly
preserved the NI Act proceedings.
15. He submitted that the subject complaint in the present case was
neither compounded nor withdrawn. Reliance was placed on the case
of Dayawati v. Yogesh Kumar Gosain : (2017) SCC OnLine
Del11032 , where another Bench of this Court had opined that
complaints under Section 138 of the NI Act are
withdrawn/compounded only after receipt of the entire settlement
amount. He submitted that while the settlement was brought to the
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notice of the Trial Court and multiple adjournments were sought on
pretext of delayed payments, however, the trial court record indicates
that no payment was ever made, which led to issuance of notice under
Section 251 of the CrPC.
ANALYSIS
16. At the outset, it is relevant to note that this Court can quash
complaints under the NI Act at the pre-trial stage in the exercise of its
inherent jurisdiction under Section 482 of the CrPC if such
unimpeachable material is brought forth by the accused persons which
indicates that they were not concerned with the issuance of the
cheques or that no offence is made out from the admitted facts. The
Hon’ble Apex Court in the case of Rathish Babu Unnikrishnan v.
State (NCT of Delhi) : 2022 SCC OnLine SC 513 had discussed the
scope of interference by the High Court against the issuance of
process under the NI Act as under:
“8. The issue to be answered here is whether summons and
trial notice should have been quashed on the basis of factual
defences. The corollary therefrom is what should be the
responsibility of the quashing Court and whether it must
weigh the evidence presented by the parties, at a pre-trial
stage.
xxx
16. The proposition of law as set out above makes it
abundantly clear that the Court should be slow to grant the
relief of quashing a complaint at a pre-trial stage, when the
factual controversy is in the realm of possibility particularly
because of the legal presumption, as in this matter. What is
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also of note is that the factual defence without having to
adduce any evidence need to be of an unimpeachable
quality, so as to altogether disprove the allegations made in
the complaint.
17. The consequences of scuttling the criminal process at a
pretrial stage can be grave and irreparable. Quashing
proceedings at preliminary stages will result in finality
without the parties having had an opportunity to adduce
evidence and the consequence then is that the proper forum
i.e., the trial Court is ousted from weighing the material
evidence. If this is allowed, the accused may be given an un-
merited advantage in the criminal process. Also because of
the legal presumption, when the cheque and the signature are
not disputed by the appellant, the balance of convenience at
this stage is in favour of the complainant/prosecution, as the
accused will have due opportunity to adduce defence evidence
during the trial, to rebut the presumption.
18. Situated thus, to non-suit the complainant, at the stage of
the summoning order, when the factual controversy is yet to
be canvassed and considered by the trial court will not in our
opinion be judicious. Based upon a prima facie impression,
an element of criminality cannot entirely be ruled out here
subject to the determination by the trial Court. Therefore,
when the proceedings are at a nascent stage, scuttling of the
criminal process is not merited.”
(emphasis supplied)
17. In line with the dictum of the Hon’ble Apex Court in Rathish
Babu Unnikrishnan v. State (NCT of Delhi) (supra) , while exercising
the power under Section 482 of the CrPC to quash a complaint at the
pre-trial stage, it is pertinent for this Court to examine whether the
factual defence is of such impeachable nature that the entire
allegations made in the complaint is disproved.
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KAUR
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18. In the present case, the petitioner accused have not sought
quashing of the complaint by disputing that ex facie no case is made
out against them from the complaint, but rather, they have asserted
that quashing of the subject complaint is merited on the basis of the
consent terms dated 01.05.2018 and 03.08.2018. It is their case that
the debt was transferred to a sister concern of the accused company
and having entered into settlements qua the liability, it was not open to
the complainant to continue with the original complaint under Section
138 of the NI Act.
19. Before this Court can proceed to examine the merits of the said
contentions, it is thus imperative to take note of the relevant excerpts
of the consent terms.
20. The relevant portion of the consent terms dated 01.05.2018 are
as under:
“3)….That, this consent terms are valid for a period of 53 days
from the date of execution i.e. from 01.05.2018 to till 23.06.2018
(the aforesaid shall hereinafter for the sake of brevity be referred
to as "moratorium period"), and all the legal rights and remedies
available to parties including but not limited to enforcing any
security/ guarantee, criminal proceedings etc. for realization of the
amount due are temporary suspended subject to the action already
taken U/s 138 by the operational creditor.
* Operational creditor undertakes that all the proceedings U/s
138 of NI Act, 1881 already initiated, will be put on hold and
court be briefed about the settlement or negotiations are under
way.
xxx
UNDERSTANDING FOR CONSENT TERMS
9) That, there was a meeting held on 16.03.2018 between Sh Anil
Syal, CEO and Key managerial personnel and representing both
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KAUR
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corporate debtors and Sh Prakash Chand Sharma, representing
operational creditor along with Sh Harminder Singh, another
Director of operational creditor. Sh Anil Syal, has informed the
representatives of operational creditor that corporate debtors has
all the intentions to pay the admitted claim in a time bound
manner. Further, Sh Anil Syal has offered to operational creditor,
to transfer the liability of corporate debtor -1 to the tune of Rs.
3,36,16,641.20 in to the books of accounts of Corporate debtor-2
and total liability of operational creditor towards corporate
debtor-1 will be transferred in to the books of corporate debtor -
2….
xxx
14) That, corporate debtors, jointly and severally have offered to
settle the admitted outstanding due to the operational creditor,
and operational creditor has accepted in full and final settlement
of all its claims against corporate debtors.
(a) Corporate debtor -1 (M/s Flywheel Logistics Private Limited)
and corporate debtor-2 (Flywheel Logistics Solutions Private
Limited) viz shall totally, jointly and severally for and behalf of the
corporate debtors:
(i) Handover 7 (seven) post-dated cheques dated 23rd June 2018,
as - per Annexure-5 hereto totally aggregating to a sum of Rs.
3,36,16,641.20/- issued in favour of Apace Transco Private Limited
(operational creditor) on or before signing of the consent terms.
The said cheques will be dated and payable on 23rd June 2018 …
xxx
16. Event of default:
In the event of cheques as mentioned in Annexure-5 for a sum of
Rs. 3,36,16,641.20/- issued jointly and severally for and on behalf
of the corporate debtors and Mr. Anil Syal- Authorised
representative and Key managerial personnel and representing
both corporate debtors is returned un-paid for any reason
whatsoever - the same shall be considered as an "event of default"
and be deemed default committed jointly and severally by the
corporate debtors and Mr. Anil Syal- Authorised representative
and Key managerial personnel and representing both corporate
debtors
17. Legal Remedies
a) Notwithstanding anything contained in any law; in the event of
default i.e. in the event of return of cheque(s) mentioned in
Annexure-5 totalling Rs. 3,36,16,641.20/- as un-paid for any
reason whatsoever - the same shall, without any furtherance to
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KAUR
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parties, be considered as breach of the consent terms. Operational
creditor or its assigns shall in such event have the absolute right
and discretion to persue all such remedies available to operational
creditor or its assigns as under law including but not limited to
remedies for breach of the consent terms and/ or remedies under
the Insolvency and Bankruptcy code, 2016
It is agreed by and between the parties that in the event of default;
the operational creditor has all the legal rights to initiate the fresh
proceedings against M/s Flywheel Logistics Solutions Private
Limited (Corporate debtor-2) for total claim of Rs.
3,36,16,641.20/- along with further interest and/ or against the
Flywheel Logistics Solutions Private Limited (corporate debtor-1)
as corporate guarantor for the equivalent sum of money along with
further interest or balance of claim (net of recovery)
It is further agreed that total claim to be recovered from corporate
debtor -2 is Rs. 3,36,16,641.20/- along with further interest and
corporate guarantee from corporate debtor 1 for sum of Rs.
3,36,16,641.20/- along with further interest being admitted and
accepted jointly and severally by M/s Flywheel Logistics Private
Limited (Corporate debtor- 1), Flywheel Logistics Solutions
Private Limited (corporate debtor-2) - Corporate debtors shall not
for any reason whatsoever dispute or be entitled to dispute the
"consent admitted liability" of operational creditor
b) It is admitted by and between the parties that the total settlement
consideration of Rs. 3,36,16,641.20 is now being considered as
total claim due from corporate debtor -2 (Flywheel Logistics
Solutions Private Limited) along with a legal recourse on
Corporate debtor-1 (M/s Flywheel Logistics Private Limited) and
is a discount to the amount(s) admittedly due and payable by
corporate debtor-1 and corporate debtor -2.
c)The operational creditor, notwithstanding the admitted
outstanding due and payable by Corporate debtor -2, has agreed to
restrict the settlement amount as reflected in the settlement
consideration on the condition that the 7 (Seven) post-dated
cheques all dated 23rd June 2018, for an amount of Rs.
3,36,16,641.20 shall be honoured without any further reference to
parties, on its deposit by operational creditor on 23rd June 2018.
d) However, in the event of default i.e. in the event of return of
cheques mentioned in Annexure-5, towards total sum of Rs.
3,36,16,641.20/- or balance thereof as unpaid for any reason
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whatsoever the parties admit and agree that the operational
creditor shall be entitle to receive and/ or recover from, corporate
debtors, jointly and severally the entire principle due and payable
as specifically as per the consent admitted liability, a sum of Rs.
3,36, 16,641.20/- along with further Simple Interest rate @12%
p.a. with monthly rests from the 23.06.2018 and/ or as a legal
recourse on Corporate debtor -1, a sum of Rs. 3,36,16,641.20/-
along with Simple Interest rate @12% p.a. with monthly rests from
23.06.2018. The calculation of revised interest doesn't affect the
validity of Demand notice in Form 3 issued to Corporate Debtors.
The settlement consideration as set out in these consent terms shall
in such event in no way be deemed a waiver of its claim(s) as set
out specifically in Demand notice in Form 3 issued to Corporate
Debtors.
xxx
18. Full and Final Settlement of all the claims
In the even the post dated cheques dated 23.06.2019 for ₹
3,36,16,641.20/-, is honoured on its deposit by operational
creditor and/or its assigns as contemplated between the parties;
the operational creditor undertakes to withdraw all the
complaints/ criminal cases or any application pending, if any,
before the NCLT Delhi for the said claims .”
(emphasis supplied)
21. The relevant portion of the consent terms dated 03.08.2018 are
as under:
“ 2) That the present consent terms dated 03.08.2018 is part and parcel
and is to be read with consent terms dated 01.05.2018 . That, present
consent terms dated 03.08.2018 are valid from the date of execution i.e.
from 03.08.2018 to till 10.09.2018 (the aforesaid shall hereinafter for the
sake of brevity be referred to as "moratorium period"), and all the legal
rights and remedies available to parties including but not limited to
enforcing any security/ guarantee, criminal proceedings etc. for
realization of the amount due are temporary suspended subject to the
action already taken U/s 138 by the operational creditor .
xxx
11. Legal Remedies
a) Notwithstanding anything contained in any law; in the event of default
totalling Rs. 3,36,16,641.20/- as un-paid for any reason whatsoever – the
same shall, without any furtherance to parties, be considered as breach
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of the consent terms. Operational creditor or its assigns shall in such
event have the absolute right and discretion to persue all such remedies
available to operational creditor or its assigns as under law including
but not limited to remedies for breach of the consent terms and/ or
remedies under the Insolvency and Bankruptcy code, 2016.
It is agreed by and between the parties that, in the event of default the
operational creditor has all the legal rights to initiate the fresh
proceedings against M/s Flywheel Logistics Solutions Private Limited
(Corporate debtor) for total claim of Rs. 3,75,00,00.00/- along with
further interest or balance of claim (net of recovery)
It is further agreed that corporate debtor issued fresh cheques to make
the security cheques totalling Rs.3,75,00,000.00/-
Copy of Security cheques issued by Corporate Debtor is enclosed as
Annexure-3
b) It is further agreed that total claim, to be recovered from corporate
debtor is Rs. 3,36,16,641.20/- along with further interest and corporate
debtor shall not for any reason whatsoever dispute or be entitled to
dispute the "consent admitted liability" of operational creditor
The operational creditor, notwithstanding the admitted outstanding due
and payable by Corporate debtor, has agreed to restrict the settlement
amount as reflected on the condition that the 7 (Seven) post-dated
rd
cheques on dated 23 June 2018, for an amount of Rs. 3,36,16,641.20
shall be honoured without any further reference to parties, on its deposit
by operational creditor on or after 10.09.2018.
c) However, in the event of default i.e. in the event of return of cheques
towards total sum of Rs. 3,36,16,641.20/- or balance thereof as unpaid
for any reason whatsoever the parties admit and agree that the
operational creditor shall be entitle to receive and/or recover from,
corporate debtor, jointly and severally payable as per the consent
admitted liability, a sum of Rs. 3,75,00,00.00/- along with further Simple
Interest rate @ 12% p.a. with monthly rests from the 10.09.2018. The
calculation of revised interest doesn’t affect the validity of Demand
notice in Form 3 issued to Corporate Debtor
12. Full and Final settlement of all the claims
In the event the post-dated cheques dated 23.06.2018 for Rs.
3,36,16,641.20/-, is honoured on its deposit by operational creditor
and/or its assigns as contemplated between the parties; the operational
creditor undertakes to withdraw all the complaints/ criminal cases or
any application pending , if any, before the NCLT Delhi for the said
claims. ”
(emphasis supplied)
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22. Even though there is a clause which provides for withdrawal of
all complaints, perusal of the consent terms prima facie indicates that
the parties had explicitly agreed that their legal rights and remedies
were temporarily suspended subject to the action initiated under
Section 138 of the NI Act, that is, the subject complaint.
23. The petitioners have however sought to impress upon this Court
that once the parties enter into a settlement, it is not open to the
complainant to pursue proceedings arising from the original
complaint. The case of the petitioners is fulcrumed on the decisions in
Gimpex Pvt. Ltd. v. Manoj Goel ( supra ) and Vinod Bansal v. Intec
Capital Ltd. ( supra ). In the opinion of this Court, the decisions in the
said cases do not further the case of the petitioners in the present
circumstances.
24. In Gimpex Pvt. Ltd. v. Manoj Goel ( supra ), the Hon’ble Apex
Court was seized with the issue of parallel prosecutions where the
second set of complaints arose from a compromise that was effected to
put a quietus to the first set of complaints. The complainant had filed
the first set of complaints under Section 138 of the NI Act against
dishonor of a number of cheques by Aanchal Cement Ltd. (‘ ACL ’). A
criminal complaint was also lodged by the complainant, in relation to
which, one of the Directors of ACL was arrested. During the pendency
of the bail application of the said Director, ACL allegedly approached
the appellant for a compromise. On the basis of the compromise deed,
the arrested Director was granted bail. The suit instituted by ACL
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alleging that the compromise was illegal was rejected and the
appellant filed a second set of complaints under Section 138 of the NI
Act against dishonor of cheques given in pursuance of the compromise
deed. The second complaint was quashed by the Hon’ble High Court
and the first set of complaints were allowed to continue. While dealing
with the appeals in this regard, the Hon’ble Apex Court quashed the
first set of complaints and allowed the second set of complaints to
continue. It was observed that two parallel set of complaints cannot be
allowed to continue and once a compromise deed had been entered
into, the first set of complaints could not continue.
In that case, the Hon’ble Apex Court was essentially considering
the issue of whether a cheque issued pursuant to a settlement
agreement arises out of a legal liability. The relevant observations are
as under:
“ 36. It is in this backdrop that we must now analyse the issue
regarding pendency of parallel proceedings for complaints under
Section 138 of the NI Act. The question that arises for our
consideration is whether once the settlement has been entered
into, the complainant can be allowed to pursue the original
complaint under Section 138 of the NI Act .
xxx
41. When a complainant party enters into a compromise agreement
with the accused, it may be for a multitude of reasons — higher
compensation, faster recovery of money, uncertainty of trial and
strength of the complaint, among others. A complainant enters into
a settlement with open eyes and undertakes the risk of the accused
failing to honour the cheques issued pursuant to the settlement,
based on certain benefits that the settlement agreement postulates.
Once parties have voluntarily entered into such an agreement
and agree to abide by the consequences of non-compliance of the
settlement agreement, they cannot be allowed to reverse the
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effects of the agreement by pursuing both the original complaint
and the subsequent complaint arising from such non-compliance.
The settlement agreement subsumes the original complaint. Non-
compliance of the terms of the settlement agreement or dishonour
of cheques issued subsequent to it, would then give rise to a fresh
cause of action attracting liability under Section 138 of the NI
Act and other remedies under civil law and criminal law.
42. A contrary interpretation, which allows for the complainant to
pursue both the original complaint and the consequences arising
out of the settlement agreement, would lead to contradictory
results.
42.1. First, it would allow for the accused to be prosecuted and
undergo trial for two different complaints, which in its essence
arise out of one underlying legal liability.
42.2. Second, the accused would then face criminal liability for not
just the violation of the original agreement of the transaction which
had resulted in issuance of the first set of cheques, but also the
cheques issued pursuant to the compromise deed.
42.3. Third, instead of reducing litigation and ensuring faster
recovery of money, it would increase the burden of the criminal
justice system where judicial time is being spent on adjudicating
an offence which is essentially in the nature of a civil wrong
affecting private parties — a problem noted in multiple judgments
of this Court cited above. Most importantly, allowing the
complainant to pursue parallel proceedings, one resulting from
the original complaint and the second emanating from the terms
of the settlement would make the settlement and issuance of fresh
cheques or any other partial payment made towards the original
liability meaningless. Such an interpretation would discourage
settlement of matters since they do not have any effect on the
status quo, and in fact increase the protracted litigation before
the court.
xxx
43. Thus, in our view, a complainant cannot pursue two parallel
prosecutions for the same underlying transaction. Once a
settlement agreement has been entered into by the parties, the
proceedings in the original complaint cannot be sustained and a
fresh cause of action accrues to the complainant under the terms
of the settlement deed. It has been urged by Mr V. Giri, learned
Senior Counsel, and Ms Liz Mathew, learned counsel, that parallel
prosecutions would not lead to a multiplicity of proceedings, as in
the present case, both complaints are being tried by the same
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court. This may be true for the case before us, however, this Court
in Damodar S. Prabhu [Damodar S. Prabhu v. Sayed Babalal H.,
(2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri)
1328] and Expeditious Trial of Cases Under Section 138 of NI Act
1881, In re [Expeditious Trial of Cases Under Section 138 of NI
Act 1881, In re, (2021) 16 SCC 116] has recognised multiplicity of
complaints as one of the major reasons for delay in trial of cases
under Section 138 of the NI Act and the consequent choking of the
criminal justice system by a disproportionate number of Section
138 cases. While it is true that the trial in this case is before one
court, that is not necessarily the ground reality in all cases.
xxx
C.2. Liability arising from the settlement agreement
49. Once a settlement agreement has been entered into between the
parties, the parties are bound by the terms of the agreement and
any violation of the same may result in consequential action in civil
and criminal law.
xxx
50.1. Since the proceedings under the NI Act for the dishonour of
the first set of cheques was pending, the second set of cheques
issued only on the basis of the deed of compromise could not be
construed as being towards the discharge of a liability. ”
(emphasis supplied)
In Gimpex Pvt. Ltd. v. Manoj Goel ( supra ), the Hon’ble Apex
Court had specifically noted that the terms of the settlement had
effaced the original complaint. Unlike this case, the terms of the
settlement as extracted in that case do not reflect that the parties had
any understanding that the proceedings under NI Act would be kept in
abeyance. Clearly, where the terms of settlement are such that they
subsume the original complaint, neither party can evade the
consequence of the same, but in this case, the terms reflect intent to
merely keep the NI Act proceedings on hold by informing the Trial
Court. Pertinently, the second set of cheques were also never
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deposited by Respondent Nos. 1 and 2 so as to cause wastage of
judicial time or duplicity of proceedings, which were cogent factors
which weighed the Hon’ble Apex Court.
25. The facts of Vinod Bansal v. Intec Capital Ltd. ( supra ) are also
distinguishable from the circumstances at hand. In that case, the
parties had entered into a settlement pursuant to issuance of subject
cheque wherein certain other cheques were given in furtherance of the
settlement. Instead of presenting the latter cheques for encashment, the
complainant encashed the earlier cheque, which was dishonoured.
Although the complainant therein argued that its conduct had
repudiated the settlement, the said assertion was rejected by the
Coordinate Bench. In this context, it was held that the complainant
could not maintain a complaint qua the initial cheque and the
complainant could have only gained cause of action once the cheques
issued in pursuance of settlement were dishonoured. Rejecting the
argument in regard to there being no two complaints, the Court held
that allowing the complainant to pursue the initial complaint would
run contrary to the settlement. As noted above, the terms of settlement
in the present case explicitly provided for the complaint to be kept on
hold.
26. It is argued on behalf of the accused persons that on execution
of the settlement terms, the original complaint was subsumed and the
Trial Court became functus officio when Respondent No.1 acted on
the settlement by pursuing its remedy against FLSPL before NCLT.
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Further, it is stressed that the conduct of Respondent No.1 in not filing
any claim against the accused company with the Interim Resolution
Professional, Resolution Professional or NCLT, when the accused
company went into liquidation, despite being aware of the same,
reflects that the complainant company did not treat the accused
company as its creditor. It is also argued that pursuant to the said
settlements, there is no legally recoverable debt against the petitioners,
whereby, the subject complaint is no longer maintainable.
27. Pertinently, Respondent Nos. 1 and 2 have maintained that the
cheques given in terms of the settlements were never presented for
encashment due to repeated requests of the accused persons and the
same were rendered stale as the counsel for the accused persons
categorically submitted before the Trial Court that the matter may be
proceeded further as no payments could be made. The record also
reflects that multiple adjournments were sought by the parties from
30.05.2018 onwards where the accused persons sought more time for
disbursing the settlement amount and to settle the matter .
Furthermore, peculiarly, even after consent terms dated 01.05.2018
and 03.08.2018 were executed in the year 2018, none of the accused
pressed for compounding of the matter either. Rather, perusal of order
dated 29.11.2018 indicates that the counsel for the accused persons
had made the submission on 29.11.2018 for proceeding further with
proceedings in presence of the petitioners–Luv and Anil. Prima facie ,
the same reflects that it was never the intention of the parties that the
original complaint would be withdrawn immediately after executing
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the consent terms prior to payment of settlement amount. If that be so,
merely because Respondent Nos. 1 and 2 decided to pursue their civil
remedy against FLSPL in NCLT, the same cannot ipso facto result in
quashing of the subject complaint.
28. Insofar as the issue of absence of legally recoverable debt is
concerned, it is pertinent to note that the offence is made out once the
cheque in question is dishonored. Though the proceedings under NI
Act have the character of a Civil Sheep in Criminal Wolf’s clothing
and the primary goal is to protect the victim’s financial interests,
subsequent assignment of debt to a sister concern does not invalidate
the liability, especially when the terms of settlement and assignment
prima facie provide for such exception. It is also pointed out that no
amount has been received by the contesting Respondents towards the
outstanding liability.
29. Though a complainant may choose to compound the complaint
even without payment of the settlement amount, which would result in
the original complaint being rendered without cause, the present case
is one where the parties prima facie appear to have decided to
preserve the NI Act proceedings. Once the petitioners entered into a
settlement which specifically provided for the proceedings under NI
Act to be kept on hold and provide for a prima facie caveat for the
said proceedings, they cannot claim benefit of such settlement for
quashing of the complaint as Courts cannot compel the complainant to
settle the matter unless it specifically assents to the same. Nonetheless,
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the same is a disputed question of fact that cannot be determined in the
present proceedings.
30. As noted above, inherent jurisdiction to scuttle proceedings can
only be exercised in the face of uncontroverted material. In a case
such as this one where there is serious dispute in relation to
interpretation of consent terms as well as demonstrable consent on part
of the accused persons for continuation of proceedings, it would be
insupportable to quash the complaint.
31. Insofar as the order dated 30.11.2019 is concerned, perusal of
the same indicates that adjournment was sought on the ground that the
counsel had been recently engaged and he had not received a copy of
the complaint, which request was opposed by counsel for complainant
as it had apparently been made amply clear previously that the entire
cross-examination would be conducted on that very day. It was noted
that the said counsel had filed an MOA on behalf of the company on
01.11.2019 and the application for certified copies was only made one
day before the date of hearing. It was further noted that despite
multiple appearances on behalf of the accused company, no such
objection was made previously, including on the previous date when
the matter had already been fixed for cross-examination. Even so, the
file was handed over to the counsel for perusal and the matter was
passed over to 2:00 PM for cross-examination for the same day. It was
at this juncture when another request for adjournment was made that
the Court closed the right of the accused company. Though it is
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pleaded that vital right of the accused company was erroneously
closed without appreciating that the counsel had only been engaged on
01.11.2019, this Court is not persuaded to interfere with the said order
as it has been rightly noted that sufficient opportunities had been
afforded for cross-examination and the Court had explicitly indicated
on 27.11.2019 that cross-examination would not be deferred any
further.
32. Though the petitioner Anil has also sought to belatedly impugn
order dated 29.11.2018 on ground of mechanical framing of notice, as
noted above, the Court proceeded with the matter only after a
categorical submission to this effect was made by the counsel for the
accused in presence of the petitioner Anil.
33. Although the petitioner Anil has also impugned order dated
31.01.2020 in his petition wherein his statement under Section 313 of
the CrPC was recorded, no argument was addressed in this regard and
challenge to the said order was not pressed during the course of
hearing. It is pleaded in the petition that the petitioner Anil is
aggrieved as his statement was record in a perfunctory manner without
putting any incriminating or inculpatory material/ circumstances
appearing against him in evidence. Mere bald assertions have been
made in the petition that the petitioner Anil is aggrieved as his
statement was record in a perfunctory manner and he was not
accorded a fair opportunity to explain himself. There is no specific
averment on record as to how the petitioner was prejudiced and which
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inculpatory material was not put to him. Though ordinarily every
incriminatory material ought to be specifically put to the accused, as
the petitioner has not been able to establish as to how he was
prejudiced, this Court is not inclined to interfere with the said order.
34. In view of the aforesaid discussion, this Court finds no reason to
quash the complaint and consequential proceedings thereof. Further,
no ground is made out to quash orders dated 29.11.2018, 30.11.2019
and 31.01.2020.
35. The present petitions are accordingly dismissed. Pending
applications also stand disposed of.
36. A copy of this order be placed in all the matters.
AMIT MAHAJAN, J
JULY 01, 2026
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