The Delhi High Court has quashed the conviction and sentence in a cheque dishonour case under Section 138 of the Negotiable Instruments Act after the parties entered into a full and final settlement.
Justice Prateek Jalan allowed the petition filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, noting that the dispute had been amicably resolved and the complainant had no objection to setting aside the conviction. The petitioner had earlier been convicted and sentenced to five months’ simple imprisonment along with a direction to pay ₹75 lakh as compensation.
During the proceedings, both parties informed the Court that they had executed a compromise deed, under which the petitioner agreed to pay ₹1.2 crore in full settlement of all claims. The Court recorded that the entire settlement amount had been paid and accepted by the respondent.
The Court reiterated that there is no legal bar on compromise even after conviction, particularly when the settlement is voluntary and bona fide. It also emphasised that the primary objective of such proceedings is compensatory rather than punitive. Reference was made to Gian Chand Garg v. Harpal Singh,2025 SCC OnLine SC 2317 and Damodar S. Prabhu v. Sayed Babalal H, (2010) 5 SCC 663.
Accordingly, the Court quashed the conviction order dated 22 January 2025 and the sentencing orders passed in November 2025, while directing that the parties remain bound by the terms of the settlement.
Appreanaces
Petitioner- Mr. Pramod Kr. Dubey, Sr. Adv. with Mr. Nakul Gandhi, Mr. Satyam Sharma, Mr. Yash Saxena, Advocates.
Respondent- Mr. Avneet Singh, Advocate with Mr. Shiv Agarwal, Director.
