CRL.REF.--1/2016. Case: DAYAWATI Vs. YOGESH KUMAR GOSAIN. High Court of Delhi (India)
| Case Number | CRL.REF.--1/2016 |
| Citation | NA |
| Judgement Date | October 17, 2017 |
| Court | High Court of Delhi (India) |
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.REF.No.1/2016
% Reserved on : 28th February 2017 Date of decision : 17th October 2017
DAYAWATI ..... Petitioner
Through: Mr. Gautam Pal, Adv. for the complainant
versus
YOGESH KUMAR GOSAIN ..... Respondent
Through: Mr. Ajay Digpaul, Adv. for the respondent
Mr. J.P. Sengh, Sr. Adv., Ms. Veena Ralli alongwith Mr. Ravin Kapur and Mr. Siddharth Aggarwal, Advs. as Amici Curiae.
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MS. JUSTICE ANU MALHOTRA
JUDGMENT
GITA MITTAL, ACTING CHIEF JUSTICE
1. The legal permissibility of referring a complaint cases under Section 138 of the NI Act for amicable settlement through mediation; procedure to be followed upon settlement and the legal implications of breach of the mediation settlement is the subject matter of this judgment. Shri Bharat Chugh, as the concerned Metropolitan
Magistrate (NI Act) – Central - 01/THC/ Delhi, when seized of Complaint Case Nos.519662/2016 and 519664/2016 (Old Complaint Case Nos.2429/2015 and 2430/2015) under Section 138 of the Negotiable Instruments Act (“NI Act” hereafter) passed an order dated 13th January, 2016, the following questions under Section 395 of the Code of Criminal Procedure (“Cr.P.C” hereafter) to this court for consideration :
“1. What is the legality of referral of a criminal compoundable case (such as one u/s 138 of the NI Act) to mediation?
2. Can the Mediation and Conciliation Rules, 2004 formulated in exercise of powers under the CPC, be imported and applied in criminal cases? If not, how to fill the legal vacuum? Is there a need for separate rules framed in this regard (possibly u/s 477 of the CrPC)?
3. In cases where the dispute has already been referred to mediation – What is the procedure to be followed thereafter ? Is the matter to be disposed of taking the very mediated settlement agreement to be evidence of compounding of the case and dispose of the case, or the same is to be kept pending, awaiting compliance thereof (for example, when the payments are spread over a long period of time, as is usually the case in such settlement agreements)?
4. If the settlement in Mediation is not complied with – is the court required to proceed with the case for a trial on merits, or hold such a settlement agreement to be executable as a decree?
5. If the Mediated Settlement Agreement , by itself, is taken to be tantamount to a decree, then, how the same is to be executed? Is the complainant to be relegated to file an application for execution in a civil court? I f yes , what
should be the appropriate orders with respect to the criminal complaint case at hand. What would be the effect of such a mediated settlement vis-à-vis the complaint case ?”
(Emphasis by us)
The reference has been registered as Crl.Ref.No.1/2016.
2. Given the importance of the questions raised in criminal law, by an order dated 15th March, 2016, we had appointed Mr. Siddharth Aggarwal, Advocate as amicus curiae in the matter. On the 20th of
July 2016, having regard to the nature of the above issues which had been crystallized by the ld. Metropolitan Magistrate and in view of their extensive experience on all aspects of mediation, we had also appointed Mr. J.P. Sengh, Sr. Advocate as well as Ms. Veena Ralli, Advocate (currently Member and Organizing Secretary respectively of the Organizing Committee of Samadhan - Delhi High Court Mediation and Conciliation Centre), both senior and experienced mediators, as amici curiae in the matter.
3. Court notice was also issued to the counsel for the parties in both CC Nos.2429/2015 & 2430/2015, Dayawati v. Yogesh Kumar Gosain pending in the court of the Metropolitan Magistrate for appearance before us and they stand represented through counsel before us.
4. Written submissions stand filed by learned amici curiae to assist this court. We have had the benefit of hearing Mr. J.P. Sengh, Senior Advocate, Ms. Veena Ralli, Advocate and Mr. Siddharth Aggarwal,
Advocate as amici curiae as well as Mr. Gautam Pal, ld. counsel for the complainant and Mr. Ajay Digpaul, ld. counsel for the respondent in the complaints under Section 138 of the NI Act.
5. We set down hereunder the headings under which we have considered the matter :
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Factual matrix (paras 6 to 16)
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Alternate dispute resolution mechanisms statutorily recognized (paras 17 to 20)
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Statutory provisions (paras 21 to 31)
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Scope of Section 89 of the Code of Civil Procedure, 1908 (paras 32 to 41)
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Statutory power to refer matters for dispute resolution and effect of a settlement (paras 42 to 49)
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Power of criminal courts to refer cases to mediation (paras 50 to 57)
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Process to be followed in reference of above disputes in criminal law to mediation (para 58)
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Dispute resolution encouraged in several cases by the Supreme Court in non-compoundable cases as well (paras 59 to 62)
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Nature of proceedings under Section 138 of the NI Act (paras 63 to 67)
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Permissibility of settlement of offence under Section 138 of the NI Act (paras 68 to 73)
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Mediation and Conciliation Rules, 2004 – notified the Delhi High Court (paras 74 to 77)
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Impact of settlement of disputes in a complaint under Section 138 Negotiable Instruments Act by virtue of Lok Adalat under the Legal Services Authorities Act, 1987 (paras 78 to 80)
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What is the procedure to be followed if in a complaint case under Section 138 of the NI Act, a settlement is reached in mediation? (paras 81 to 107)
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Breach of such settlement accepted by the court – consequences? (paras 108 to 117)
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Reference answered (para 118)
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Result (paras 119 to 121)
We now propose to discuss the above issues in seriatim :
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Factual matrix
6. Before dealing with the questions raised before us, it is necessary to briefly note some essential facts of the case. The appellant Smt. Dayawati (“complainant” hereafter) filed a complaint under Section 138 of the NI Act, complaining that the respondent Shri Yogesh Kumar Gosain herein (“respondent” hereafter) had a liability of `55,99,600/- towards her as on 7th April, 2013 as recorded in a regular ledger account for supply of fire-fighting goods and equipment to the respondent on different dates and different quantities. In part discharge of this liability, the respondent was stated to have issued two account payee cheques in favour of the complainants of `11,00,000/- (Cheque No.365406/- dated 1st December, 2014) and `16,00,000/-
(Cheque No.563707 dated 28th November, 2014). Unfortunately, these two cheques were dishonoured by the respondent’s bank on presentation on account of “insufficiency of funds”.
7. As a result, the complainant was compelled to serve a legal notice of demand on the respondent which, when went unheeded, led to the filing of two complaint cases under Section 138 of the NI Act before the Patiala House Courts, New Delhi being CC Nos.89/1/15 and 266/1/15. In these proceedings, both parties had expressed the intention to amicably settle their disputes. Consequently, by a common order dated 1st April, 2015 recorded in both the complaint cases, the matter was referred for mediation to the Delhi High Court Mediation and Conciliation Centre.
8. We extract hereunder the operative part of the order dated 1st
April, 2015 which reads as follows :
“… Ld. Counsel for accused submits that accused is willing to explore the possibilities of compromise. Ld. Counsel for complainant is also interested (sic) in compromise talk. Let the matter be referred to Mediation Cell, High Court Delhi, Delhi. Parties are directed to appear before the Mediation Cell, Hon’ble High Court, Delhi on 15.04.2015 at 2:30 p.m.”
9. It appears that after negotiations at the Delhi High Court Mediation and Conciliation Centre, the parties settled their disputes under a common settlement agreement dated 14th May, 2015 under which the accused agreed to pay a total sum of `55,54,600/- to the complainant as full and final settlement amount in installments with
regard to which a mutually agreed payment schedule was drawn up. It was undertaken that the complainant would withdraw the complaint cases after receipt of the entire amount. In the agreement drawn up, the parties agreed to comply with the terms of the settlement which was signed by both the parties along with their respective counsels. We extract the essential terms of the settlement hereunder :
“xxx xxx xxx
6. The following settlement has been arrived at between the parties hereto :
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That the second party shall pay a total sum of Rs.55,54,600/- to the first party towards full and final settlement of all the claims of the first party against the second party.
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That on 25.06.2015 , the second party shall pay Rs.11,00,000/- to the first party by way of NEFT/RTGS/demand draft.
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That on 25.10.2015 , the second party shall pay Rs.16,00,000/- to the first party by way of NEFT/RTGS/demand draft.
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The balance sum of Rs.28,54,600/- shall be paid by the second party to the first party within 18 months from
25.11.2015 by way of NEFT/RTGS/demand draft in equal monthly installments i.e. Rs.1,58,600/-
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That the second party shall also provide “C-Form (Sales Tax, Mumbai)” to the first party against Bill Nos.R 605 dated 27.02.2013 and R 607 dated 06.03.2013.
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That the first party undertakes to withdraw the present CC Nos. 89/1/15 and 266/1/15 upon receipt of entire settlement amount from the second party. ”
(Emphasis by us)
10. This settlement agreement was placed before the court on 1st
June, 2015 when the following order was recorded :
“File received back from the Mediation Centre with report of settlement. Settlement agreement dated 14.05.2015 gone through. At joint request, put up for compliance of abovesaid settlement agreement and for making of first installment on 30.06.2015 ”
(Emphasis by us)
11. Unfortunately, the accused/respondent herein failed to comply with the terms of the settlement. Though vested with the obligation thereunder to pay a sum of `11,00,000/- as the first installment on 25th June, 2015, he paid...
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