In Brief
M/s Gimpex Private Limited supplied goods to Aanchal Cement Limited (ACL) and received dishonored cheques for Rs 9 crores. A criminal complaint under Section 138 of the Negotiable Instruments Act was filed. Parties later settled and ACL issued fresh cheques as part of a compromise deed; these were also dishonored, leading to a second complaint. The High Court quashed the second complaint, holding that parallel prosecutions for the same liability were impermissible. The Supreme Court held that while parallel prosecutions should generally not proceed, a settlement agreement subsumes the original complaint and creates a fresh cause of action. The second complaint should proceed, but the first complaint (now merged into the settlement) must be quashed. The Court set aside the High Court order and held that whether the settlement cheques discharge a debt is a question of trial, not for quashing stage adjudication."
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