In Brief
M/s New Win Export and its partner borrowed Rs. 5,25,000 in 2006 and gave a dishonoured cheque in discharge of the debt. The respondent filed a complaint under Section 138 of the Negotiable Instruments Act. After conflicting decisions by lower courts and the High Court's conviction, the parties settled the dispute by executing a settlement agreement in January 2024, with the appellants paying the full amount. The Supreme Court set aside the conviction, holding that when parties settle a compoundable cheque dishonour case with the complainant's consent, conviction serves no purpose and should be quashed to prioritize compensation over punishment.
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