In Brief
A company owner issued dishonoured cheques to repay an advance for a machine that was never supplied. The complainant pursued criminal proceedings under the Negotiable Instruments Act (Section 138) and IPC Sections 406, 420, 120B. After a settlement in Lok Adalat failed due to delayed payment, the Supreme Court intervened and ensured full compensation of Rs 1.55 crore plus Rs 10 lacs interest. Although the complainant refused to consent to compounding, the Court quashed all criminal proceedings, finding the transaction was civil in nature without fraudulent intent from inception, and prioritising the compensatory remedy over punishment.
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