CAUSE TITLE:
B V SESHAIAH V/S THE STATE OF TELANGANA & ANR
DATE OF ORDER:
01st February 2023
JUDGE(S):
HONOURABLE MR. JUSTICE KRISHNA MURARI, J
PARTIES:
Petitioner: B V SESHAIAH
B VAMSI KRISHNA
Respondent: THE STATE OF TELANGANA & ANR.
SUBJECT:
The Hon’ble Supreme Court (hereinafter referred to as ‘Supreme Court’ or ‘the Court’), has set aside the impugned order of Hyderabad High Court and held that appellant’s conviction was under unjustifiable. However, the parties are free to settle their disputes according to the memorandum of understanding.
IMPORTANT PROVISIONS:
The Negotiable Instruments Act, 1881
- Section 138 – states when a cheque is dishonoured due to insufficient money in the account, among other reasons.
BRIEF FACTS:
- In response to a private complaint lodged by Respondent No. 2, actions were taken against the Appellants in this case under Section 138 of the Negotiable Instruments Act, 1881. The trial court found the appellants guilty as a result of these proceedings.
- The Appellant requested a revision in the High Court following their conviction.
- The High Court dismissed the Revision and upheld the Conviction of the Appellant due to the failure to file the compromise petition that was agreed upon by Respondent No. 2.
- The Appellant in this case have lodged an appeal in opposition to the contested decision and judgement from Hyderabad's High Court of Judicature, which was rendered on April 17, 2018.
QUESTIONS ROSE:
Whether non filing of the compromise by the respondent amounts to unjustifiable convection of the appellant?
ARGUMENTS ADVANCED BY THE APPELLANT
- Appellant stated that it is significant to remember that the parties signed a Memorandum of Understanding to resolve the conflict amicably throughout the period of the revision submitted by the council.
- In accordance with Clause 8 of the Memorandum of Understanding, the issue was to be addressed peacefully first before being sent to a single arbitrator if that didn't work.
- It should be emphasised that Respondent No. 2 was required by the terms of the settlement to submit a compromise petition with the High Court, but he did not do so.
ARGUMENTS ADVANCED BY THE RESPONDENT
- It has been argued by the respondent that the appellants stole money from Respondent No. 2 while posing as investors and then turned the money into a profit illegally.
- Thought the agreement stated the arbitration clause still the offence committed by the appellant could not compounded therefore a complaint under section 138 of the Act was made.
ANALYSIS BY THE COURT:
- A compromise petition had to be filed before the High Court, and the Respondent No. 2 was required to do so. By failing to do so, the Respondent withdrew sensitive details from the High Court, which caused the conviction of the Appellants to be unjustly confirmed.
- As a result, the court grants these appeals and vacates the trial court's judgement of conviction. However, the parties are free to resolve their disagreement in accordance with the Memorandum of Understanding stipulations.
CONCLUSION
In the present case the parties were required by the terms and circumstances of the settlement agreement, as stated in clause 8 of the Memorandum of Understanding, to resolve the matter amicably or via arbitration.
It has been observed that when an agreement specifies the clause which states compounding of offences as settlement and such clause is legally binding on to the parties then such settlement cannot be overruled by the high court
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