Can a cheque bounce case be withdrawn?

Yes, a cheque bounce case filed under Section 138 of the Negotiable Instruments Act, 1881 can be withdrawn, provided specific legal conditions are fulfilled. Below is a detailed explanation of how and when such a case can be withdrawn:

1. Withdrawal of a Cheque Bounce Case

A. Nature of a Cheque Bounce Case

- A cheque bounce case is initiated as a criminal complaint, but the offense under Section 138 is considered compoundable.

- Compounding allows the complainant and the accused to settle their dispute and close the case. This is equivalent to withdrawal.

B. Grounds for Withdrawal

- Settlement or Compromise: The complainant and the accused mutually agree to settle the matter out of court.

- Payment of Dues: The accused pays the cheque amount, legal notice costs, and any agreed compensation to the complainant.

- Change in Circumstances: The complainant decides not to pursue the case for personal or business reasons.

2. Procedure to Withdraw a Cheque Bounce Case

A. Before Filing the Complaint

1. If the cheque has bounced, the payee (complainant) can decide not to send a legal notice or pursue legal action, avoiding the filing of a case.

2. Settlement between the parties during this stage resolves the issue informally.

B. After Filing the Complaint and Before Trial

1. Settlement Between Parties:

- If a case is filed but both parties agree to a settlement, the complainant can withdraw the case by filing an application for compounding the offense before the trial court.

- Section 147 of the Negotiable Instruments Act allows offenses under Section 138 to be compounded at any stage of proceedings.

2. Steps to Withdraw the Case:

- Draft a settlement agreement highlighting the terms of the compromise.

- Submit a joint application for compounding the offense before the Magistrate Court.

- The court reviews the agreement and grants permission for withdrawal, dismissing the case.

C. During the Trial

1. If the case progresses to trial and the parties reach a settlement:

- A written compromise agreement must be filed in court.

- Both parties must jointly request the court to withdraw the complaint through compounding.

2. The court, upon satisfaction, permits the withdrawal of the case and closes proceedings against the accused.

D. After Conviction

1. Even if the accused is convicted of the offense under Section 138:

- The parties can settle the matter, and the complainant can consent to withdrawal.

- The accused may appeal to a higher court (Sessions or High Court), attaching the settlement agreement.

- Based on the settlement, the appellate court can set aside the conviction and dismiss the case.

3. Legal Provisions for Withdrawal

A. Section 147 of the Negotiable Instruments Act

- Declares the offense under Section 138 as compoundable, allowing both parties to settle the matter.

B. Section 359 of the Code of Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)

- Details the process and conditions for compounding of offenses.

C. Role of the Courts

- The courts encourage amicable settlements in cheque bounce cases to avoid prolonged litigation.

- If the withdrawal is based on mutual consent, the courts usually allow the withdrawal.

4. Documents Needed for Withdrawal

1. Application for Compounding: A joint application filed by both parties requesting the court to allow withdrawal.

2. Settlement Agreement: Highlighting the terms agreed upon by both parties.

3. Proof of Payment: Bank receipts, transaction details, or signed acknowledgment by the complainant, confirming receipt of dues.

4. Other Court Orders: In appellate cases, earlier judgments or orders supporting the appeal.

5. Points to Consider While Withdrawing a Case

1. Voluntary Consent: The settlement must be voluntary, with no coercion involved.

2. Complete Payment: Ensure the agreed amount is fully paid before seeking withdrawal.

3. Proper Documentation: All terms of settlement and mutual agreement must be documented to avoid future disputes.

4. Court Fees and Costs: The complainant may be required to pay minimal fees to close the case.

5. Withdrawal Approval: Once the settlement is presented, the court must officially approve the withdrawal.

6. Situations Where Withdrawal Is Not Allowed

- If the court finds the settlement is not genuine or coerced, it may refuse to permit withdrawal.

- If procedural time limits for withdrawal are not followed, delays must be condoned by the court.

Conclusion

Withdrawal of a cheque bounce case is possible at any stage of the legal process, including after conviction, through mutual settlement or compounding. The process requires proper documentation, voluntary consent, and court approval to ensure legal compliance. Settling a case amicably benefits both parties by saving time, money, and the stress of litigation, while ensuring fair compensation to the complainant and avoiding criminal liability for the accused.

Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.

Adcocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)

Contact: 88271 22304

www.jsrohilla.in