2025 (7) TMI 1530 - SCH - Indian Laws

Dishonor of Cheque - Seeking transfer of Complaint Case pending before the Court of Judicial Magistrate Fast Track Alandur Chennai to the Court of Judicial Magistrate Prayagraj Uttar Pradesh - territorial Jurisdiction - by virtue of the mediation the parties have arrived at a settlement on certain terms and conditions - HELD THAT - Having considered the matter in detail and having perused the Memorandum of settlement dated 04.06.2025 the Transfer Petition is disposed of in terms of the Memorandum of Settlement. The Registry will draw a decree in the aforesaid terms.

Summary

ISSUES:

Whether a complaint under Section 138 of the Negotiable Instruments Act can be settled through a Memorandum of Settlement mediated by the Supreme Court Mediation Centre.Whether the terms of a settlement agreement reached through mediation can be enforced as binding and final between the parties.Whether noncompliance with the settlement terms can amount to contempt of court.Whether a transfer petition under Section 406 of the Code of Criminal Procedure can be disposed of on the basis of a settlement agreement.

RULINGS / HOLDINGS:

The Court held that the parties have validly entered into a "full and final settlement" of the dispute arising from the complaint under Section 138 of the Negotiable Instruments Act, as evidenced by the Memorandum of Settlement dated 04.06.2025.The settlement agreement is binding upon the parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns, and constitutes a complete resolution of all claims and counterclaims related to the complaint.The Court ruled that "any noncompliance with their respective undertakings arising in the present Settlement Agreement shall amount to contempt of this Hon'ble Court," thereby enforcing the settlement terms as court orders.The transfer petition under Section 406 CrPC is disposed of in terms of the Memorandum of Settlement, with directions to the Registry to draw a decree accordingly.

RATIONALE:

The Court applied the statutory framework under Section 138 of the Negotiable Instruments Act and Section 406 of the Code of Criminal Procedure, recognizing the role of mediation under the Supreme Court Mediation Centre to facilitate amicable resolution.The Court emphasized the principle that settlements voluntarily entered into by parties, especially those recorded before the Court or its mediation centre, are binding and enforceable as decrees of the Court.The Court underscored that the settlement agreement, being "full and final," precludes revival of any claims or disputes arising from the same cause of action, thereby promoting judicial economy and finality.The Court's direction that breach of settlement terms amounts to contempt reflects a doctrinal approach to strengthen compliance with mediated settlements endorsed by the judiciary.