The Supreme Court has quashed the conviction of a company and its director in a cheque dishonour case after both sides reached a full and final settlement of ₹30 lakh. The Court also directed the immediate release of the director, who had been taken into custody to serve his sentence.
Background of the Case
The case arose from a complaint filed under Section 138 of the Negotiable Instruments Act against Parsharvanath Weld Wires Pvt. Ltd. and its director. A trial court had convicted the accused in 2014 and sentenced the director to one year of simple imprisonment while directing payment of ₹28 lakh as compensation to the complainant.
The conviction was later upheld by the appellate court and the Chhattisgarh High Court. Following the dismissal of the revision petition, the director was taken into custody on April 23, 2026.
However, two days later, the parties entered into a settlement. Under the agreement, the complainant accepted ₹30 lakh as full and final payment and agreed to compound the offence.
A Bench of Justice Aravind Kumar and Justice Prasanna B. Varale noted that the dispute had been amicably resolved and the complainant's grievance stood fully addressed.
Referring to its earlier decision in Gian Chand Garg v. Harpal Singh, the Bench observed that there was no reason to reject the compromise merely because the conviction had already attained finality.
The Court stated,
“We have no hesitation to accept the compromise entered into and compound the offence, particularly in the light of settlement arrived at between the parties.”
Allowing the appeal, the Supreme Court set aside the Chhattisgarh High Court's order and quashed the conviction and sentence imposed on the appellants.
Since the director was already in custody, the Court directed the Superintendent of Central Jail, Raipur, to release him forthwith and report compliance to the Court Registry.
Case Details
Case Title: Parsharvanath Weld Wires Pvt. Ltd. & Anr. v. State of Chhattisgarh & Anr.
Case Number: Criminal Appeal No. 2904 of 2026 (@ SLP (Crl.) No. 10110 of 2026)
Bench: Justice Aravind Kumar and Justice Prasanna B. Varale
Decision Date: May 27, 2026
