Supreme Court Settles Cheque Bounce Case with Consent Terms: Key Details

The Supreme Court of India recently disposed of a special leave petition in the case of Vinod Boob vs. Dodballaur Spinning Mills Pvt. Ltd. & Anr. through a consent order dated April 21, 2025. The judgment, delivered by Justices Dipankar Datta and Manmohan, brought closure to a long-standing dispute under Section 138 of the Negotiable Instruments Act, 1881 (cheque bounce case) while preserving the parties’ rights in ongoing arbitration proceedings.

The case originated when the petitioner, Vinod Boob, challenged the Karnataka High Court’s judgment dated July 22, 2021, which had set aside the conviction and sentence of the respondents under Section 138 of the NI Act. The High Court had reversed the decisions of both the Metropolitan Magistrate and Additional Sessions Court that had initially convicted the respondents.

During the Supreme Court hearing, both parties arrived at a mutually agreeable settlement after some arguments. The key terms of their consent agreement were:

“i. 20% of the amount deposited by the Respondents with the learned Additional Sessions Court along with accrued interest, if any, shall be released to the Petitioner forthwith.

ii. An amount of Rs.9.50 lakhs shall be paid in 6 (six) equated bimonthly (every two months) installments by demand draft/RTGS mode by the Respondents to the Petitioner.

iii. The aforesaid payment shall be without prejudice to the rights and contentions of the parties in the pending arbitration proceedings.”

The Supreme Court found these terms fair and reasonable, noting in its order: “This Court is of the view that the aforesaid consensual terms are fair and reasonable. Accordingly, the Special Leave Petition is disposed of in the aforesaid terms.” The bench specifically clarified that this order would not impact the separate arbitration proceedings between the parties.

Read also: https://judgmentlibrary.com/supreme-court-upholds-conviction-in-esic-contribution-case-key-legal-analysis/

This judgment demonstrates the Supreme Court’s approach in encouraging parties to settle disputes amicably, particularly in commercial matters where parallel proceedings (criminal and arbitration) may be ongoing. The consent order balanced immediate financial relief for the petitioner with structured future payments, while carefully preserving the substantive rights of both parties in their arbitration.

The case also highlights how cheque bounce matters under Section 138 of the NI Act often intersect with broader commercial disputes that may be better resolved through arbitration or civil remedies. By approving the consent terms, the Supreme Court provided a practical resolution to the immediate criminal proceedings while allowing the underlying commercial dispute to be determined through the appropriate arbitral forum.

Petitioner Name: Vinod Boob.
Respondent Name: Dodballaur Spinning Mills Pvt. Ltd. & Anr..
Judgment By: Justice Dipankar Datta, Justice Manmohan.
Place Of Incident: Bengaluru, Karnataka.
Judgment Date: 21-04-2025.
Result: dismissed.

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