In a landmark decision, the Supreme Court has nullified the High Court's ruling in a cheque bounce case, emphasizing that courts should prioritize compensatory measures over punitive actions when both parties agree to a settlement. This decision is expected to expedite the resolution of pending cheque bounce cases.

A cheque is a crucial financial document used for significant transactions. If a cheque bounces, it is considered a criminal offense under Indian law, with provisions for penalties and punishment. The Supreme Court noted that when both parties agree to a settlement, courts should focus on resolving such cases amicably rather than imposing harsh penalties.

Recently, a bench comprising Justice Sudhanshu Dhulia and Justice A. Amanullah overturned the conviction of P. Kumar Sami in a cheque bounce case. The parties involved had reached a settlement, with the complainant receiving ₹5.25 lakh. Considering this agreement, the Supreme Court quashed the High Court's decision, favoring a more amicable resolution.

• In 2006, P. Kumar Sami issued a cheque for ₹5.25 lakh to Subramaniam.
• The cheque bounced due to insufficient funds, leading to Sami's conviction by a lower court, which sentenced him to one year of imprisonment.
• The High Court upheld the lower court's decision.
• The Supreme Court, however, dismissed both the lower court's and High Court's judgments after acknowledging the settlement between the parties.

The Court expressed concern over the large backlog of cheque bounce cases, calling it a significant issue for the judiciary. It emphasized:

This decision marks a step towards reducing the judicial burden and encouraging amicable resolutions in cases of cheque bounce.