Even though offence under Section 138 NI Act is quasi criminal in nature, the outcome of settlement in mediation is required to receive imprimatur or authoritative approval of the Court, in case the proceedings are settled in mediation as per the Mediation Act, 2023 – Smt. Nisha Devi Vs. Shri Gur Kirpal Singh @ Guddu – Delhi High Court
Hon’ble Delhi High Court referring the Section 26 of the Mediation Act, 2023 held that even though offence under Section 138 N.I. Act is quasi criminal in nature, the ‘outcome of settlement’ in mediation is required to receive imprimatur or authoritative approval of the Court, in case the proceedings are settled in mediation.
However, it is important to underscore that wheresoever, compromise/ settlement/compounding itself is recorded by the Court, it is inherent that Court is satisfied that the settlement is lawful and has been voluntarily entered between the parties.
There is no bar that unless the matter is forwarded to mediation for settlement, the same cannot be entered before the Court itself. The Court only needs to be satisfied that the settlement is lawful and consent of the parties is voluntary and not obtained under coercion or undue influence.