Authority: Supreme Court Special Lok Adalat (Samadhan Samaroh)

Order Date: 21-08-2026

Case Overview

  • Petitions: Special Leave Petitions (Criminal) No. 11364/2024 and No. 10754/2024 filed by M/S N.S Rathinam and Sons & ANR. against M/S ADJ Shipping Company Pvt. Ltd.
  • Background: Both petitions sought to impugn the Madras High Court order dated 20‑06‑2024 that convicted the petitioners under Section 138 of the Negotiable Instruments Act, 1881.
  • Settlement: During pendency, parties reached an amicable settlement, documented in two settlement deeds forwarded by the District Legal Services Authority, Chennai.
  • Settlement Deed (SLP 11364/2024):

1. First Party (N.S. Rathinam) paid Rs 1,00,000 on 30‑07‑2026 via IMPS from Utkarsh Small Finance Bank (IFSC UTKS0001680).

2. First Party paid an additional Rs 4,53,500 on 07‑08‑2026 via the same bank and IFSC.

3. Total amount received by Second Party (ADJ Shipping) = Rs 5,53,500.

4. Remaining balance of Rs 4,46,500 is deposited before the Supreme Court Registry.

5. Second Party’s bank details for receipt of the balance:

  • Account Name: S. Arunachalam
  • Bank: CSB Bank, Chennai Broadway Branch
  • Account No.: 0058018794185
  • IFSC: CSBK0000058

6. First Party undertook to file necessary applications before the Supreme Court on 24‑08‑2026 for withdrawal and release of the deposited amount, ensuring credit to the above account without any deduction.

7. First Party bears sole responsibility, cost, and risk for all procedural steps, including filing, follow‑up, and disbursement.

8. Upon transfer, First Party must immediately inform Second Party and counsel with documentary proof (bank transaction details/UTR).

9. The balance amount must be released and credited to the Second Party’s account on or before 24‑09‑2026.

10. Receipt of the full settlement sum of Rs 10,00,000 will constitute full and final settlement of all disputes.

  • Settlement Deed (SLP 10754/2024): Identical terms to the above deed; DLSA Chennai confirmed the joint settlement deed.
  • Legal Basis: Citing Section 147 of the NI Act and Supreme Court precedents (Damodar S. Prabhu v. Sayed Babalal H, Raj Reddy Kallem v. State of Haryana, B. V. Seshaiah v. State of Telangana, Gian Chand Garg v. Harpal Singh) that an offence under Section 138 is compoundable at any stage, even post‑conviction.
  • Court Direction: Offences under Section 138 are compounded; conviction orders are set aside. The amount deposited in the Court Registry shall be released to the respondent with any accrued interest.
  • Award: The settlement agreements are incorporated as part of the award.

Final Outcome

  • The Supreme Court compounds the offences under Section 138 of the Negotiable Instruments Act, thereby setting aside the earlier conviction orders.
  • The total settlement amount of Rs 10,00,000 is to be fully paid to the respondent, with Rs 5,53,500 already received and the remaining Rs 4,46,500 to be released from the Court Registry as per the settlement deed.
  • The release must occur by 24‑09‑2026, after which all disputes between the parties are deemed fully settled.

Topics: Legal Settlement, Negotiable Instruments Act, Court Award