Hi
1) The new agreement proposed by Mr.X is nothing but a sham document solely created
a) To evade repayment of Rs15,50,000-/- plus 3% Interest and
b) also to avoid prosecution in the 138 NI act case.
2) It appears that Mr.X is apprehensive of the ongoing 138 NI Case but at the same time does not want to repay you the money and hence planning for yet another fraudulent agreement.
3) So , if Mr.X is genuinely interested to settle the loan, he should ideally opt for settlement / compromise by committing to settle/ compromise under court supervision.
4) Merits and Procedure for Settlement /Compromise for cases filed under 138 NI Act.
a) Please be informed that Criminal Courts are empowered to refer the matter to mediation and up to six weeks time is granted for arriving at a settlement between the parties and the settlement shall be as per procedure akin to that followed by the civil court under Order XXIII of the C.P.C.
b) So parties to the suit may request the criminal court to refer the matter to Mediation and the criminal court shall list the matter before the concerned mediation centre/mediator on a fixed date directing the presence of the parties/authorized representatives before the mediator on the said date.
c) If a settlement is reached during the mediation, the settlement agreement which is drawn-up must incorporate : (i) a clear stipulation as to the amount which is agreed to be paid by the party;
(ii) a clear and simple mechanism/method of payment and the manner and mode of payment;
(iii) undertakings of all parties to abide and be bound by the terms of the settlement must be contained in the agreement to ensure that the parties comply with the terms agreed upon.
(iv) a clear stipulation, if agreed upon, of the penalty which would enure to the party if a default of the agreed terms is committed in addition to the consequences of the breach of the terms of the settlement,
(v) an unequivocal declaration that both parties have executed the agreement after understanding the terms of the settlement agreement as well as of the consequences of its breach,
(vi) a stipulation regarding the voluntariness of the settlement and declaration that the executors of the settlement agreement were executing and signing the same without any kind of force, pressure and undue influence.
d) Please also be informed that any settlement/ compromise order passed by judge should also clearly stipulate that in the event of default by either party, the amount agreed to be paid in the settlement agreement will be recoverable in terms of Section 431 read with Section 421 of the Cr.P.C.
e) Additionally, for breach of the undertaking given to the magistrate/court, the court would take appropriate action permissible in law to enforce compliance with the undertaking as well as the orders of the court based thereon, including proceeding under Section 2(b) of the Contempt of Courts Act, 1971 for violation thereof.
f) In the event that after various rounds of mediation, the parties conclude that the matter cannot be amicably resolved or settled, information to this effect should be placed before the magistrate who should proceed in that complaint on merits, as per procedure prescribed by law.
Hope this information is useful.