What is limitation period for filing of execution of compromise decree of S 138 of N I Act case?

 Introduction

Section 138 of the Negotiable Instruments Act, 1881 (NI Act) is a widely used legal provision to address the offence of dishonour of cheques. Often, parties involved in such cases opt for a compromise or settlement, which is recorded by the court. If the terms of the compromise are not fulfilled, the aggrieved party may seek execution of the compromise decree. Understanding the limitation period for filing such execution petitions is crucial for effective legal recourse.

What is a Compromise Decree in Section 138 NI Act Cases?

A compromise decree is a court order that records the settlement terms agreed upon by both parties in a legal dispute. In Section 138 NI Act cases, this typically involves the accused agreeing to pay the cheque amount (or a negotiated sum) to the complainant, and the court recording this compromise as a formal order or decree. This decree can be enforced if the accused fails to honor the terms.

Limitation Period for Execution: The Legal Framework

The limitation period for execution of decrees is governed by the Limitation Act, 1963. Specifically, Article 136 of the Act provides:

"For the execution of any decree (other than a decree granting a mandatory injunction) or order of any civil court, the period of limitation is twelve years from the date when the decree or order becomes enforceable.

Application to Section 138 NI Act Compromise Decrees

• When is the Decree Enforceable?
  The compromise decree becomes enforceable from the date it is passed by the court or from the date specified in the decree for compliance.

• Limitation Period
  The decree-holder (usually the complainant) has twelve years from the date the decree becomes enforceable to file an execution petition.

• Nature of the Decree
  If the compromise is recorded by the court and an order or decree is passed, it is treated as a civil court decree for the purpose of execution, even though the original proceedings were criminal in nature.

Important Considerations

• Private Settlements
  If the settlement is not recorded as a decree or order of the court, it cannot be executed like a court decree. Only court-recorded compromises are executable.

• Remedy for Breach
  If the compromise decree is not honored, the remedy is to file an execution petition within the limitation period, not to revive the original criminal complaint.

• Compounding of Offence
  Section 147 of the NI Act allows for compounding of offences under Section 138. Once a compromise is recorded and the case is disposed of, the only recourse for breach is execution of the compromise decree.

Summary Table

Situation	Limitation Period	Relevant Law/Article
Execution of compromise decree/order in Sec. 138 NI Act case	12 years	Article 136, Limitation Act, 1963

Conclusion

The limitation period for filing an execution petition for a compromise decree arising out of a Section 138 NI Act case is twelve years from the date the decree becomes enforceable, as per Article 136 of the Limitation Act, 1963. Parties must ensure timely action to enforce their rights and avoid losing their remedy due to the expiry of the limitation period.

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