Settlement out of court can happen when a criminal complaint is filed for a cheque bouncing case. The law allows for settlement through a legal concept called compounding of offences.
In this process, the payee/holder of the cheque agree to not file a court case or agrees to withdraw his court case in exchange for some compensation (usually monetary).
This can happen at any stage of the court proceedings.
The law allows such an agreement to reduce litigation and burden on courts.0