Madhya Pradesh High Court
Ashwin Gangwal vs M/S Agrawal Agencies Through ... on 22 August, 2019
Author: Prakash Shrivastava
Bench: Prakash Shrivastava
1
HIGH COURT OF MADHYA PRADESH BENCH AT INDORE
(S.B.: HON. SHRI JUSTICE PRAKASH SHRIVASTAVA)
Misc. Petition No. 1088/2019
Ashwin Gangwal & another
Petitioners
Versus
M/s Agrawal Agencies
Respondent
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Shri R.S. Chhabra alongwith Shri Mudit Maheshwari
learned counsel for petitioners.
Shri D.M. Shah learned counsel for respondent.
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Whether approved for reporting :
ORDER
(Passed on 22/8/2019 ) By this Misc. Petition under Article 227 of the Constitution of India the petitioners have challenged the order of trial court dated 26th December 2018 whereby trial court has allowed the application of respondent filed under Section 143-A of Negotiable Instruments Act and directed the petitioners to pay a sum of Rs. 13,76,542/- (equal to 15% of the cheque amount of Rs. 91,76,950) as interim compensation. The petitioners have also challenged the revisional order dated 20/2/2019 whereby the learned Additional Sessions Judge has dismissed the revision by affirming the order of trial court dated 26/12/2018. 2/ The facts in nutshell are that respondent has filed a complaint under Section 138 of Negotiable Instruments Act on 21/1/2016 against petitioners with the plea that cheque of Rs. 91,76,950/- dated 21/5/14 given by petitioner was dishonoured.
2Pending that complaint, on 12/1/2018 he had filed an application under Section 143-A of the Act seeking 20% of the amount of dishonoured cheque as interim compensation which has been allowed by trial court and affirmed by the court of Sessions.
3/ Learned counsel for petitioners submits that provisions of Section 143-A of the Act have been brought in force w.e.f. 1/9/2018 during pendency of the complaint therefore, they will not apply to the pending proceedings and will have prospective effect having application to the proceedings initiated after the amendment.
4/ Opposing the prayer learned counsel for respondent has submitted that provision has been rightly applied to the pending proceedings and the issue has already been decided by the Coordinate Bench of this court vide order dated 22/2/2019 passed in M.Cr.C. No. 7943/2019 in the case of Padmesh Gupta Vs. Tirupati Natural Resource and Infra Pvt. Ltd.
5/ I have heard the learned counsel for parties and perused the record.
6/ Undisputedly the complaint in the present case under Section 138 has been filed on 21/1/2016. By the Negotiable Instruments (Amendment) Act, 2018 published in the notification dated 2nd August 2018, Section 143-A has been incorporated in The Negotiable Instruments Act, 1881 and vide notification published in the gazette dated 16 th August 2018, the amended provision has been brought in force w.e.f. 1 st September 2018.
7/ In the present case, the complaint under Section138 of Negotiable Instruments Act was filed on 21/1/2016 prior to 3 coming into force of amended provision section 143-A, of the Act, therefore, the sole issue involved in the present case is as to whether the provisions of Section 143-A will apply to a pending complaint under section 138 of Act. 8/ The aforesaid issue has been concluded by Hon'ble Supreme court by order dated 30th July 2019 passed in criminal appeal no.1160/2019 in the matter of G.J. Raja Vs. Tejraj Surana wherein it has been held that:
"14. In the present case, the Complaint was lodged in the year 2016 that is to say, the act constituting an offence had occurred by 2016 whereas, the concerned provision viz. Section 143A of the Act was inserted in the statute book with effect from 01.09.2018. The question that arises therefore is whether Section 143A of the Act is retrospective in operation and can be invoked in cases where the offences punishable under Section 138 of the Act were committed much prior to the introduction of Section 143A. We are concerned in the present case only with the issue regarding applicability of said Section 143A to offences under Section 138 of the Act, committed before the insertion of said Section 143A.
15. While considering general principles concerning 'retrospectivity of legislation' in the context of Section 158-BE inserted in the Income Tax Act, 1961, it was observed by this Court in Commissioner of Income Tax (Central)-I, New Delhi vs. Vatika Township Private Limited as under:-
"28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward. As was observed in Phillips v. Eyre, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to 4 change the character of past transactions carried on upon the faith of the then existing law."
16. Similarly, while considering the effect of modified application of the provisions of the Code, as a result of Section 20(4)(bb) of the Terrorist and Disruptive Activities (Prevention) Act, 1987, whereunder the period for filing challan or charge-sheet could get extended, this Court considered the issue about the retrospective operation of the concerned provisions in Hitendra Vishnu Thakur and others vs. State of Maharashtra and others as under:-
"26. The Designated Court has held that the amendment would operate retrospectively and would apply to the pending cases in which investigation was not complete on the date on which the Amendment Act came into force and the challan had not till then been filed in the court. From the law settled by this Court in various cases the illustrative though not exhaustive principles which emerge with regard to the ambit and scope of an Amending Act and its retrospective operation may be culled out as follows:
(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.
(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.
(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.
(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished.
(v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication."5
17. The fourth and the fifth principle as culled out by this Court in Hitendra Vishnu Thakur are apposite to the present fact situation.
18. The provisions contained in Section 143A have two dimensions. First, the Section creates a liability in that an accused can be ordered to pay over upto 20% of the cheque amount to the complainant. Such an order can be passed while the complaint is not yet adjudicated upon and the guilt of the accused has not yet been determined. Secondly, it makes available the machinery for recovery, as if the interim compensation were arrears of land revenue. Thus, it not only creates a new disability or an obligation but also exposes the accused to coercive methods of recovery of such interim compensation through the machinery of the State as if the interim compensation represented arrears of land revenue. The coercive methods could also, as is evident from provision like Section 183 of the Maharashtra Land Revenue Code, in some cases result in arrest and detention of the accused.
19. We must at this stage, refer to a decision of this Court in Employees' State Insurance Corporation vs. Dwarka Nath Bhargwa where provisions of Section 45B, which was inserted in Employees State Insurance Act, 1948 with effect from 28.01.1968 was held to be procedural and that it could have retrospective application. Said Section 45B is as under:-
"45B. Recovery of contributions. - Any contribution payable under this Act may be recovered as an arrear of land revenue."
The issue was whether the modality of recovery so prescribed in said Section 45B could be invoked in respect of amounts which had become payable on 27.01.1967 and 24.01.1968, i.e. before said Section 45B was inserted in the statute book. While holding that the arrears could be recovered as arrears of land revenue, it was observed, "It is not in dispute and cannot be disputed that the contributions in question had remained payable all throughout and were not paid by the respondent."
20. It must be stated that prior to the insertion of Section 143A in the Act there was no provision on the statute book whereunder even before the pronouncement of the guilt of an accused, or even before his conviction for the offence in question, he could be made to pay or deposit interim compensation. The imposition and consequential recovery of fine or compensation either through the modality of Section 421 of the Code or Section 357 of the code could also arise only after the person was found guilty of an offence. That was 6 the status of law which was sought to be changed by the introduction of Section 143A in the Act. It now imposes a liability that even before the pronouncement of his guilt or order of conviction, the accused may, with the aid of State machinery for recovery of the money as arrears of land revenue, be forced to pay interim compensation. The person would, therefore, be subjected to a new disability or obligation. The situation is thus completely different from the one which arose for consideration in Employees' State Insurance Corporation case.
21. Though arising in somewhat different context, proviso to Section 142(b) which was inserted in the Act by Amendment Act 55 of 2002, under which cognizance could now be taken even in respect of a complaint filed beyond the period prescribed under Section 142(b) of the Act, was held to be prospective by this Court in Anil Kumar Goel v. Kishan Chand Kaura. It was observed:-
"10. There is nothing in the amendment made to Section 142(b) by Act 55 of 2002 that the same was intended to operate retrospectively. In fact that was not even the stand of the respondent. Obviously, when the complaint was filed on 28-11-1998, the respondent could not have foreseen that in future any amendment providing for extending the period of limitation on sufficient cause being shown would be enacted."
22. In our view, the applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation.
23. We must, however, advert to a decision of this Court in Surinder Singh Deswal and Ors. vs. Virender Gandhi where Section 148 of the Act which was also introduced by the same Amendment Act 20 of 2018 from 01.09.2018 was held by this Court to be retrospective in operation. As against Section 143A of the Act which applies at the trial stage that is even before the pronouncement of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the accused is already found guilty of the offence under Section 138 of the Act. It may be stated that there is no provision in Section 148 of the Act which is similar to Sub-Section (5) of Section 143A of the Act. However, as a matter of fact, no such provision akin to sub-section (5) of Section 143A was required as Sections 421 and 357 of the Code, which apply post- conviction, are adequate to take care of such requirements. In that sense said Section 148 depends upon the existing 7 machinery and principles already in existence and does not create any fresh disability of the nature similar to that created by Section 143A of the Act. Therefore, the decision of this Court in Surinder Singh Deswal stands on a different footing.
24. In the ultimate analysis, we hold Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book. Consequently, the orders passed by the Trial Court as well as the High Court are required to be set aside. The money deposited by the Appellant, pursuant to the interim direction passed by this Court, shall be returned to the Appellant along with interest accrued thereon within two weeks from the date of this order.
25. The Appeal is allowed in aforesaid terms."
9/ In the above judgment it has been held that provisions of Section 143A are prospective in nature and can be applied or invoked only in case where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the Statute Book. The said Section was inserted in the statute Book on 1/9/2018 whereas in the present case the offence was committed much prior to that. Hence the provisions of Section 143A will not be attracted in the present case. 10/ In view of the aforesaid pronouncement of Hon'ble Supreme court the respondent is not entitled to the benefit of order of the Coordinate Bench dated 22/2/2019 passed in M.Cr.C. No. 7943/2019 in the case of Padmesh Gupta. 11/ Hence the Misc. Petition is allowed and impugned order dated 26th December 2018 passed by trial court and revisional order dated 20th February 2019 are set aside.
C.C. as per rules.
(Prakash Shrivastava) Judge BDJ Digitally signed by Bhuneshwar Datt Date: 2019.08.24 12:49:34 -07'00' HIGH COURT OF MADHYA PRADESH MP No. 1088/2019 Indore, Dated: 22/8/2019 The matter is posted today for order and before signing the order, learned counsel for petitioner has pointed out that the issue involved in the present case has been settled by Hon'ble Supreme court by order dated 30th July 2019 in criminal appeal no. 1160/2019 in case of G.J. Raja Vs. Tejraj Surana.
The Misc.petition is therefore, allowed in the light of the said judgment by a separate order.
Order passed, signed and dated.
(Prakash Shrivastava) Judge BDJ Digitally signed by Bhuneshwar Datt Date: 2019.08.24 12:48:42 -07'00'