Jammu & Kashmir High Court - Srinagar Bench
Abdul Hamid Mir vs Tariq Ahmad Khan on 20 February, 2018
Author: Mohammad Yaqoob Mir
Bench: Mohammad Yaqoob Mir
Serial No.04
Regular List
HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
561-A No.124/2015
Date of order:20 .02.2018
Abdul Hamid Mir v. Tariq Ahmad Khan
Coram:
Hon'ble Mr Justice Mohammad Yaqoob Mir, Judge.
Appearance:
For the Petitioner(s): Mr. P. S. Ahmad, Adv.
For the Respondent(s): Mr. G. Q. Bhat, Adv.
i) Whether approved for reporting in Yes
Law journals etc.:
ii) Whether approved for publication
in press: Yes/No
1. Petitioner has suffered conviction for commission of offence under
Section 138 of Negotiable Instrument Act(hereinafter for short referred to as the
N. I. Act) which has been maintained by the Appellate Court (Court of
Additional Sessions Judge, Anantnag). Aggrieved whereof, instant petition
under Section 561-A Cr. P. C has been filed.
BACKGROUND OF THE CASE:
(i) Two bearer cheques dated 03.10.2011 and 05.10.2011 for an amount of Rs.4.50,000/ (rupees four lacs fifty thousand) each, issued by the petitioner to the respondent, were presented in the J&K Bank Ltd branch concerned for encashment on 22.12.2011 in the J&K but same bounced for „insufficiency of money‟ in the account of the petitioner.
561-A No.124/2015 Page 1 of 10(ii) A demand notice has been served upon the petitioner on 29.12.2011.
When the amount was not paid within the stipulated period, complaint under Section 138 of the N. I. Act was presented before the Court Judicial Magistrate, 1st Class, Anantnag. Learned Magistrate after recording statement of the complainant and one witness in support of the complaint, has issued the process, in response whereof petitioner had appeared before the Magistrate.
(iii) On 03.10.2012, particulars of the offence were stated and explained to the petitioner and was asked as to why he should not be convicted. The petitioner had stated that he had issued two cheques, same could not be encashed, he was informed through notice. Then has added that, in fact, he owes Rs.12,70,000/ to the complainant out of which he has paid an amount of Rs.5,00,000/ to the complainant. He sought time to pay the unpaid amount. Learned trial court provided an opportunity to the petitioner for payment of the amount which he failed.
(iv) On 22.04.2012, respondent filed an application under Section 243 Cr. P. C for judgment. Petitioner filed objections to the said application stating therein that he has no intention to put the complainant into any discomfort, in fact he is making arrangement for payment and had also annexed a cheque worth Rs.1,00,000/ with the objections.
(v) Learned trial court convicted the accused (petitioner) under Section 138 of N. I. Act and sentenced him to six months imprisonment and also ordered him to pay a fine of Rs.3000/, in default to undergo imprisonment for a further period of six months.
(vi) Aggrieved of the conviction so recorded by the Magistrate vide his judgment dated 23.10.2013, appeal has been filed unsuccessfully as the 561-A No.124/2015 Page 2 of 10 same has been dismissed by the Court of learned Additional Sessions Judge, Anantnag, vide judgment dated 30.03.2015.
2. Learned counsel for the petitioner projected that miscarriage of justice in view of two impugned judgments is quite apparent and non-application of mind in passing the judgment impugned is also clear. Buttressing this contention, would submit that the petitioner, in fact, had borrowed an amount of Rs.12/ lacs from the respondent, which contention is belied by the petitioner himself because in the proceedings recorded by the trial court after the issue of process, issue of two cheques, bouncing thereof and service of notice of demand is not denied by the petitioner. Instead petitioner had sought time for paying the amount back to the respondent. Even he had added that, in fact, he had obtained a loan of Rs.12,70,000/ from the respondent out of which he had already paid Rs.5/ lacs, so according to him Rs.7,70,000/ were outstanding. The issue of two cheques, bouncing thereof and the position that the petitioner had borrowed money from the respondent is clearly admitted by the petitioner before the trial Magistrate.
3. Learned counsel for the petitioner would contend that Section 17 of the Evidence Act has not been followed while recording confessional statement of the petitioner. The submission is misplaced. There was no requirement of following Section 17 of the Evidence Act. Chapter XX of the Cr. P. C has to be followed while dealing with complaints under Section 138 of N. I. Act. The lucid language of Section 242 Cr. P. C suggests that when the accused appears or is brought before the Magistrate, the particulars of the offences are to be stated to him. Then he has to be given chance to show cause as to why he should not be convicted. Learned Magistrate had granted time to the petitioner for settlement which he has not availed. Then following the mandate of Section 242 Cr. P. C, learned Magistrate has explained the particulars of offence to the 561-A No.124/2015 Page 3 of 10 petitioner which he has not denied. Learned Magistrate, under Section 242 Cr. P. C, has specifically explained to the petitioner the allegation that he has issued two cheques bearing Nos.511792 and 511791 for an amount of Rs.4,50,000/ each to the complainant which could not be encashed from the concerned bank,. The Bank has issued a memo regarding insufficiency of amount in the account, thereafter a notice has been served upon him, still he did not pay the amount, therefore, for default in making the payment, why he should not be punished. The petitioner has specifically answered as under:
"He has issued two cheques for an amount of Rs.9/ lacs in favour of the complainant. It is true that both the cheques were not encashed. the complainant had served him a notice. Thereafter complainant filed the complaint. In reality, he owed an amount of Rs.12,70,000/ to the complainant out of which he had paid back Rs.5,30,000/ to the complainant, so Rs.5,40,000/ are balance, some time may be granted for returning the amount."
4. The amount was not paid, therefore, complainant filed an application under Section 243 Cr. P. C for passing the judgment. As against that application, petitioner filed objections stating therein that he never intended to put the complainant to any discomfortable position, however, he being under financial distress, is making arrangement for payment to the complainant. In addition has also mentioned therein that a cheque for an amount of Rs.1,00,000(rupees one lac) bearing No.36922543 is annexed and more money would be arranged onwards.
5. Learned Magistrate has given ample opportunity to the petitioner for repayment of money which he has failed. The cheque for an amount of 561-A No.124/2015 Page 4 of 10 Rs.1,00,000(rupees one lac), which was annexed with the objections, too has been dishonoured by the Bank.
6. Section 243 Cr. P. C mandates that when an accused admits that he has committed the offence, his admission shall be recorded as nearly as possible in the words used by him and in case he does not show any sufficient cause for not being convicted, the Magistrate shall convict him. Learned Magistrate while following the mandate of Section 243Cr. P. C has allowed the petitioner to respond to the application so filed by the respondent under Section 243 Cr. P. C. He has simply stated that he should be given sometime and even has again misled the Court by issuing a cheque for an amount of Rs.1,00,000 (rupees one lac), which too was unpaid.
7. It is clear that the petitioner has now no cause, what to speak of sufficient cause for not being convicted. The Magistrate has rightly convicted him. When the mandate of law and the procedure prescribed has been strictly followed i.e. Chapter XX of Cr. P. C has been followed, there could be no requirement of following Section 17 of the Evidence Act. The argument advanced is accordingly repelled.
8. The next limb of argument of the learned counsel for the petitioner is that the Magistrate has imposed a fine of Rs.3000 and the Appellate Court has wrongly enhanced the fine amounting to Rs.7,70,000, which is not permissible. The submission is totally misplaced. Learned Additional Sessions Judge has not enhanced the fine, instead he has followed the mandate of Section 138 of N. I. Act. Section provides that if a person is convicted, he shall be convicted to a period which may extend to two years or with fine which may extend to twice the amount of the cheque. Learned Magistrate had erred in awarding fine of Rs.3000/ as the same is not consistent with the mandate of Section 138 of N. I. Act such an error has been rectified by the learned Additional Sessions Judge 561-A No.124/2015 Page 5 of 10 which is consistent with the mandate of Section 138 of N. I. Act. The relevant portion of Section 138 of the N. I. Act is reproduced here-under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years‟, or with fine which may extend to twice the amount of the cheque, or with both:
9. The provision of Negotiable Instrument Act has an object of controlling and discouraging the cheque bouncing. Conviction or sentence is only resorted to when the accused fails to pay the borrowed amount. Scheme of the Act is such which provides that when a cheque is bounced, notice of demand shall be issued. Then a cooling off period of one month for filing the complaint has been prescribed, so that the amount is paid. Commission of other crimes is different to the crime covered by the Negotiable Instrument Act. In this connection para 561-A No.124/2015 Page 6 of 10 17of the judgment rendered by the Hon‟ble Apex Court in the case titled "Damodar S. Prabhu Vs. Sayed Baba Lal H", reported in (2010) 5 SCC 663, is advantageous to be quoted:
"In a recently published commentary, the following observations have been made with regard to the offence punishable under Section 138 of the Act [Cited from: Arun Mohan, Some thoughts towards law reforms on the topic of Section 138, Negotiable Instruments Act - Tackling an avalanche of cases (New Delhi: Universal Law Publishing Co. Pvt. Ltd., 2009) at p. 5] "... Unlike that for other forms of crime, the punishment here (in so far as the complainant is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque.
If we were to examine the number of complaints filed which were `compromised' or `settled' before the final judgment on one side and the cases which proceeded to judgment and conviction on the other, we will find that the 561-A No.124/2015 Page 7 of 10 bulk was settled and only a miniscule number continued."
10. The next contention of the learned counsel for the petitioner is that learned Additional Sessions Judge has awarded compensation which is not permissible under Section 138 of N. I. Act.
11. Learned Appellate Court while dealing with the contention has noticed that in view of conferment of special power and the jurisdiction of the Judicial Magistrate 1st Class, the ceiling as to the amount of fine stipulated in the Criminal Procedure Code has been removed and, as such, Magistrate can impose sentence or fine under Section 138 N. I. Act beyond Rs.5000/, which opinion is based on the judgment rendered by the Hon‟ble Apex Court titled "R. Vijayan v. Baby & Anr." reported in AIR 2012 SC 528. Para 15 of the judgment is relevant to be quoted:
"15. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under section 357(1)(b) of the Code. Though a complaint under section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount, (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the 561-A No.124/2015 Page 8 of 10 court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under section 357 (1)(b) of the Code and the provision for compounding the offences under section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary."
12. Learned Additional Sessions Judge has rightly recorded that the accused has admitted that he owes an amount of Rs.7,40,000 (rupees seven lacs forty thousand) to the respondent, as such, has enhanced the amount of fine up to Rs.7,00,000(rupees seven lacs), on recovery payable as compensation to the respondent.
561-A No.124/2015 Page 9 of 1013. The conclusions drawn by learned Additional Sessions, Anantnag, in maintaining the sentence and then modifying the order of fine enhancing it to Rs.7,00,000(rupees seven lacs) is perfectly justified and in-keeping with the position of law, therefore, no interference is warranted.
14. For the stated reasons, petition being devoid of merit is dismissed, judgments impugned upheld.
15. Trial court record along with copy of the judgment be sent back to the trial court.
(Mohammad Yaqoob Mir) Judge Srinagar 20.02.2018 "Bhat Altaf, PS"
561-A No.124/2015 Page 10 of 10