Gujarat High Court
Pratham Reality Pvt. Ltd. Thro Ninad S. ... vs State Of Gujarat on 1 March, 2021
Author: A.Y. Kogje
Bench: A.Y. Kogje
R/CR.MA/18334/2020 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 18334 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18404 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18425 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18410 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18374 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18411 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18407 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18409 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 18371 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19499 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19560 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19497 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19455 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19459 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19461 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19553 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19551 of 2020
With
R/CRIMINAL MISC.APPLICATION NO. 19555 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.Y. KOGJE Sd/
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R/CR.MA/18334/2020 JUDGMENT
1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S KALAPI DEVELOPERS
Versus
STATE OF GUJARAT
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Appearance in:
CRIMINAL MISC.APPLICATION NO. 18334 of 2020
CRIMINAL MISC.APPLICATION NO. 18404 of 2020
CRIMINAL MISC.APPLICATION NO. 18425 of 2020
CRIMINAL MISC.APPLICATION NO. 18410 of 2020
CRIMINAL MISC.APPLICATION NO. 18374 of 2020
CRIMINAL MISC.APPLICATION NO. 18411 of 2020
CRIMINAL MISC.APPLICATION NO. 18407 of 2020
CRIMINAL MISC.APPLICATION NO. 18409 of 2020
CRIMINAL MISC.APPLICATION NO. 18371 of 2020
MR YOGESH S.LAKHANI, SENIOR ADVOCATE assisted by MR MAULIN G
PANDYA for the Applicants
MR LB DABHI, APP for Respondent No. 1
DHANESH R PATEL with MR DHRUV TOLIYA for Respondent No. 2
Appearance in:
CRIMINAL MISC.APPLICATION NO. 19499 of 2020
CRIMINAL MISC.APPLICATION NO. 19560 of 2020
CRIMINAL MISC.APPLICATION NO. 19497 of 2020
CRIMINAL MISC.APPLICATION NO. 19455 of 2020
CRIMINAL MISC.APPLICATION NO. 19459 of 2020
CRIMINAL MISC.APPLICATION NO. 19461 of 2020
CRIMINAL MISC.APPLICATION NO. 19553 of 2020
CRIMINAL MISC.APPLICATION NO. 19551 of 2020
CRIMINAL MISC.APPLICATION NO. 19555 of 2020
MR DHANESH R PATEL with DHRUV TOLIYA for the Applicant
MR LB DABHI, APP for the Respondent No. 1
MR ZUBIN BHARDA with MR BS RAJU and MR MAULIN G PANDYA for
Respondent Nos.2 and 3
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R/CR.MA/18334/2020 JUDGMENT
CORAM: HONOURABLE MR. JUSTICE A.Y. KOGJE
Date : 01/03/2021
ORAL JUDGMENT
1. RULE. Learned Advocate APP Mr.L.B.Dabhi waives service of Rule on behalf of the respondent-State in all these matters and learned Advocate Mr.Dhanesh Patel waives service of Rule on behalf of respondent No.2 in Criminal Misc.Application No.18334 of 2020 and group matters and learned Advocate Mr.Maulin Pandya waives service of Rule on behalf of respondent Nos.2 and 3 in Criminal Misc.Application No.19499 of 2020 and group matters.
2. This group of applications is filed against the respective orders of the appellate Court in the proceedings under the provisions of Section 138 of the Negotiable Instruments Act. Criminal Misc.Application Nos.18334 of 2020, 18404 of 2020, 18425 of 2020, 18410 of 2020, 18374 of 2020, 18411 of 2020, 18407 of 2020, 18409 of 2020 and 18371 of 2020 are filed by the original accused and Criminal Misc.Application Nos.19499 of 2020, 19560 of 2020, 19497 of 2020, 19455 of 2020, 19459 of 2020, 19461 of 2020, 19553 of 2020, 19551 of 2020 and 19555 of 2020 are filed filed by the original complainant. The dispute between the parties which requires consideration is imposition of condition by the appellate Court while enlarging the convict on bail.
3. With consent of both the sides these applications are Page 3 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT taken up for hearing and final disposal jointly. The facts are recorded from lead matters being Criminal Misc.Application no.18334 of 2020 and Criminal Misc.Application No.19499 of 2020, filed each by the original accused and original complainant respectively.
4. In the application filed by the original accused being Criminal Misc.Application No.18334 of 2020, the prayers are as under:-
"B) Your Lordships be pleased to delete Condition Nos.3 and 4 imposed while passing an order dated 01.10.2020 below Exh.4 by the learned 2 nd Additional District & Sessions Judge, Vadodara in Criminal Appeal No.133 of 2020.
C) Pending admission, final hearing and disposal of this application, Your Lordships be pleased to stay implementation and operation of Condition Nos.3 and 4 imposed while passing an order dated 01.10.2020 below Exh.4 by the learned 2 nd Additional District & Sessions Judge, Vadodara in Criminal Appeal No.133 of 2020."
4.1 In the application filed by the original complainant being Criminal Misc.Application No.19499 of 2020, the prayer is as under:-
"(b) To modify the order dated 01.10.2020 passed below Exhibit no.4 by the Ld. 2Nd Addl. District and Sessions Judge, Vadodara in Criminal Appeal Page 4 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT No.139 of 2020 and to suitably enhance the amount to be deposited by the Respondent Nos.2 and 3 - original accused, as a percentage of fine or compensation awarded by the Trial Court;"
5. The facts which are not in dispute are that Pratham Reality Pvt. Ltd. is the complainant who has filed Criminal Case No.48441 of 2011 (old case No.4865 of 2011) under Section 138 of the Negotiable Instruments Act ("the Act" for short) against M/s.Kalapi Developers and the proprietor of M/s.Kalapi Developers. After due trial, 14th Additional Chief Judicial Magistrate, Vadodara recorded conviction by judgment and order dated 12.03.2020 and recorded as under:-
"1. It is hereby ordered that as per the provisions of Section-255(2) of the Criminal Procedure Code, both the accused of this case are held guilty for the offence of Section-138 of the Negotiable Instrument Act and sentenced to undergo simple imprisonment of two years and fine of Rs.1,80,00,000/-. The accused persons shall undergo further simple imprisonment of three months if they commit default in payment of fine.
2. Out of the amount of fine paid by the accused persons, the amount of Rs.1,50,00,000/- (Rupees One Crore Fifty Lakh only) shall be paid to the complainant towards compensation as per Section-357 of the Criminal Procedure Code.
3. Provide copy of this judgment to the accused free of cost."Page 5 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021
R/CR.MA/18334/2020 JUDGMENT
6. Against the aforesaid judgment and order recording conviction, appeal being Criminal Appeal No.33 of 2020 is filed by M/s.Kalapi Developers and proprietor of M/s.Kalapi Developers under Section 374 of the Criminal Procedure Code. Along with the appeal, application Exh.4 is also filed under Section 389(3) of the Criminal Procedure Code for suspending the sentence. Upon by-
parte hearing, 2nd Additional District and Sessions Judge, Vadodara has passed order dated 01.10.2020 below application Exh.4, relevant part of which reads as under:-
"1. The present application is hereby allowed.
2. order passed by Ld. Trial Court in Cr. Case No.48441 of 2011 (Old CC No.4865/2011) dtd.12/03/2020 is hereby suspended till final disposal of the appeal on submission of surety bond of Rs.25,000/- and personal bond of like amount.
3. The applicants are directed to deposit 20% amount of the disputed cheque before the Nazir of this Court.
4. The applicants are further directed to pay Rs.10,000/- towards the cost to original complainant and present original complainant."
6.1 It is the aforesaid order which is subject matter of challenge by both the sides, more particularly clause-3 of the order which provides for deposit of 20% of the amount of disputed Page 6 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT cheques before the Nazir of the appellate Court. 6.2 The details regarding all the appeals before this Court are reproduced in tabular form as under:-
CRMA by CRMA by CC No. Accu. name Cheq. no. Cheq. Judg dt. Sentence Order of Cr.App accused complaina Amt. compen. l No. nt 18410/20 19461/20 48433/ Kalapi CDP 035063 87,50,000 12.03.20 SI for two years, fine 1,30,00,000 135/20 11 (old 035070 of Rs,1,60,00,000/-, No.653 in default, SI for 5/11) three months and compensation of Rs.1,30,00,000 to Kalapi DCP out of the fine of Rs.1,60,00,000 18407/20 19551/20 48427/ Sewang 035220 37,50,000 11.03.20 SI for two years, fine 55,00,000 137/20 11 (old RGP of Rs,70,00,000/-, No.653 in default, SI for 4/11) three months and compensation of Rs.55,00,000 to Sewang RGP out of the fine of Rs.,70,00,000 18425/20 19553/20 48436/ Sewang 035226 50,00,000 11.03.20 SI for two years, fine 75,00,000 138/20 11 (old RGP of Rs,90,00,000/-, No.724 in default, SI for 4/11) three months and compensation of Rs.75,00,000 to Sewang RGP out of the fine of Rs.,90,00,000 18374/20 19553/20 48434/ Kalapi CDP 035076 1,68,50,00 12.03.20 SI for two years, fine 2,50,00,000 136/20 11 (old 0 of Rs,3,00,00,000/-, No.699 in default, SI for 6/11) three months and compensation of Rs.2,50,00,000 to Kalapi DCP out of the fine of Rs.3,00,00,000 18409/20 19497/20 48439/ Sewang 035240 32,10,000 11.03.20 SI for two years, fine 48,00,000 141/20 11 (old RGP of Rs,60,00,000/-, No.770 in default, SI for 6/11) three months and compensation of Rs.48,00,000 to Sewang RGP out of the fine of Rs.,60,00,000 18404/20 19499/20 48610/ Sewang 026876 1,45,00,00 11.03.20 SI for two years, fine 2,15,00,000 139/20 11 (old RGP 0 of Rs,2,45,00,000/-, No.770 in default, SI for 7/11) three months and compensation of Rs.2,15,00,000 to Sewang RGP out of the fine of Rs.,2,45,00,000 18411/20 19459/20 48443/ Kalapi CDP -- 8,925,000 12.03.20 SI for two years, fine 1,30,00,000 134/20 11 (old of Rs,1,50,00,000/-, No.770 in default, SI for Page 7 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT 9/11) three months and compensation of Rs.1,30,00,000 to Kalapi DCP out of the fine of Rs.1,50,00,000 18371/20 19553/20 48442/ Sewang -- 17,500,00 11.03.20 SI for two years, fine 2,60,00,000 140/20 11 (old RGP 0 of Rs,3,00,00,000/-, No.770 in default, SI for 8/11) three months and compensation of Rs.2,60,00,000 to Sewang RGP out of the fine of Rs.,3,00,00,000 18334/20 19455/20 48441/ Kalapi CDP - 10,500,00 12.03.20 SI for two years, fine 1,50,00,000 133/20 11 (old 0 of Rs,1,80,00,000/-, No.486 in default, SI for 5/11) three months and compensation of Rs.1,50,00,000 to Kalapi DCP out of the fine of Rs.1,80,00,000
7. It is the case that such a condition ought not to be imposed keeping in view the special facts of the case which include civil litigation in the form of Summary Suit before the Commercial Court, which is also challenged before this Court. The other ground is financial difficulties in the present time of Covid pandemic situation.
7.1 While on the other hand, the original complainant has challenged the very clause contending the same to be against the very provision of law for imposing condition by referring to Section 148(3) of the Act.
8. Learned Senior Advocate for the applicants-accused in Criminal Misc.Application No.18334 of 2020 and group matters at the outset submitted that the applicant is facing trying time in view of the present situation of pandemic which has affected the business and it would be virtually impossible for the applicant to Page 8 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT deposit such a huge amount and therefore, condition imposed is to harsh and therefore, requests that the same be deleted. It is submitted that by recording conviction of the applicant, the trial Court was pleased to impose fine of Rs.1,80,00,000/- and it is now ordered to pay an amount of Rs.1,50,00,000/- towards compensation as provided under Section 357 of the Criminal Procedure Code and while suspending the sentence and enlarging the applicant on bail, it is by the impugned condition, ordered to deposit 20% of the cheque amount. Therefore, the applicant is to face double jeopardy as the applicant is to pay twice the amount. It is therefore submitted that on one hand, a huge fine has been imposed in crores of rupees and on the other hand, it is ordered to deposit 20% of the disputed cheque, which is also running in lakhs of rupees, which is a huge financial burden upon the applicant in the present time of Covid pandemic.
8.1 Learned Senior Advocate for the applicant-accused also tried to convince the Court on merits by submitting that the cheques in question were towards security with regard to land transaction, which the complainant was to undertake with the accused person so that the amount to be paid to the concerned land owners is secured. However, such cheques have also been deposited by the complainant with malafide intention and knowing full well that the cheques in question are issued towards security and would therefore be dishonoured.
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R/CR.MA/18334/2020 JUDGMENT 8.2 It is submitted that against the applicant-accused,
similar other complaints adopting similar modus have been filed by the complainant by giving exaggerated figures and therefore, the appellate Court ought to have taken this aspect into consideration while imposing condition of bail.
8.3 It is also submitted that the Courts below have not properly considered the conduct of the original complainant, who from the very beginning was having an intention to cheat the applicants-accused because behind the back of the applicants- accused when the payment was made to the applicants-accused, it was noted as loan transaction and on the other hand, when the transaction had taken place with the original land owners, sale deed has been executed in favour of family members of the original complainant-original complainant herein and payment has been made to the original land owners in cash. It is submitted that when the original complainant had done is that for the transaction with the original land owners, amount has been deposited in the account of the applicants herein, out of which, there would be part of it i.e. some portion had to be given to the farmers and remaining thereof would be given back to the person of the original complainant. It is further submitted that even except the transactions mentioned in the complaint filed by the original complainant, there are other transactions from the back of the original complainant herein to the bank of the applicants herein, which falsify the story put forward by Page 10 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT the original complainant herein and the said fact is also reflected in the bank statement of the applicants-accused. It is, therefore, submitted that from the very beginning, the modus operandi of the original complainant herein was to cheat the applicants and pocket entire amount and did not want to give any amount as agreed between the parties, wherein he had succeeded. Even during trial also, the authorized person of the Company has been examined, whereas the Director of the Company viz., Jayant Sanghavi was never summoned for giving his version. It is further submitted that as per the Company Law, one Company can give loan to another Company, however, not to any individual person and in the facts of the present case, it is clear that the Company of the original complainant had given loan to the individual i.e. the applicants herein, however, the said aspect has not been properly considered by the learned Courts below, which adversely affects the rights of the applicants herein. Therefore, considering the facts of the present case, the impugned conditions may be deleted. 8.4 Learned Senior Advocate for the applicant-accused emphatically submitted that the entire premise of initiating the proceedings under the Act is missing as there was no loan transaction as is canvassed in the complaint. Attention if drawn to the observations made by the High Court while dealing with proceedings of Summary Suit initiated with regard to the very same transaction and cheques before the Commercial Court. It is Page 11 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT submitted that the conduct of the complainant is strangulating the applicant-accused from doing any type of commercial business as with regard to same cheques, proceedings of various nature at various forums have been initiated to demonstrate the Shylockian attitude of the complainant.
8.5 It is submitted that the provision of law relating to imposing of condition under Section 143 has to be treated as directory and not mandatory.
9. As against this, learned Advocate for the original complainant-respondent No.2 in Criminal Misc.Application No.18334 of 2020 and group matters submitted that the order impugned is correct in so far as directing deposit of amount by the applicant is concerned and therefore the challenge by the applicant must necessarily fail. It is submitted that in fact there is severe prejudice and loss caused to the original complainant due to the applicants being directed to deposit only 20% of the cheque amount and not a higher amount linked to the fine which was required looking to the facts and circumstances of the present case. It is further submitted that an application being a Criminal Miscellaneous Application has been preferred by the original complainant before this Hon'ble Court, whereby, the original complainant has sought the modification of the order of the Sessions Judge dated 01.10.2020 and to suitably enhance the amount to be deposited by the applicants-original accused as a Page 12 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT percentage of the fine or compensation awarded by the trial Court. 9.1 It is submitted that the observations of this Court in its order dated 31.07.2013 passed in Special Civil Application No. 8894 of 2013 as averred and Interpreted by the applicants herein in para 2.7 of the captioned application are misleading and fallacious in nature. | further say and submit that what were actually the arguments of the learned Advocate for the applicants in Special Civil Application No. 8894 of 2013 have been deviously portrayed as the observations of this Court only with a view to create a false merit in the captioned application. I also say and submit the parameters to determine a conditional leave to defend in a summary suit before a Trial Court are different and do not have a bearing on the parameters that would determine the ingredients of offence under Section 138 of the Ni Act. At the time of the hearing of the Special Civil Application No. 8894 of 2013, the evidence pertaining to the criminal case preferred by the Respondent no. 2 under Section 138 of the NI Act had not come on record and also the same had not been appreciated by the Ld. Trial Court thereby, making the observations of the Ld. Magistrate in the order dated 12.03.2020 convicting the applicants herein independent of the summary suit initiated against the applicants before the Ld. Trial Court. That further the observations by this Hon'ble Court are at an interim and preliminary stage. The deponent submits that in fact telling the judgment in the summary Page 13 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT suit has been pronounced on 09.12.2020 and the same is categorically in favour of the Respondent No. 2. The deponent submits that the Ld. Principal 'Senior Civil Judge, Commercial Court has decreed that the 'Respondent No. 2 is entitled to recover the principal amount of Rs. 4,50,25,000/along with interest @ 6% from the applicant-accused. The trial Court has further rejected the counterclaim of the applicant-accused holding that the applicant has failed to prove the claim.
9.2 It is further submitted that present petition is itself not maintainable and the prayers made by the applicants-accused herein are required to be rejected in the light of ratio laid down by the Hon'ble Apex Court in the case of Surinder Singh Deswal and Ors. Vs. Virender Gandhi reported in (2019) 11 SCC 341. That considering the intent of the legislation and the ratio laid down by the Hon'ble Apex Court, the condition supposed to be Imposed. while suspending the sentence by the Appellate Court is a "minimum" 20% of the fine/penalty imposed by the Ld. Lower Court. That the Hon'ble Apex Court was pleased to hold that the provisions of Section 357(2) of CrPC would have no applicability to the proceedings under the NI Act and that further the word "may" in Section 148 of the NI Act is to be read as "shall and that a direction not to deposit any amount is an exception for which special reasons are to be assigned. The deponent submits that the applicant has not brought anything on record to indicate the Page 14 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT special reasons why such an order is required to be passed and in fact the facts and circumstances and the conduct of {ne applicant in fact indicate that the order passed by the Ld, Sessions Judge is in fact required to be enhanced, for which the Respondent No. 2 has already moved an appropriate application. That on bare interpretation of the prayer of the present application sought by the applicants herein, the same is in stark contradiction of provisions of the NI Act and guidelines laid down by the Apex Court.
10. Having considered the rival submissions of learned Advocates for the parties, the question that comes up for consideration is the order of the appellate Court with regard to deposit of the amount as provided under Section 148 of the Act. The grounds which have been elaborately argued by both the sides are on merits, especially contention raised by the accused side about invoking of provisions of Section 138 of the Act in the facts of this case with due regard to other litigation in the form of Summary Suit and the arguments advanced in this regard. The Court does not deem it fit to enter into it on merits as the main appeals are still pending before the appellate Court which will, in due course, have to examine such contentions raised and answered by the respective parties.
11. It is also pertinent to observe that even in the summary proceedings, the Commercial Court has allowed the application of Page 15 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT the complainant, which is reportedly subject matter of challenge in a separate proceeding before this Court and hence also, this Court refrains from entering into the issue of the findings, if any, given in favour of any of the parties while dealing with Summary Suit proceedings by the Commercial Court.
12. For the purpose these applications, what is relevant is application of Section 148 of the Act, which reads as under:-
"148. Power of Appellate Court to order payment pending appeal against conviction. - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit1 such sum which shall be a minimum of twenty percent of the fine or compensation awarded by the trial Court:
Provided that the amount payable under this sub- section shall be in addition to any interim compensation paid by the appellant under section 143A.
(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.
(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:
Provided that if the appellant is acquitted, the Court Page 16 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant."
13. The facts which are not in dispute are that the complainant herein preferred a criminal complaint against the accused under Section 138 of the Act for a cheque bearing cheque no.35075 for a total amount of Rs.1,05,00,000/-. The said complaint was registered vide Criminal Case No.48441 of 2011. Upon completion of trial, the learned 14th Additional Chief Judicial Magistrate was pleased to convict the respondent no.2 and 3 vide order and judgment dated 12.03.2020 and the respondents herein were ordered to undergo 2 years of simple imprisonment and the learned Judge further imposed penalty of Rs.1,80,00,000/- and in default of payment, the respondents were directed to undergo more than 3 months of imprisonment. That it was further directed that out of the amount of Rs.1,80,00,000/- paid by the accused, Rs.1,50,00,000/- would be paid to the applicant (original complainant) as compensation. Since the learned Trial Court after examining all the oral as well as documentary evidence, was pleased to confirm that the said cheques in question was with respect to legally enforceable debt payable to the applicant herein. Page 17 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021
R/CR.MA/18334/2020 JUDGMENT Hence, the respondents herein have been found guilty of
committing offence under Section 138 of the Act. Being aggrieved and dissatisfied by the order and judgment dated 12.03.2020 passed by the 14th Additional chief Judicial Magistrate in Criminal Case No.48441 of 2011, the respondent nos.2 and 3 preferred an appeal being Criminal Appeal No.133 of 2020 before the learned Sessions Court along with an application for suspension of sentence below Exh.4. The Sessions Court passed the order dated 01.10.2020 below Exh.4 in Criminal Appeal No.133 of 2020 for suspension of sentence (herein after referred to as "impugned order"), whereby the said learned Court was pleased to allow the application and suspended the sentence passed by the learned Trial Court by imposing certain conditions amongst which condition nos.2, 3 and 4 are reproduced herein under:-
"2 Order passed by the learned Trial Court in
Criminal Case No.48441 of 2011 (Old CC
No.4865/2011) dated 12.03.2020 is hereby suspended till final disposal of appeal on submissions of surety bond of Rs.25,000/- and personal bond of like amount.
3. The applicants are directed to deposit 20% amount of the disputed cheque before the Nazir of this Court.
4. The applicants are further directed to pay Rs.10,000/- towards the cost to original complainant and present respondent no.2"
14. Section 148 came to be inserted by Amendment Act 20 Page 18 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT of 2018. It is nobody's case that the said amendment is not applicable to the facts of the case and as such, the accused has also not raised this issue and hence, proceedings on the footing that Section 148 is squarely applicable to the facts of the case. The new Act came into effect from September 2018 by the Negotiable Instruments (Amendment) Bill, 2017. The Court would refer to the Statement of Objects and Reasons, which read as under:-
"The Negotiable Instruments Act, 1881 (the Act) was enacted to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques. The said Act has been amended from time to time so as to enforceable provide, inter alia, speedy disposal of cases relating to the offence of dishonour of cheques. However, the enforceable Central Government has been receiving several representations from the public including trading community relating to pendency of cheque dishonour cases. This is because of delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings. As a result of this,enforceable injustice is caused to the payee of a dishonoured cheque who has to spend considerable time and resources in court proceedings to realise the value of the cheque. Such delays compromise the sanctity of cheque transactions.
2. It is proposed to amend the said Act with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save Page 19 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT time and money. The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy.
3. It is, therefore, proposed to introduce the Negotiable Instruments (Amendment) Bill, 2017 to provide, inter dishonor alia, for the following, namely:--
(i) to insert a new section 143A in the said Act to provide that the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case, where he pleads not guilty to the a ccusation made in the complaint; and in any other case, upon framing of charge. The interim compensation so payable shall be such sum not exceeding twenty per cent. of the amount of the cheque; and
(ii) to insert a new section 148 in the said Act so as to provide that in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial court.
4. The Bill seeks to achieve the above objectives."
15. The Apex Court in case of Surinder Singh Deswal alias Colonel S.S.Deswal & Ors. Vs. Virender Gandhi, reported in (2019) 11 SCC, 341 has given meaning to Section 148 to be in Page 20 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT furtherance of the objects and reasons of the Amendment Act and has proceeded to hold as under:-
"7.1 Having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction Under Section 138 of the N.I. Act, is conferred with the power to direct the convicted Accused - Appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. By the amendment in Section 148 of the N.I. Act, it cannot be said that any vested right of appeal of the Accused - Appellant has been taken away and/or affected. Therefore, submission on behalf of the Appellants that amendment in Section 148 of the N.I. Act shall not be made applicable retrospectively and more particularly with respect to cases/complaints filed prior to 1.9.2018 shall not be applicable has no substance and cannot be accepted, as by amendment in Section 148 of the N.I. Act, no substantive right of appeal has been taken away and/or affected. Therefore the decisions of this Court in the cases of Garikapatti Veeraya (supra) and Videocon International Limited (supra), relied upon by the learned senior Counsel appearing on behalf of the Appellants shall not be applicable to the facts of the case on hand. Therefore, considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act stated hereinabove, on purposive Page 21 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT interpretation of Section 148 of the N.I. Act as amended, we are of the opinion that Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence Under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence Under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the N.I. Act would be frustrated. Therefore, as such, no error has been committed by the learned first appellate court directing the Appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court considering Section 148 of the N.I. Act, as amended.
8. Now so far as the submission on behalf of the Appellants that even considering the language used in Section 148 of the N.I. Act as amended, the appellate Court "may" order the Appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court and the word used is not "shall" and therefore the discretion is vested with the first appellate court to direct the Appellant - Accused to deposit such sum and the appellate court has construed it as mandatory, which according to the learned Senior Advocate for the Appellants would be contrary to the provisions of Section 148 of the N.I. Act as amended is concerned, considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the N.I. Act, though it is true that in Page 22 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT amended Section 148 of the N.I. Act, the word used is "may", it is generally to be construed as a "rule" or "shall" and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 of the N.I. Act confers power upon the Appellate Court to pass an order pending appeal to direct the Appellant-Accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the Appellant-Accused Under Section 389 of the Code of Criminal Procedure to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 of the N.I. Act, a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the appellate court for sufficient cause shown by the Appellant. Therefore, if amended Section 148 of the N.I. Act is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 of the N.I. Act, but also Section 138 of the N.I. Act. Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of the dishonoured of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonoured cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque who has to spend considerable time and resources in the court Page 23 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT proceedings to realize the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions, the Parliament has thought it fit to amend Section 148 of the N.I. Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Section 138 of the N.I. Act.
9. Now so far as the submission on behalf of the appellants,realize relying upon Section 357(2) of the Cr.P.C. that once the appeal against the order of conviction is preferred, fine is not recoverable pending appeal and therefore such an order of deposit of 25% of the fine ought not to have been passed and in support of the above reliance placed upon the decision of this Court in the case of Dilip S. Dhanukar (supra) is concerned, the aforesaid has no substance. The opening word of amended Section 148 of the N.I. Act is that "notwithstanding anything contained in the Code of Criminal Procedure.....". Therefore irrespective of the provisions Hanuka of Section 357(2) of the Cr.P.C., pending appeal before the first appellate court, challenging the order of conviction and sentence 20 under Section 138 of the N.I. Act, the appellate court is conferred with the power to direct the appellant to deposit such sum pending appeal which shall be a minimum of 20% of the fine or compensation awarded by the trial Court."
16. The law, therefore, on the aforesaid subject being crystal clear, the Court has no hesitation in holding that the 2nd Additional District & Sessions Judge, Vadodara has committed an Page 24 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT error in operative part of the order in Clause-3, directing the applicant-accused to deposit 20% amount of the disputed cheque before the Nazir of the Court and hence, to that extent the impugned order needs to be interfered with to read that, "the accused is directed to deposit 20% amount of the compensation as per the order of the trial Court, viz. 14 Th Additional Chief Judicial Magistrate, Vadodara dated 12.03.2020.
17. The provisions of Section 148 of the Act use phrase as under:-
" .....the Appellate Court may order the appellant to deposit1 such sum which shall be a minimum of twenty percent of the fine or compensation awarded by the trial Court...."
18. In the instant case, the trial Court has awarded fine of Rs.1,80,00,000/- along with simple imprisonment for two years and at the same time, has awarded compensation of Rs.1,50,00,000/- by invoking Section 357 of the Criminal Procedure Code.
19. The language of Section 138 of the Act provides for the punishment 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. Therefore, the word used in Section 138 is "fine" and therefore, discretion is available to the Court under Section 148 to impose condition for preferring an appeal to deposit minimum of 20% of the "fine" or "compensation" awarded by the Page 25 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT trial Court.
20. The Court is of the opinion that in a given facts of the case, where accused person is facing convictions in 9 complaints and in each of these complaints, accused has faced conviction, wherein fine is separately imposed and compensation is also separately imposed, therefore, considering the financial crunch that the accused will have to face in this trying time, the Court deems it fit to directed the accused to deposit 20% of compensation instead directing to deposit 20% of the fine imposed. The Court has also taken into consideration the submission made on behalf of the accused regarding financial inability to arrange for such huge deposits in these appeals. However, considering the documents placed on record along with evidence led before the trial Court in the form of deposits, more particularly evidence of accused- Chandrakant D.Patel at Exh.152, wherein turnover of the company at the relevant time only with the complainant company was to the tune of Rs.120 crores, which may lead to presume the financial strength of the accused. Over and above, in the pleadings before this Court, nothing has come on record which could establish financial crises which the accused side is facing. The application Exh.4 filed under Section 389(3) of the Criminal Procedure Code also does not plead of any grave financial difficulties being faced by the accused. The complainant side has argued to exercise discretion to enhance the amount of pre-appeal deposit to more Page 26 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT than 20% in view of the discretion available under the provision itself, which provides for minimum of 20% and there being scope of imposing more than 20%. It has been argued that considering the length of time for which the litigation has been dragged, it is a case enhancing the deposit from 20% to more than 20% as per the discretion of this Court. Considering the overall fact situation, where the accused person is ordered to pay fine of Rs.1,80,00,000/- in one of the 9 complaints and similar amount ordered to be paid as fine over and above this, an amount of Rs.1,50,00,000/- awarded as compensation under Section 357 of the Criminal Procedure Code and what has been brought on the record of this case regarding decree issued by the Commercial Court in Commercial Civil Suit No.43 of 2919 dated 09.12.2020 holding the plaintiff company to entitle to recover Rs.4,50,25,000/- with accrued rate of interest at the rate of 6% from 26.10.2012 till realization of the full amount, in the facts of this case, the Court does not deem it fit to enhance the amount of deposit to more than 20% of the compensation awarded and hence, no interference on that count.
21. In view of the aforesaid, Criminal Misc.Application Nos.18334 of 2020, 18404 of 2020, 18425 of 2020, 18410 of 2020, 18374 of 2020, 18411 of 2020, 18407 of 2020, 18409 of 2020 and 18371 of 2020 filed by the accused are hereby dismissed. Rule is discharged. The applications filed by the complainant being Criminal Misc.Application Nos.19499 of 2020, 19560 of 2020, Page 27 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021 R/CR.MA/18334/2020 JUDGMENT 19497 of 2020, 19455 of 2020, 19459 of 2020, 19461 of 2020, 19553 of 2020, 19551 of 2020 and 19555 of 2020 are hereby allowed to the aforesaid extent. Rule is made absolute.
22. At this stage, learned Advocate Mr.Maulin Pandya requests that the period for depositing the amount as per the order of the first appellate Court be reasonably extended considering the present situation as well as financial condition. The request being reasonable, the time period to deposit the amount as per the direction of the first appellate Court under the impugned order is extended by three months from today.
Sd/ (A.Y. KOGJE, J) SHITOLE Page 28 of 28 Downloaded on : Wed Aug 25 07:44:23 IST 2021