Karnataka High Court
Sri. Munivenkatappa vs N. A. Nagaraju on 30 August, 2024
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2024:KHC:35059
CRL.P No. 7967 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF AUGUST, 2024
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CRIMINAL PETITION NO. 7967 OF 2022
BETWEEN:
SRI MUNIVENKATAPPA
S/O LATE MUNISWAMAPPA,
AGED ABOUT 70 YEARS,
RESIDING AT NO. 105,
DASARAHALLI,
HEBBAL POST,
BENGALURU - 560 024.
...PETITIONER
(BY SRI GURU PRASAD C. REDDY, ADVOCATE)
AND:
Digitally signed
N. A. NAGARAJU
by NAGAVENI S/O. LATE ANNAYAPPA,
Location: HIGH AGED ABOUT 72 YEARS,
COURT OF
KARNATAKA R/O. MALENALLASANDRA,
JIGANI HOBLI,
BANNERGHATTA POST,
ANEKAL TALUK,
BENGALURU - 560 105.
...RESPONDENT
(BY SRI UMESH S., ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF CR.P.C.,/ 528 OF BNSS PRAYING TO 1. SET ASIDE THE
ORDER DATED 22.07.2022 PASSED ON APPLICATION FILED
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NC: 2024:KHC:35059
CRL.P No. 7967 of 2022
U/S 143A (2) IN C.C.NO.20456/2021 PENDING BEFORE THE
18th ACMM, BANGLAORE CONSEQUENTLY; 2. ALLOW THE
APPLICATION FILED BY THE PETITIONER U/S 143A (2) IN
C.C.NO.20456/2021 BEFORE THE 18th ACMM, BANGALORE.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA
ORAL ORDER
Petitioner is before this Court calling in question an order dated 22.07.2022 passed on an application filed under Section 143A(2) of the Negotiable Instruments Act ('NI Act' for short) by the petitioner-complainant in the case at hand.
2. Heard Sri Guruprasad C Reddy, learned counsel appearing for petitioner and Sri Umesh S, learned counsel appearing for respondent.
3. The facts in brief, germane, are as follows:
The complainant and the respondent-accused have a transaction. In furtherance of the said transaction it transpires that a cheque was issued by the respondent-accused in favour -3- NC: 2024:KHC:35059 CRL.P No. 7967 of 2022 of the petitioner. The cheque was dishonoured on account of it being a non-CTS cheque. The complaint is registered by the petitioner before the learned Magistrate involving Section 200 of the Cr.P.C. The matter is pending as C.C.No.20456 of 2021.
4. The issue in the lis does not concern the merit of the matter. The complainant files an application under Section 143A(2) of the NI Act seeking interim compensation at 20% of the cheque amount as obtaining under the statute from the respondent-accused. The accused files his objections. The application comes to be rejected on 22-07-2022, the rejection of which has driven the petitioner to this Court in the subject petition.
5. Learned counsel for petitioner submits that the application could not have been rejected on getting into the merit of the matter. The parameters of consideration of the application is considered by this Court in plethora of cases. He would seek reconsideration of the application at the hands of the concerned Court.
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NC: 2024:KHC:35059 CRL.P No. 7967 of 2022
6. Learned counsel for the respondent-accused though would defend the order that is passed by the concerned Court, would however submit that it is not in consonance with the guidelines so laid by this Court in the case of V.KRISHNAMURTHY v. DAIRY CLASSIC ICE CREAMS. reported in 2022 SCC OnLine KAR 1047.
7. I have given my anxious consideration to the submissions made by the respective learned counsel for the parties and have perused the material on record.
8. The afore-narrated facts are not in dispute. An application has been filed by the petitioner under Section 143A of the NI Act seeking 20% of the cheque amount as interim compensation during the pendency of the proceedings before the concerned Court. That comes to be rejected by the following order:
".... .... ....
09. The learned counsel for the complainant by relying several judgments has contending that, the complainant has complied all the ingredients of the section 138 of N.I.Act. Therefore, the presumption has to be drawn in favour of the complainant under section 118 and 139 of N.1.Act. The contention raised by the accused can not be looked in to at this stage and it requires a trial. Hence, he prays to allow the application. On the other -5- NC: 2024:KHC:35059 CRL.P No. 7967 of 2022 hand, learned counsel for the accused contending that, the alleged debt is a time barred debt as such cheque issued for a time barred debt is not attracted section 138 of N.I.Act. Hence, question of directing the accused to deposit the interim compensation amount does not arise at all.
10. As per the complainant averment, the complainant has lent amount of Rs.20,00,000/- to the accused on different dates in and around in the month of August 2012. The complainant also claims that, in the month of February 2021 the accused has issued cheque in question for repayment of the aforesaid amount. Prima facie it appears that, as on the date of the cheque the alleged debt is time barred debt. As per the judgment of Hon'ble High Court of Karnataka in the Bidar Urban Co- Operative Bank Ltd Vs Mr.Girish in Criminal Appeal No.200057/2016 has held that, cheque issued for a time barred debt would not attract section 138 of N.I.Act. Further, there is no written agreement for executed by the accused after expiry of three years period of limitation as per the section 25(3) of Indian Contract Act. No doubt, the issue of limitation is a triable issue. But, in the present the complainant himself admitted that, he has lent amount in the month of August 2012 and accused issue a cheque in the month of February 2021. Hence, nothing has been left to unearth in the trial regarding the limitation issue. Therefore, for these reasons I am of the opinion that the application filed by the complainant under section 143A of NI Act deserves to be dismissed. Accordingly, I proceeds to pass following;
ORDER Application under section 143 A(1) of the NI Act, filed by the complainant is dismissed. No order as to cost. For Cross of PW-1 by 22.08.2022."
The order rejecting the application runs foul of the judgment rendered by this Court in the case of V.KRISHNAMURTHY v. DAIRY CLASSIC ICE CREAMS wherein this Court in -6- NC: 2024:KHC:35059 CRL.P No. 7967 of 2022 Crl.P.No.632 of 2022, in terms of its order dated 01-06-2022 holds as follows:
"13. Application of mind and passing of a reasoned order of grant of compensation becomes necessary in the light of penal consequences that ensue an accused who failed to comply with the order granting 20% compensation as the complainant is given several remedies of recovery which result in the accused being taken into custody. Therefore, such orders which result in such penal consequences should be rendered giving cogent reasons which would demonstrate application of mind and such orders should be passed only after hearing the accused in the matter. In cases where the learned Magistrate is to exercise discretion, such discretion should become two fold.
First fold: Where an application is so made, the learned Magistrate has to apply his mind whether such an application is to be considered at all, as every application that is made need not result in grant of 20% interim compensation. Several factors need be gone into for considering such applications bearing in mind the reason and backdrop of the amendment. As quoted herein-above the bedrock of the amendment was to stall unscrupulous drawers of cheques drawing proceedings with frivolous applications, absenting themselves, seeking continuous adjournments causing delay and grave prejudice to the case of the complainants. In these factors, the learned Magistrate after analyzing the conduct of the accused should grant compensation which would vary from 1% to 20% after recording reasons.
In a given case if the accused is cooperating with the trial without seeking any unnecessary adjournments, not absenting himself or his counsel on any date and cooperating with the conclusion of the trial in such cases, the learned Magistrate will have to apply his mind, exercise his discretion as to whether such applications should be entertained at all. Therefore, it forms two classes of litigants. One who would cooperate with the proceedings and the other who would not. In cases where there is complete co-operation from the hands of the accused in the trial, the Court may consider whether -7- NC: 2024:KHC:35059 CRL.P No. 7967 of 2022 interim compensation has to be granted at all and in cases where there is no cooperation on the part of the accused, the Court may proceed to consider the application.
Second fold: The second fold of discretion in any given case , the compensation may vary from 1% to 20%. It is nowhere depicted in the statute that the amount of interim compensation should be of a particular figure. It can vary from 1% to 20%. It is this variance that gives the learned Magistrate power to exercise discretion to grant such compensation. The mandate of the statute is that it should not exceed 20%. In the cases where learned Magistrate proceeds to grant compensation, has to bear in mind the amount involved in the instrument, as certain transactions would run to several cores and the accused may have formidable defence against the complainant. In such cases, the learned Magistrate should exercise discretion in a cautious manner. Here again the conduct of the accused should be noticed. Therefore, the aforesaid two fold discretion is sine qua non for an order to be passed by the learned Magistrate while considering the application under Section 143A of the Act."
In view of the judgment as afore-quoted, the application requires reconsideration at the hands of the concerned Court.
9. For the aforesaid reasons, the following:
ORDER
(i) Criminal Petition is allowed.
(ii) Impugned order dated 22-07-2022 passed by the XVIII Additional Chief Metropolitan -8- NC: 2024:KHC:35059 CRL.P No. 7967 of 2022 Magistrate, Bangalore in C.C.No.20456 of 2021 stands quashed.
(iii) The application shall be reconsidered by the concerned Court directly in consonance with the law as laid down by this Court in the case of V.KRISHNAMURTHY v. DAIRY CLASSIC ICE CREAMS.
(iv) It is needless to observe that the concerned Court shall not be influenced by what it has already observed in its earlier order.
Sd/-
(M.NAGAPRASANNA) JUDGE BKP List No.: 2 Sl No.: 53