The Single Bench of the Delhi High Court in the case of M/S Takshila Retail Pvt Ltd & Anr. vs State & Anr. consisting of Justice Chandra Dhari Singh while hearing a batch of petitions u/s 482 CrPC observed that Section 148 of the Negotiable Instruments Act, 1881 (“the NI Act”) can be applied retrospectively.
Facts
A short-term loan agreement was entered into by the respondent no. 2 (Galaxy Datamatics Pvt. Ltd) and the accused no. 1, accused no. 2 (Dinesh Sehgal) and accused no. 3 (Harsh Sehgal) for a short-term loan of Rs. 5 Crores for three months at interest of 24% per annum. The parties also agreed for execution of an irrevocable and unconditional personal guarantee of the accused no. 2 and 3, jointly and severally. The accused were to pay a penal interest of 3% per month in case of default of repayment. For repayment, the accused issued a cheque for Rs. 5 Crores and when presented it was returned dishonoured with the remarks “Insufficient Funds”. Statutory Notice was sent by respondent no. 2 to the accused and a complaint case u/s 138 of the NI Act was filed.
Procedural History
The Metropolitan Magistrate sentenced the accused nos. 2 and 3, to undergo simple imprisonment for one year along with fine of Rs. 7.5 Crores to be paid jointly and severally by all the convict persons, as compensation and in default of which simple imprisonment for three months. The accused filed an application u/s 389 CrPC for suspension of sentence for the purpose of filing an appeal against the conviction order. The accused, thereafter, approached the Court of learned Additional Sessions Judge against the judgment and order on sentence. The learned ASJ suspended the order of sentence passed by the learned Trial Court for the period of pendency of the appeal. During the pendency of the appeal, an application was filed by respondent no. 2 u/s 148 of the NI Act which was strongly opposed on behalf of the accused for not being maintainable. The learned ASJ directed the accused to deposit 20% of the fine/compensation amount to be deposited in the form of FDR in the favour of the complainant failing which the condition of suspension of sentence would stand vacated. The petitioners (accused) are assailing this order passed by the learned ASJ.
Contentions Made
Petitioner: The appeal had been filed before Sections 148 and 143A of the NI Act came into force, so, the matter did not fall in the ambit of the same. A discretion is to be exercised by the Court concerned while imposing the condition of payment of 20% of the fine/compensation. The order of cancellation/vacation of the suspension order in case of non-deposit was made after about four years, which is against the principles as established by law. Even if the petitioners are directed to pay the fine/compensation amount, the period warranted under the provision is 60 days which may be extended for a period of 30 days, however, the Appellate Court granted only a month’s time for the same. So, the order is liable to be set aside.
Respondent: Application filed u/s 148 of the NI Act was maintainable as per the law laid down under the Act and as per the interpretation of the Hon’ble Supreme Court in many cases.
Observations of the Court
The Bench noted that the Hon’ble Supreme Court in G.J. Raja v. Tejraj Surana established that Section 148 is retrospective in nature.
It was noted that the only implication of the amendment is that some part of the amount of fine/compensation, which is accruing towards the complainant, is directed to be paid against the convict/appellant and in favour of the complainant. This was done since that appellant has been convicted u/s 138 and his guilt under the offence has already been established. So, if a nominal fine is imposed upon the appellant, it cannot be seen to be an unfair and unreasonable penalization or taking away of substantive right of the convict/appellant.
It was further noted that bail or suspension of sentence does not stand automatically cancelled in cases where a fine or compensation has been levied on the appellant u/s 148 and is not deposited by him as per the directions of the Court concerned. The learned ASJ did not have the power to touch upon the basic relief granted to the appellant by suspension of sentence and overturn it completely vide the impugned order when the suspension of sentence was already in operation and was passed four years prior to the impugned order.
Judgment
The Bench noted that the learned ASJ was not wrong in adjudicating upon an application u/s 148 at the given stage and imposing the cost/fine/compensation of 20% of the amount imposed by the learned Trial Court. However, it was found that the order passed was impermissible by law and not in accordance with the statute, since, firstly, the period prescribed for depositing fine awarded under the provision is of sixty days which may be extended for thirty days, yet the learned ASJ only granted a period of one month to the petitioners to deposit 20% of the fine/compensation in favour of the complainant, and secondly, imposing the condition of vacation of suspension of substantive sentence amounted to a review of its own order which is unsustainable by law.
The learned ASJ while passing the impugned order and imposing the condition of vacation of suspension of sentence, in absence of extraordinary and exceptional circumstances, exceeded its powers. So the order, being contrary to law and illegal, was set aside.
Case: M/S Takshila Retail Pvt Ltd & Anr. vs State & Anr.
Citation: CRL.M.C. 702/2022 & CRL.M.A.2998/2022
Bench: Justice Chandra Dhari Singh
Decided on: 13th May 2022
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