Delhi High Court
Haryana Petrochemicals Ltd. vs Indian Petrochemicals Ltd. & Anr. on 10 December, 2014
$~15 to 17
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 20.11.2014
Judgment delivered on : 10.12.2014
+ CRL.REV.P. 619/2012 and Crl. M.A. Nos.10672-74/2014
HARYANA PETROCHEMICALS LTD.
..... Petitioner
Through Mr. Tanvir Ahmed Mir, Adv.
versus
INDIAN PETROCHEMICALSLTD & ANR.
..... Respondents
Through Mr. Aman Lekhi, Sr. Advocate with Mr.
Manoj Arora and Mr. Siddharth
Shankar, Advs. for R-1.
Mr. Navin K. Jha, APP for the State.
+ CRL.REV.P. 620/2012 and Crl. M.A. Nos.18490/2012 & 10649-
51/2014
HARYANA PETROCHEMICALS LTD.
..... Petitioner
Through Mr. Tanvir Ahmed Mir, Adv.
versus
INDIAN PETROCHEMICALSLTD & ANR.
..... Respondents
Through Mr. Aman Lekhi, Sr. Advocate with Mr.
Manoj Arora and Mr. Siddharth
Shankar, Advs. for R-1.
Mr. Navin K. Jha, APP for the
State.
+ CRL.REV.P. 621/2012 and Crl. M.A. Nos.18493/2012 & 10654-
56/2014
Crl. Rev.P. Nos.619/2012, 620/2012 & 621/2012 Page 1 of 18
HARYANA PETROCHEMICALS LTD.
..... Petitioner
Through Mr. Tanvir Ahmed Mir, Adv.
Versus
INDIAN PETROCHEMICALSLTD & ORS.
..... Respondents
Through Mr. Aman Lekhi, Sr. Advocate with Mr.
Manoj Arora and Mr. Siddharth
Shankar, Advs. for R-1.
Mr. Navin K. Jha, APP for the State.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J.
1 By this common judgment three revision petitions shall be
decided. Parties are common; Haryana Petrochemical Ltd. and its
Managing Director Rajiv Aggarwal are the revisionists before this
Court; the respondent/complainant is Indian Petrochemicals Ltd.
A. Criminal Revision Petition No.619/2012 has impugned the
judgment dated 19.5.2012 which had endorsed the finding of
the Magistrate qua the conviction of the petitioners under
Section 138 of the Negotiable Instruments Act, 1881 (the Act).
The petitioner company had been sentenced to pay
compensation in the sum of Rs.40 lacs to the complainant, in
default of payment of compensation to undergo SI for six
months.
B. Criminal Revision Petition No.620/2012 has impugned the
judgment and order of sentence dated 19.5.2012 which had
endorsed the finding of the Magistrate qua the conviction of
the petitioners under Section 138 of the Act. The petitioner
company had been sentenced to pay compensation in the sum
of Rs.1 crore to the complainant, in default of payment of
compensation to undergo SI for six months.
C. Criminal Revision Petition No.621/2012 has impugned the
judgment and order of sentence dated 19.5.2012 which had
endorsed the finding of the Magistrate qua the conviction of
the petitioners under Section 138 of the Act. The petitioner
company had been sentenced to pay a compensation of Rs.70
lacs to the complainant, in default of payment of compensation
to undergo SI for six months.
2. The fact of these cases disclose that the complainant company i.e.
Indian Petrochemicals Ltd. had business dealings with the petitioner
company i.e. Haryana Petrochemicals Ltd. They were dealing in the
sale and purchase of chemicals. Complainant company was
manufacturing and supplying the chemicals DMT and MEG which the
petitioner company was purchasing from the complainant company.
The cheques given in lieu of these transactions had been dishonoured.
The Magistrate on the basis of the evidence led before him had
convicted the petitioner under Section 138 of the Act. The Sessions
Judge had endorsed this finding and the order of sentence in each of the
individual cases as noted supra.
3 Detailed submissions have been made by the learned counsel for
the petitioners. Counter submissions have also been made. Besides oral
arguments written submissions have also been filed by the respective
parties.
4 The last submission made by the learned counsel for the
petitioners shall be answered first. This relates to the authorization
given to Deepak Rai Srivastava (PW-3) to file the present complaint;
submission being that this complaint was admittedly filed in September,
1995 on the basis of an authorization letter (dated 26.9.1995) given to
Deepak Rai Srivastava by the company but there was no resolution
accompanying this authorization; the power of attorney Ex.PW-3/B
(dated 23.3.1999) exhibited in the testimony of PW-3 clearly shows that
this document is of the year 1999 and as such the complaint filed in
September, 1995 being without any valid authorization necessarily be
treated as non est. This submission has been refuted and rightly so.
5 At the outset, this Court notes that this argument was not taken
either before the Magistrate or before the Sessions Judge. Although in
written ground (H) in the grounds of appeal filed before the Sessions
Judge this ground finds mention yet the Sessions Judge has not
answered; this is for the reason that this was not argued before the
Sessions Court at that stage. Be that as it may, this Court notes that
PW-3 in his deposition on oath in Court had stated that he was
authorized by the company to file the present complaint. The
authorization is dated 26.9.1995. This letter of authorization clearly
mentioned the resolution passed by the company authorizing him to file
the present complaint. The power of attorney executed in March, 1999
has also been exhibited as Ex.PW-3/B in the version of PW-3. This
power of attorney gave authority to PW-3 to institute and continue the
present proceedings. A bald suggestion was given to this witness that
he was in fact not authorized to file the present complaint. However,
these submissions do not detract from the veracity of the document
which is the authorization dated 26.9.1995 (Ex.PW-3/A) which
specifically states that PW-3 namely Deepak Rai Srivastava was
authorized by the company through resolution circulated in the 136th
Board Meeting held on 09.06.1992 (as referred in Ex PW3/B) to file the
present complaint. The power of attorney Ex.PW-3/B executed by the
company in March, 1999 authorized him to institute and pursue all cases
on behalf of the complainant company. There is no attack on these
documents; they are authentic and valid. The authorization letter
(Ex.PW-3/A) validly authorized PW-3 to institute and pursue the
complaint.
6 Section 142 of the Act provides that a complaint under Section
138 of the Act can be made by the payee or the holder in due course.
This complaint has admittedly been filed in the name of, and on behalf
of, the company. In the case of Associated Cement Co. Ltd. Vs.
Keshvanand reported as 1998 Cri LJ 856, the Court had held that the
complainant has to be a corporeal person who is capable of making a
physical appearance in the Court. There may also be occasions that
different persons would represent the company. It is open to the de jure
complainant to seek permission of the Court for sending any other
person to represent the company in the Court. In that case the Court
had held that even presuming that initially there was no authority, still
the company can at any stage rectify that defect. In the case of
M.M.T.C. Ltd. and Anr. Vs. Medchi Chemicals & Pharma (P) Ltd. and
Anr. (2002) 1 SCC 234 the Supreme Court in this context had noted as
under:
"Thus, even presuming, that initially there was no authority,
still the Company can at any stage rectify that defect. At a subsequent
stage the Company can send a person who is competent to represent
the company. The complaints could thus not have been quashed on this
ground."
7 There is no merit in this argument. It is rejected.
8 The second but last argument of the learned Senior Counsel for
the petitioners was on the validity of the legal notice. Submission being
that the case of the complainant is based on a legal notice dated
16.8.1995. No postal receipt has been placed on record to show that
such notice was served upon the petitioners. Purported reply given by
the petitioners dated 29.8.1995 being treated as reply to the notice of
demand is a misinterpretation of fact as this reply clearly stated that this
was a response to the notice dated 12.8.1995; the case of the petitioners
is that the notice was dated 16.8.1995, in the absence of the
complainant company having discharged the initial burden of the
demand notice having been served upon the petitioner company the
subsequent proceedings in the complaint are clearly questionable.
9 While refuting this statement the learned counsel for the
respondent has drawn attention of this Court to Ex.PW-3/C which was
the notice served upon the petitioners and had been proved in the
version of PW-3. Submission being that no suggestion was even given
to PW-3 that no such demand notice was received by him.
10 Testimony of PW-3 substantiates this submission of the learned
counsel for the respondent. PW-3 on oath deposed that a legal notice
was sent to the petitioner company (Ex.PW-3/C) through registered
post. The AD Card was proved as Ex.PW-3/E. Further deposition of
PW-3 being that reply to this legal notice had been sent by the
petitioners vide their reply Ex.PW-3/D and along with this reply a
cheque of Rs.5 lacs had been appended as part payment of the total
outstanding amount which at that time was almost Rs.5 crores. No
suggestion had been given to this witness that the notice had not been
received by the company or that they had not filed their reply Ex.PW-
3/D. It was only in the statement of the petitioners under Section 313
Cr.P.C. that under legal advice a false defence has been sought to be set
up that no such legal notice had been received. If this was the position,
this fact should have been disputed by the petitioners right from the
inception i.e. during the course of cross-examination of PW-3. No such
defence having been propagated, it is a clear case where the defence has
now been set up as an afterthought.
11 The complaint discloses the date of legal notice as 12.8.1996.
The fact finding of the Court below i.e. the Court of the Magistrate has
rightly noted that this can only be a typographical error as the date in
Ex.PW-3/C is 16.8.1995. Reply to this legal notice Ex.PW-3/D had
acknowledged the liability qua the complainant company and in part
payment, sum of Rs.5,00,000/- had been sent vide their communication
dated 29.8.1995. This letter has also not been challenged in the cross-
examination of PW-3 when he had proved this document. This Court
also notes that it is an admitted fact that as per the complainant a
common legal notice had been sent qua all the transactions between the
parties; there were seven transactions and in the reply by the petitioner
company on 29.8.1995 it had enclosed a cheque of a part payment of
Rs.5 lac. This argument has also dealt with by both the fact finding
Courts below and had been answered in favour of the complainant.
12 This argument also holds no water.
13 The third submission of the learned senior counsel for the
petitioner is that the cheques in question were security cheques and it
was their regular trade practice that after the goods had been received by
the petitioner company fresh cheques in lieu of the security cheques
were to be issued by the petitioners; the security cheques by themselves
would not constitute a legal debt or liability by the petitioner to the
complainant; the petitioner company used to place a purchase order
upon the complainant alongwith the security cheque; after the goods had
been dispatched and received by the petitioner company, the petitioner
company would issue a fresh cheque for the payment of the goods and
the security cheque used to be returned. Attention has been drawn to
the testimony of PW-3 to advance this argument; submission being that
the receipt of the goods were disputed and this had been proved in the
cross-examination of PW-3 wherein Marks DA and DB which is a letter
and a fax message exchange respectively, between the parties
evidencing the fact that the goods had not been supplied in time; this
was also the reason why no invoices and sale receipts had been proved
by the complainant. Submission being reiterated that in the light of this
evidence, the presumption as contained in Section 118 of the Act and
relied upon by the Courts below is illegal as preponderance of
probabilities clearly show that a doubt had been created on the veracity
of the transactions and there was no legally payable debt by the
petitioner company to the complainant. In this background, the
conviction of the petitioners is wholly illegal.
14 Record shows that in terms of the complaint and the other
evidence which includes the testimony of PW-3, on placing of the
purchase order by the petitioners, the complainant company would send
the goods along with invoices as per the value of the goods. There was
an agreed period and after the expiry of that period, the petitioners
would make the payment in regard to the goods and the security cheques
would thereafter be returned. In case the payment was not forthcoming
the security cheques were considered as consideration towards supply of
goods and the respondent would bank these cheques. In the instant
case, since the payment was not made against all the supplied goods, the
security cheques got converted into normal cheques against
consideration of the goods supplied and therefore they were not to be
considered as security cheques. This was explained in the complaint.
PW-3 on oath has also reiterated this position. He deposed that after the
supply of the goods, the accused had not given a separate cheque. The
cheque in question was presented to the bank which was returned along
with the returning memo after having been dishonoured for the reason
"Exceeds Arrangement". Marks DA and DB which is a letter and fax
message exchanged between the parties only sought expedition of the
dispatch of the goods. Neither of these communications state that the
goods had not been supplied by the complainant company and as such
the payment was not due to the complainant company. The fact finding
courts after the scrutiny of these documents had also noted that these
documents had not been proved and could not really be read in evidence
as they were only photocopies of the original; even otherwise they did
not advance the version of the petitioners that the goods had not been
supplied by the complainant company. The petitioner in his statement
under Section 313 of the Cr.P.C had set up a contrary stand. At that
stage he stated that no supply was made by the complainant company
and as such no money was payable to the company. If this was
factually correct, nothing prevented the petitioners from leading
evidence in defence; Marks DA and DB which were only photocopies of
the documents could well have been proved through independent
evidence. None of this was resorted to.
15 In this context the Supreme Court in the case of I.C.D.S. Ltd. Vs.
Beena Shabeer and Anr. reported as (2002) 6 SCC 426 had negatived
the submission advanced by the accused that a security cheque would
not be covered within the ambit of Section 138 of the Act. Emphasis
was laid on the word "where any cheque". In this context the
observations of the Apex Court are relevant and read herein as under:
"The above noted three words are of extreme significance, in
particular, by reason of the user of the word "any"--the first three
words suggest that in fact for whatever reason if a cheque is drawn on
an account maintained by him with a banker in favour of another
person for the discharge of any debt or other liability, the highlighted
words if read with the first three words at the commencement of
Section 138, leave no manner of doubt that for whatever reason it may
be, the liability under this provision cannot be avoided in the event the
same stands returned by the banker unpaid. The legislature has been
careful enough to record not only discharge in whole or in part of any
debt but the same includes other liability as well.
...............
'Any cheque' and 'other liability' are the two key expressions
which stands as clarifying the legislative intent so as to bring the
factual context within the ambit of the provisions of the Statute. Any
contra interpretation would defeat the intent of the legislature. The
High Court, it seems, got carried away by the issue of grantee and
guarantor's liability and thus has overlooked the true intent and
purport of Section 138 of the Act."
16 This argument is thus also without any merit. The presumption
under Section 118 of the N.I Act did not stand rebutted. The cheque had
been issued for valid legal consideration.
17 The last submission of the learned counsel for the petitioners
borders on Section 357 of the Cr.P.C. For this purpose attention has
been drawn to Section 138 of the said Act. It is pointed out that the
sentence which could be imposed by the Magistrate for a conviction
under this provisions of law is imprisonment which may extend to 2
years or fine which may be twice the amount of the cheque.
Submission being that it is a fine above which could be ordered as a part
of the sentence as the word „fine‟ as appearing in Section 138 of the said
Act is not interchangeable with the word „compensation‟ contained in
Section 357 of the Cr.P.C.
21 Sections 357 of the Cr.P.C. reads herein as under:
357. Order to pay compensation.
(1) When a Court imposes a sentence of fine or a sentence (including a
sentence of death) of which fine forms a part, the Court may, when
passing judgment, order the whole or any part of the fine recovered to
be applied-
(a) in defraying the expenses properly incurred in the prosecution;
(b) in the payment to any person of compensation for any loss or injury
caused by the offence, when compensation is, in the opinion of the
Court, recoverable by such person in a Civil Court;
(c) when any person is convicted of any offence for having caused the
death of another person or of having abetted the commission of such
an offence, in paying compensation to the persons who are, under the
Fatal Accidents Act, 1855 (13 of 1855 ), entitled to recover damages
from the person sentenced for the loss resulting to them from such
death;
(d) when any person is convicted of any offence which includes theft,
criminal misappropriation, criminal breach of trust, or cheating, or of
having dishonestly received or retained, or of having voluntarily
assisted in disposing of, stolen property knowing or having reason to
believe the same to be stolen, in compensating any bona fide purchaser
of such property for the loss of the same if such property is restored to
the possession of the person entitled thereto.
(2) If the fine is imposed in a case which is subject to appeal, no such
payment shall be made before the period allowed for presenting the
appeal has elapsed, or, if an appeal be presented, before the decision
of the appeal.
(3) When a Court imposes a sentence, of which fine does not form a
part, the Court may, when passing judgment, order the accused person
to pay, by way of compensation, such amount as may be specified in
the order to the person who has suffered any loss or injury by reason
of the act for which the accused person has been so sentenced.
(4) An order under this section may also be made by an Appellate
Court or by the High Court or Court of Session when exercising its
powers of revision.
(5) At the time of awarding compensation in any subsequent civil suit
relating to the same matter, the Court shall take into account any sum
paid or recovered as compensation under this section.
22 Under sub-section 3, where a fine has not been imposed, the
Court may order the payment of compensation. A reading of Section
357(4) Cr.P.C makes it clear that under this sub-section an order of
compensation can be passed by the appellate Court; the High Court or
by the Court of Sessions in revision. The power of the Court to award
compensation is not ancillary to other sentences but is in addition
thereto. This power under this Section has a message i.e. a measure of
responding properly to the crime as also reconciling the victim with the
offender. There does exist a distinction between „fine‟ and
„compensation‟ but the purpose which both seek to achieve is similar.
An amount of „compensation‟ can be directed to be recovered as a fine
but a legal fiction is raised in relation to recovery of „fine‟ and in that
sense a „fine‟ stands on a higher footing than the „compensation‟
awarded by the Court. Although, after the amendment in the said Act
(by the Amendment Act, 2002) a Magistrate of the first class can also
impose a sentence of fine exceeding Rs.5000/-.
24 This Court also notes that this Court is sitting as a Revisional
Court. Unless and until there is a patent illegality or a perversity which
is apparent on the face of the record, interference in the concurrent
finding of fact of the two Courts below is not warranted. The Apex
Court in (2002) 5 SCC 659 Jagannath Choudhary and Ors. Vs.
Ramayan Singh and Anr. had held as follows:
"The main question which the High Court has to consider in an
application in revision is whether substantial justice has been done. If,
however, the same has been an appeal, the application would be entitled to
demand an adjudication upon all questions of fact or law which he wishes to
raise, but in revision the only question is whether the court should interfere in
the interest of justice. Where the court concerned does not appear to have
been committed any illegality or material irregularity or impropriety in
passing the impugned judgment and order, the revision cannot succeed. If the
impugned order apparently is presentable, without any such infirmity which
may render it completely perverse or unacceptable and when there is no
failure of justice, interference cannot be held in exercise of revisional
jurisdiction."
25 There is no merit in the revision petitions. Dismissed.
INDERMEET KAUR, J
DECEMBER 10, 2014
ndn
