M/S.Kms Cargo Services vs M/S. Sky 2C Freight Systems India ...
2015 Latest Caselaw 9584 Del

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*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+                        CRL.REV.P. 299/2015
                                    Date of decision: 23.12.2015
        M/S.KMS CARGO SERVICES           ..... Petitioner
                     Through  Mr.Rakesh Nautiyal, Advocate.

                         versus

        M/S. SKY 2C FREIGHT SYSTEMS INDIA PVT LTD &
        ANR.                               ..... Respondents
                       Through  Mr.C.K.Sharma, Advocate.
                                Mr.M.P.Singh, APP.
        CORAM:
        HON'BLE MR. JUSTICE ASHUTOSH KUMAR

ASHUTOSH KUMAR, J. (ORAL)

1. The present revision petition has been filed challenging the judgment and order of conviction passed by the Metropolitan Magistrate-02/West:Delhi in complaint case No.6551/1/12 dated 21.11.2013/30.11.2013 whereby the petitioner has been convicted under Section 138 of the Negotiable Instruments Act and has been sentenced to undergo RI for six months, pay a compensation of Rs.6 lakhs to the complainant (respondent No.1) within 30 days from the date of the sentence as also against the judgment and order passed in Crl.Appeal No.16/2/14 by the Additional Sessions Judge-03 (West) Delhi dated 07.05.2015 whereby the conviction and sentence imposed upon the petitioner by the Trial Court has been affirmed and upheld.

2. The respondent No.1(complainant) who is in the business of providing freight services for import and export of goods to foreign countries was approached by the petitioner for providing services for import and export of goods. On a mutually agreed terms, the petitioner started taking the services to the respondent No.1(complainant) from March, 2012 to September, 2012. Invoices and bills for the aforesaid period amounting to Rs.14,89,746/- was raised by the respondent No.1(complainant). Out of the aforesaid amount, the petitioner is said to have paid Rs.9,40,600/- till August, 2012 with an assurance that the balance amount shall be paid shortly. On 12.09.2012, a cheque is said to have been issued by the petitioner for an amount of Rs.5,49,146/- (exhibit CW-1/2). The aforesaid cheque, on presentation in bank, was dishonoured for insufficiency of funds in the account. A legal notice was sent to the petitioner on 18.10.2012 which was duly received by him.

3. The authorised representative of the respondent No.1(complainant) got himself examined before the Trial Court as CW-1 and exhibited his affidavit in evidence as Ex.CW-1/A. On the perusal of the complaint and the affidavit of the authorised representative, summons were issued to the petitioner on 17.12.2012.

4. When the substance of accusation was being explained to the petitioner, he is said to have admitted that the cheque in question pertained to bank account mentioned in the name of his proprietorship concern and that he had signed the cheque but the other columns were not filled by him and the spaces were left blank as the aforesaid cheque was a security cheque. However, the petitioner admitted that

he owes Rs.4,25,000/- to the respondent No.1(complainant). The business relationship between the parties was also admitted.

5. Since the Trial Court was of the opinion that the petitioner failed to raise any proper defence for rebutting the case of the respondent No.1(complainant), his right to crossexamine the complainant was closed and even his statement under Section 313 of the Code of Criminal Procedure was not recorded. Since there was no defence, according to the Trial Court, available to the petitioner, no opportunity was granted to lead defence evidence. The Trial Court, therefore, as aforesaid, convicted the petitioner and sentenced him to undergo SI for six months and pay a fine of Rs.6 lakhs within 30 days of the passing of the sentence.

6. The Appellate Court took note of the fact that during the trial, the matter was referred to the Mediation Centre where the petitioner agreed to pay Rs.4,49,146/- in instalments but he did not keep the aforesaid promise of the petitioner was not kept. The petitioner was thereafter arrested on non bailable warrants of arrest being issued against him.

7. Disbelieving the version of the petitioner, the appeal was dismissed and the Trial Court judgment and order was upheld.

8. The petitioner assailed the aforesaid judgments on the ground that he was only liable to pay Rs.4,25,000/- and no more and that the subject cheque was signed by him but the contents were filled up by the respondent. It was further urged that the Trial Court adopted a queer approach in recording a verdict of guilt at the stage of framing of notice only and petitioner was not afforded any opportunity of

proving his defence.

9. However, during the course of argument, learned counsel appearing for the petitioner submitted that even today, the petitioner is ready and willing to pay the amount which he owes to the respondent No.1, provided the respondent No.1 is agreeable for the same.

10. It was further stated on behalf of the petitioner that by the order passed by a Bench of this Court, the petitioner had deposited a sum of Rs.3,50,000/- by way of pay order/demand draft with the Registrar General of Delhi High Court and thereafter the sentence imposed upon the petitioner was suspended till the next date of hearing. The petitioner was released on bail on his furnishing bond in the sum of Rs.25,000/- with one surety of like amount to the satisfaction of the Trial Court.

11. The learned counsel appearing for the respondent No.1 though defended the judgments passed by the Courts below but on instructions, apprised the Court that since the litigation has taken an unusually long time, the respondent No.1 is agreeable for accepting Rs.4,50,000/- towards full and final settlement of all his dues.

12. Section 147 of the Negotiable Instruments Act reads as hereunder:-

Section 147 of the Negotiable Instruments Act reads as under: "147. Offences to be compoundable. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), every offence punishable under this Act shall be compoundable."

13. In several judgments of the Supreme court and this court, it has been held that in view of non-obstante clause appearing in Section 147 of the NI Act, 1881, the compounding of the offence under the said Act is controlled by the aforesaid section only and is not contingent or dependent on the provisions /scheme contemplated under section 320 of the Cr.P.C.

14. While dealing with this issue, the Supreme Court of India in Damodar S. Prabhu vs. Sayed Babalal H., (2010) 5 SCC 663 has held that compounding of the offence at later stages of litigation in a cheque bouncing cases is permissible.

15. A reference in the aforesaid case has been made of Vinay Devanna Nayak vs. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305 wherein the Supreme Court had an occasion to examine whether an offence punishable under Section 138 of the NI Act, which is a special law, could be compounded.

16. The Supreme Court was of the view that the provision is only intended to prevent dishonesty on the part of the drawer of the Negotiable Instrument in issuing cheques without sufficient funds or with a view to induce a payee or holder in due course to act upon it. It only seeks to promote the efficacy of bank operations and ensures credibility in transacting business through cheques. It was held that in such matters, there should not be any denial for compounding of offences. The aforesaid view has been reiterated by the Supreme Court in K.M.Ibrahim vs. K.P.Mohammad and Another, (2010) 1 SCC 798.

17. The Parliament, realising this aspect, has inserted section 147 of the NI Act.

18. However, in J.K.Industries Limited and Ors vs. Amarlal V.Jumani & Anr,. (2012) 3 SCC 255, it has been clarified by the Supreme Court that in Damodar S.Prabhu (Supra), the Supreme Court harmonized the provision of Section 320 Cr.P.C with Section 147 of the N.I.Act by saying that an otherwise non-compoundable case would be compounded in view of Section 147 of N.I.Act. The guidelines in Damodar S.Prabhu (Supra) have been issued by the Supreme Court under Article 142 of the Constitution in order to fill up the legislative vacuum which exists in Section 147 of the N.I.Act, which does not spell out any procedure for compounding. It was thus explained that Section 147 of the N.I.Act does not obliterate the manner of compounding under Section 320 Cr.P.C but it only over-rides Section 320(9) of the Cr.P.C in so far as the offence under Section 147 of the N.I.Act is concerned.

19. With reference to Section 4(2) of the Cr.P.C, the Supreme Court in J.K.Industies (Supra), has explained that for compounding under the N.I.Act, the scheme contemplated under Section 320 Cr.P.C cannot be followed "in the strict sense" and such interpretation cannot and does not mean that the fundamental provisions of compounding under Section 320 of the Cr.P.C stands obliterated by "a side-wind", as it were. Compounding, thus under Section 147 of the N.I.Act, has to be in accord with the main principle of compounding, viz. the requirement of consent of the person aggrieved.

20. Though the judgment delivered in Damodar S.Prabhu (Supra) is aimed at encouraging litigants in the cheque dishonour cases to opt for compounding during early stages of litigation to ease choking of criminal justice system and for providing graded scheme of imposing costs on parties who unduly delayed the compounding of offence but in the facts of the present case it appears that imposing any cost on the parties would only lead to further spate of litigation as the petitioner, as stated, is not in a position to pay anything more than what has been offered by him. The offer of the petitioner has been accepted by the respondent No.1 for the only consideration of the entire litigation having taken an unusually long time.

21. Thus taking into account the totality of circumstances and the fact that respondent No.1 has agreed to accept Rs.4,50,000/- towards full and final settlement of all his disputes, this Court permitted the petitioner to pay Rs.1 lakh (Rs.70,000/- in cash and a post dated cheque of Rs.30,000/-) to the respondent No.1 in Court. The same has been accepted without any caveat by respondent No.1. Learned counsel appearing for the petitioner has submitted that the petitioner assures that the aforesaid post dated cheque shall be honoured or else it would give rise to a further cause of his being prosecuted in another N.I Act case.

22. Now, learned counsels for the petitioner as well as the respondent, in unison, have prayed for a direction to the Registrar General of the Delhi High Court to release the aforesaid amount of Rs.3,50,000/- which was deposited by the petitioner, to be released in favour of respondent No.1.

23. The Registrar General of Delhi High Court is requested to release the aforesaid amount in favour of respondent No.1.

24. For the aforesaid purpose, the respondent No.1 shall present himself before the Registrar General of Delhi High Court within a period of 15 days from the date of passing of this order. On his appearance before the Registrar General and on proof of identity of respondent No.1, the aforesaid amount shall be released in his favour.

25. Considering the fact that the dispute now stands completely settled, there being independent provision for compounding of offence under Section 147 of the Act, and the primary object underlying Section 138 N.I. Act, 1881, the judgments assailed in the present revision petition are set aside and the petitioner is acquitted of the charges levelled against him.

26. The revision petition is hereby allowed and disposed of in terms of the above.

Crl.M.B No.7043/2015 & Crl.M.A.10118/2015

1. In view of the petition having been disposed of, the instant applications have become infructuous.

2. Applications are disposed of accordingly.

ASHUTOSH KUMAR, J DECEMBER 23, 2015 k