Indian Oil Corporation Ltd. vs Atul Singh
2021 Latest Caselaw 4828 MP

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IN THE HIGH COURT OF MADHYA PRADESH, JABALPUR
                          WRIT APPEAL NO. 767/2021

               INDIAN OIL CORPORATION VS. ATUL SINGH

JABALPUR: 31/08/2021

Shri Aditya Adhikari, Ld. Senior Advocate with Shri Satish Chaturvedi, learned
counsel for the appellant.
Shri Sankalp Kochar, learned counsel for the respondent.

The appellant is the Indian Oil Corporation which being aggrieved by

the order dated 20.07.2021 passed in W.P. No.5339/2021 by which the

dealership that was assigned to the respondent herein vide agreement dated

01.08.2008 was terminated by invoking Sub-clause (d) of Clause 45 of the

agreement.

2. The respondent was convicted by the trial Court for an offence under Section

138 of the Negotiable Instruments Act. The conviction was upheld by the

appellate Court and his criminal revision is pending before this Court.

3. Learned counsel for the appellant submits that as the respondent had been

convicted for an offence under Section 138 of the Negotiable Instruments Act,

the appellant was well within its right to terminate the dealership of the

respondent. Learned counsel for the appellant thereafter has referred to the

impugned order dated 20.07.2021 and with specific reference to paragraph 4

where the learned single Judge has referred to the judgment of the Supreme

Court in P. Mohanraj and Others Vs. Shah Brothers Ispat Pvt. Ltd. 2021

SCC Online SC 152. Another judgment that has been referred and relied

upon by the learned single Judge is Kaushalya Devi Massand Vs.

Roopkrishore Khore (2011) 4 SCC 593. Law laid down in both these

judgments are that the offence under Section 138 of the Negotiable

Instruments Act is actually a civil wrong with a criminal liability. In other

words, the Supreme Court has said that though the liability that may be

suffered by person under Section 138 of the Negotiable Instruments Act is in

the form of an imprisonment, the transaction which has led to the said

punishment is a civil transaction. Learned counsel for the appellant has also

referred to the provisions of Section 2(n) of the Cr.P.C. which defines the

offence as any act or omission made punishable under any law for the time

being in force.

4. On the basis of the said arguments, learned counsel for the appellant has

impressed upon us that the learned single Judge has misread the

abovementioned judgments passed by the Supreme Court and has not referred

to the relevant provisions of the Cr.P.C which make the act of the appellant an

offence under Section 138 of the Negotiable Instruments Act and thereby

empowering the appellant to exercise jurisdiction under Sub-clause (d) of

Clause 45 of the agreement.

5. In criminal law, the offences are of two kinds: Offences may be mala in se

and/or malum prohibitum. Offences mala in se are those offences which are

repugnant to human conscience and are offences involving moral turpitude.

Therefore, acts such as murder, theft, rape, cheating etc., are offences mala in

se. Per contra, the offences which are malum prohibitum are those acts,

though not morally repugnant, are made offences by an act of legislature as in

the case of Section 138 under the Negotiable Instruments Act. It is not

necessary that an act which is an offence malum prohibitum in India be an

offence in any other country. Clause 45 (d) is wide and open ended and does

not define a criminal offence for which there can be cancellation of dealership

by its invocation. The said clause, in our opinion, cannot be interpreted

pedantically to include each and every act or omission which may constitute

an offence under the jus scriptum. Such an interpretation of the clause 45(d)

can empower the appellant to terminate the dealership of a licensee upon his

involvement in an road accident case, resulting in grievous hurt top the victim

(Section 339 of the Indian Penal Code), as the law makes such an act

punishable with imprisonment which may extend up to 2 years (which is also

the maximum sentence for an offence under Section 138 of the Negotiable

Instruments Act).

6. Learned counsel for the appellant has also argued that the distinction between

an offence under Section 339 IPC and Section 138 of Negotiable Instruments

Act is that an offence under Section 339 of IPC does not involve mens rea and

is made punishable on account of negligent conduct on the part of the accused.

However, in an offence under Section 138 of the Negotiable Instruments Act,

knowledge that the accused did not have sufficient balance in his bank account

while issuing the cheque is preponderant on the part of the accused. That may

be so, but the same does not make the act morally repugnant. Besides, the

issue is no longer res integra as the Supreme Court has held that the act

constituting the offence u/s. 138 of the NI Act is of a civil nature with a

criminal liability. Invocation of clause 45(d) can only be in cases involving

moral turpitude or those offences where the company itself is a victim and the

licensee the perpetrator of the offence. Therefore, we hold that impugned

order passed by the learned single Judge is just and proper and the present

appeal is without substance.

Therefore, the appeal is dismissed.

     (Atul Sreedharan)                            (Vijay Kumar Shukla)
                Judge                                    Judge




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          Date: 2021.09.03 14:17:49 +05'30'