Gopal Sharma vs M/S Punjab Stores
2021 Latest Caselaw 395 MP

         HIGH COURT OF MADHYA PRADESH, JABALPUR


SINGLE BENCH :              HON'BLE SHRI JUSTICE VISHNU PRATAP
                            SINGH CHAUHAN

                    Criminal Revision No.1350/2020

APPLICANTS :-                      Gopal Sharma and another

                                           Vs.

RESPONDENT :-                      M/s Punjab Stores

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      Shri Manish Datt, learned Senior Counsel with Shri Rohit
Jain, Advocate for the applicants.
      Shri Mukesh Kumar Shukla and Shri Mukesh Agrawal,
learned counsel for the respondent.
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                Whether approved for reporting : Yes / No
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                                    O R D E R

(Passed on the 2nd day of March, 2021)

The applicants have filed this criminal revision under

Section 397/401 of the Cr.P.C. being aggrieved by the order dated

18.2.2020 passed by the learned Third Additional Sessions Judge,

Katni (M.P.) in Criminal Appeal No.2700046/2016, whereby

learned appellate Court maintained the conviction against the

applicants under Section 138 of the Negotiable Instruments Act,

1881 (hereinafter referred to as "NI Act") and sentenced the

applicant No.1 to undergo Rigorous Imprisonment for 1 year (Four

counts for each cheque of Rs.10 Lacs), all sentences of

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imprisonment to run concurrently, along with compensation of

Rs.53,76,000/- and to undergo additional Rigorous Imprisonment

of 6 months in default of payment of compensation amount, as

also fine of Rs.10,000/- for each four counts.

2. The brief facts giving rise to the present revision, are

that, the applicant No.2, which is a private limited company,

deals in the business of production and selling of milk powder

and other products and the applicant No.1 Gopal Sharma is the

Director of that company. The respondent is a firm, which deals in

the business of sell and purchase of Medicines, Dairy products,

Milk, Milk powder, Ghee and other products. The respondent firm

placed an order to the applicants for supplying 50 Metric Tonnes

Milk Powder. The applicant company agreed to supply milk

powder and received Rs.80 Lacs in advance for that transaction

but, the applicant company neither supplied the milk powder nor

returned the money. When the respondent pressurized the

applicant for returning the money, the applicant provided four

cheques of Rs.10 Lacs each. When those cheques were

presented in the bank for encashment, the same were

dishonoured and the bank returned those cheques with an

endorsement that sufficient funds are not available in the

account of the applicants. Thereafter, the respondent contacted

the applicants and the applicants assured the respondent that on

again presenting the cheques in the bank for encashment, they

would be honoured. The respondent again presented the cheques

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in the bank for encashment but, all the cheques were again

dishonoured and returned by the bank. The respondent served a

legal notice to the applicants on 6.7.2012, which was received by

the applicants on 11.7.2012 but the applicants not paid the

cheque amount within the stipulated period. Thereafter, the

respondent filed a complaint under Section 138 of the NI Act

against both the applicants before the Court of Judicial Magistrate

First Class, Katni, being R.T. No.4231/2012. Learned trial Court

after completing the trial, delivered a judgment on 15.3.2016,

whereby convicted both the applicants for offence punishable

under Section 138 of the NI Act and passed an order of sentence

against the applicant No.1 to undergo Rigorous Imprisonment for

1 year (Four counts for each cheque) and calculated the

compensation @ 9% and fixed the compensation amount

Rs.53,76,000/- to be paid to the respondent by the applicants.

3. Both the applicants being aggrieved by the judgment

dated 15.3.2016 passed by the trial Court, preferred an appeal

before the learned Third Additional Sessions Judge, Katni (M.P.),

which was registered as Criminal Appeal No.2700046/2016.

Learned appellate Court after hearing both the parties, concluded

the appeal and passed a judgment on 7.12.2016, whereby

affirmed the conviction passed against the applicants and

reduced the sentence of 1 year Rigorous Imprisonment to till

rising of Court, however, fine of Rs.10,000/- was also imposed for

each four counts.

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4. The respondent also filed an appeal registered as

Criminal Appeal No.2700073/2016 against judgment dated

15.3.2012 passed by the trial Court on the ground that learned

trial Court calculated the compensation @ 9% interest. Being a

business transaction, it was prayed to enhance the compensation

@ 16% interest. Learned appellate Court disallowed the prayer of

the respondent and dismissed the appeal filed by the respondent.

5. The applicants being aggrieved by judgment dated

7.12.2016 passed by the appellate Court, preferred a revision

before this Court, which was registered as Criminal Revision

No.638/2017. This Court vide order dated 2.8.2019 disposed of

the revision by affirming the conviction of the applicants but set

aside the sentence passed by the appellate Court and remitted

the matter back to the appellate Court with a direction to

reconsider the order of sentence after giving an opportunity of

hearing to both the parties. Thus, the criminal appeal

No.2700046/2016 was restored to its original number and after

hearing arguments of both the parties, learned appellate Court

reconsidered the order of sentence and again delivered a

judgment on 18.2.2020, whereby the applicant No.1 was

sentenced to undergo Rigorous Imprisonment for 1 year (Four

counts for each cheque of Rs.10 Lacs), all imprisonments to run

concurrently, and also affirmed the compensation amount of

Rs.53,76,000/-, with default stipulation. In addition, learned

appellate Court also imposed fine of Rs.10,000/- for each four

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counts, as imposed by the appellate Court in its previous

judgment.

6. The applicant being aggrieved by the order of

appellate Court dated 18.2.2020 preferred this revision on the

ground that learned trial Court did not consider the provisions of

Section 138 of NI Act in proper perspective. It is a compensatory

aspect rather than preventive. Nature of offence is of civil nature.

7. Having heard the learned counsel for the parties, the

learned trial Court after convicting the applicants for offence

punishable under Section 138 of the NI Act, imposed a sentence

to undergo R.I. for 1 year and granted compensation of

Rs.53,76,000/- under Section 357(3) of NI Act but not imposed

any fine. The learned appellate Court affirmed the conviction and

sentence passed by the trial Court and additionally imposed fine

of Rs.10,000/- for each four counts. This Court finds that this

additional imposition of fine of Rs.10,000/- for each four counts is

erroneous. Section 386 of the Cr.P.C. is relevant in this context,

which reads as under:-

"386. Power of the Appellate Court. After perusing such record and hearing the appellant or his pleader, if he appears, and the Public Prosecutor if he appears, and in case of an appeal under section 377 or section 378, the accused, if he appears, the Appellate Court may, if it considers that there is no sufficient ground for interfering, dismiss the appeal, or may-

(a) in an appeal from an order or acquittal, reverse such order and direct that further inquiry be made, or that the accused be re- tried or committed for trial, as the case may be, or find him guilty and pass sentence on him according to law;

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(b) in an appeal from a conviction-

(i) reverse the finding and sentence and acquit or discharge the accused, or order him to be re- tried by a Court of competent jurisdiction subordinate to such Appellate Court or committed for trial, or

(ii) alter the finding, maintaining the sentence, or

(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the Same;

(c) in an appeal for enhancement of sentence-

(i) reverse the finding and sentence and acquit or discharge the accused or order him to be retried by a Court competent to try the offence, or

(ii) alter the finding maintaining the sentence, or

(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, so as to enhance or reduce the same;

(d) in an appeal from any other order, alter or reverse such order;

(e) make any amendment or any consequential or incidental order that may be just or proper; Provided that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement:

Provided further that the Appellate Court shall not inflict greater punishment for the offence which in its opinion the accused has committed, than might have been inflicted for that offence by the Court passing the order or sentence under appeal"

8. The appellate Court while dealing with the appeal filed

being aggrieved by the conviction and sentence passed against

any accused, cannot enhance the sentence passed by the trial

Court until respondent files an appeal for enhancement of

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sentence. In the present matter, the respondent has not

preferred any appeal for enhancement of punishment but has

filed an appeal only for calculating the compensation @ 16%

instead of 9%, as calculated by the trial Court and that appeal

was dismissed by the appellate Court. In such circumstances, this

Court finds that learned appellate Court has committed an

apparent error while imposing additional fine of Rs.10,000/- for

each four counts. Hence, this revision deserves to be allowed on

this point and sentence of fine of Rs.10,000/- for each four

counts, as imposed by the appellate Court deserves to be set

aside.

9. Learned Senior Counsel appearing for the applicant

submits that offence under Section 138 of NI Act is of civil nature

and, therefore, there is no need to pass harsh punishment of

imprisonment. While drawing the attention of this Court towards

Section 138 of NI Act, learned Senior Counsel for the applicant

submits that Court may impose sentence or fine or both and

prayer is made to reduce the jail sentence of the applicant to the

period already undergone by the applicant in custody.

10. Learned counsel appearing for the respondent submits

that this case is pending since 2012 and the applicant has still

not paid the compensation amount even after affirmation of

conviction and compensation imposed by the trial Court. The

applicant deposited a bank draft before the trial Court with an

objection that the amount may not be paid to the respondent.

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That draft was in force for a limited period. If the objection has

not been raised by the applicant, the draft might have been

encashed by the respondent. Despite the order of this Court, the

respondent has not received the amount of bank draft deposited

before the trial Court. The applicant deter the respondent from

receiving the amount of compensation, which was deposited by

the applicant through a bank draft before the trial Court. Even

Hon'ble the Apex Court has directed the applicant to deposit the

money but despite that order, the applicant has not paid any

amount to the respondent. Considering the conduct of the

applicant, imprisonment imposed by the trial Court seems

justified because he breached the faith of commercial

transaction.

11. Hon'ble the Apex Court in the case of Damodar S.

Prabhu Vs. Sayed Babalal H., (2010) 5 SCC 663, in para 4

has held has under:-

"4. It may be noted that when the offence was inserted in the statute in 1988, it carried the provision for imprisonment up to one year, which was revised to two years following the amendment to the Act in 2002. It is quite evident that the legislative intent was to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. While the possibility of imprisonment up to two years provides a remedy of a punitive nature, the provision for imposing a fine which may extent to twice the amount of the cheque serves a compensatory purpose. What must be remembered is that the dishonour of a cheque can be best described as a regulatory offence that has been created to serve the public interest in ensuring the reliability of these instruments. The impact of this offence is usually confined to

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the private parties involved in commercial transactions."

12. Hon'ble the Apex Court in the case of Kaushyalya

Devi Massand Vs. Roopkishore Khore, (2011) 4 SCC 593, in

para 11 has held has under:-

"11. Having considered the submissions made on behalf of the parties, we are of the view that the gravity of a complaint under the Negotiable Instruments Act cannot be equated with an offence under the provisions of the Indian Penal Code, 1860 or other criminal offences. An offence under Section 138 of the Negotiable Instruments Act, 1881, is almost in the nature of a civil wrong which has been given criminal overtones."

13. Hon'ble the Apex Court in the case of Meters and

Instruments Private Limited and another Vs. Kanchan

Mehta, (2018) 1 SCC 560, in para 18.5 has held has under:-

"18.5 Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation under Section 357(3) is considered inadequate, having regard to the amount of the cheque, the financial capacity and the conduct of the accused or any other circumstances."

14. After going through all the orders passed by Hon'ble

the Apex Court, this Court, appellate Court and by the trial Court,

it is reflected that the applicant was released on bail and his jail

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sentence was suspended by this Court due to widespread of

Covid-19 pandemic. The applicant was having an opportunity to

renew the bank draft but despite the orders passed by this Court

and by Hon'ble the Apex Court, the applicant did not obey the

directions. It reveals that the conduct of the applicant is not

bonafide for the payment of compensation and he breached the

faith of commercial transaction for which NI Act was enacted.

15. As discussed in the case of Damodar S. Prabhu

(supra), previously the imprisonment was upto one year, which

was later on revised by an amendment and converted into two

years. This is only to deter the dishonest persons, who disturbed

the faith of commercial transactions.

16. In the above circumstances, this Court does not find

any cogent reason to reduce the sentence of one year's rigorous

imprisonment to the period already undergone by the applicant.

It is pertinent to mention here that the applicant's jail sentence

was suspended only for a limited period but the applicant after

being released on bail, not surrendered before the trial Court

within prescribed time after lapse of period of temporary bail.

This is also not a good conduct of the applicant, which has to be

taken into consideration. In such circumstances, this Court is of

the firm view that the applicant is not entitled for reduction of

sentence awarded to him.

17. In view of the aforesaid, this criminal revision is partly

allowed. Only sentence of fine of Rs.10,000/- for each four counts

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is set aside and remaining other sentences imposed by the

appellate Court is affirmed.

18. Since the applicant is not in jail at present, the

applicant is directed to surrender before the trial Court within 15

days from the date of this order to undergo the remaining part of

jail sentence. In case, the applicant fails to surrender before the

trial Court within 15 days from the date of this order, the learned

trial Court is directed to adopt coercive measures against the

applicant for securing his presence and also directed to recover

the compensation amount, if not paid by the applicant within 15

days.

19. In case, the applicant pays whole amount, the bank

draft submitted by the applicant be returned to him, which is

even otherwise not in effect at present.

20. With the aforesaid directions, this Criminal revision

stands partly allowed to the extent indicated above. There shall

be no orders as to cost.

(Vishnu Pratap Singh Chauhan) JUDGE

pp.

Digitally signed by PUSHPENDRA PATEL Date: 2021.03.02 15:37:37 +05'30'