Jamboo Bhandari Vs State Industrial Development Corporation Ltd. & Ors. (Supreme Court of India)
The Supreme Court considered appeals filed by the accused who had been convicted by the Judicial Magistrate on a complaint under Section 138 of the Negotiable Instruments Act, 1881. The Magistrate convicted the appellants and directed them to pay the cheque amount of ₹2,52,36,985 along with interest at 9% per annum. The appellants challenged the conviction before the Sessions Court, which, while considering their applications under Section 389 of the Code of Criminal Procedure, 1973 for suspension of sentence, granted relief subject to the condition that they deposit 20% of the compensation amount in terms of Section 148 of the Negotiable Instruments Act.
The appellants challenged the condition before the High Court. The High Court relied upon the Supreme Court’s decision in Surinder Singh Deswal Alias Colonel S.S. Deswal and Others v. Virender Gandhi and proceeded on the basis that the word “may” used in Section 148 of the Negotiable Instruments Act had been interpreted as “shall”. Accordingly, the High Court held that suspension of sentence under Section 389 of the Cr.P.C. could be granted only upon directing the accused to deposit a minimum of 20% of the compensation or fine amount.
The Supreme Court examined paragraph 8 of its earlier decision in Surinder Singh Deswal Alias Colonel S.S. Deswal and Others v. Virender Gandhi. The Court observed that the earlier judgment required Section 148 of the Negotiable Instruments Act to be interpreted purposively. It held that, ordinarily, an appellate court would be justified in imposing the condition of deposit contemplated by Section 148. However, where the appellate court is satisfied that requiring a deposit of 20% would be unjust or would effectively deprive the appellant of the right of appeal, an exception can be made, provided that specific reasons are recorded.
The Court held that while considering an application under Section 389 of the Cr.P.C. filed by a person convicted under Section 138 of the Negotiable Instruments Act, it is always open to the appellate court to examine whether the matter constitutes an exceptional case warranting suspension of sentence without imposing the condition of deposit of 20% of the fine or compensation amount. If the appellate court concludes that the matter falls within such an exception, it must record reasons for arriving at that conclusion.
The original complainant argued that the appellants had never specifically pleaded before the Sessions Court or the High Court that their case deserved to be treated as an exception and that the requirement of depositing the minimum 20% amount should be dispensed with. Therefore, according to the complainant, there was no occasion for the courts to consider such a plea.
The Supreme Court disagreed with this submission. It observed that when an accused seeks suspension of sentence under Section 389 of the Cr.P.C., the prayer ordinarily seeks suspension without any condition. Therefore, when such a blanket request is made, it becomes the duty of the court to examine whether the case falls within the category of exceptional cases warranting departure from the normal rule.
The Court found that both the Sessions Courts and the High Court had proceeded on the erroneous premise that deposit of the minimum 20% amount constituted an absolute rule admitting of no exception. The Court held that this approach was incorrect in view of the interpretation of Section 148 adopted in Surinder Singh Deswal Alias Colonel S.S. Deswal and Others v. Virender Gandhi.
During the hearing before the Supreme Court, counsel for the appellants submitted that the appellants had already deposited 20% of the compensation amount. The Court observed that this factual aspect was required to be examined by the High Court.
Accordingly, the Supreme Court set aside the impugned orders of the High Court and restored the revision petitions filed by the appellants before the High Court. It directed the parties to appear before the roster Bench of the High Court on 09.10.2023 so that a date could be fixed for hearing the restored revision petitions. Since both contesting parties were represented before the Supreme Court, the High Court was not required to issue any fresh notice regarding the date of hearing.
The Supreme Court further directed the High Court to first examine whether the appellants had already deposited 20% of the compensation amount. If it found that such deposit had not been made, the High Court was directed to reconsider the revision petitions in the light of the principles laid down in the judgment. Until disposal of the restored revision petitions, the interim order passed by the Supreme Court suspending the sentence would continue to operate.
The appeals were accordingly allowed, and all pending applications were disposed of.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Leave granted.
2. Heard learned counsel appearing for the parties.
3. The appellants in these two appeals were the accused before the learned Judicial Magistrate who tried them on a complaint filed by the respondent No. 1 under Section 138 of the Negotiable Instruments Act, 1881 (for short “N.I. Act”). The learned Magistrate convicted the appellants and directed them to pay the cheque amount of Rs. 2,52,36,985/- with interest thereon @ 9% per annum. An appeal was preferred by the appellants before the Sessions Court. Relying upon Section 148 of the N.I. Act, the Sessions Court granted relief under Section 389 of the Code of Criminal Procedure, 1973 (for short “Cr.P.C.”) subject to condition of appellants depositing 20% of the amount of compensation. of the Sessions Court.
4. The High Court relied upon the decision of this Court in the case of Surinder Singh Deswal Alias Colonel S.S. Deswal and Others v. Virender Gandhi1. The High Court proceeded on the footing that, as this Court has interpreted the word “may” appearing in Section 148 as “shall”, the relief of suspension of sentence under Section 389 of the Cr.P.C. can be granted only by directing the accused to deposit minimum of 20% of the compensation/fine amount.
5. The paragraph ‘8’ of the decision of this Court in the case of Surinder Singh Deswal Alias Colonel S.S. Deswal and Others1 reads thus: –
“8. Now so far as the submission on behalf of the appellants that even considering the language used in Section 148 of the NI Act as amended, the appellate court “may” order the appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial court and the word used is not “shall” and therefore the discretion is vested with the first appellate court has construed it as mandatory, which according to the learned Senior Advocate for the appellants would be contrary to the provisions of Section 148 of the NI Act as amended is concerned, considering the amended Section 148 of the NI Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the NI Act, the word used is “may”, it is generally to be construed as a “rule” or “shall” and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 of the NI Act confers power upon the appellate court to pass an order pending appeal to direct the appellant-accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application file by the appellant-accused under Section 389 CrPC to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 of the NI Act, a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the appellate court for sufficient cause shown by the appellant. Therefore, if amended Section 148 of the NI Act is purposively interpreted in Section 148 of the NI Act, but also Section 138 of the NI Act. The Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of the dishonour of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonoured cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque, who has to spend considerable time and resources in the court proceedings to realise the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions. Parliament has thought it fit to amend Section 148 of the NI Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the NI Act and also Section 138 of the NI Act.
(underline supplied)”
6. What is held by this Court is that a purposive interpretation should be made of Section 148 of the N.I. Act. Hence, normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded.
7. Therefore, when Appellate Court considers the prayer under Section 389 of the Cr.P.C. of an accused who has been convicted for offence under Section 138 of the N.I. Act, it is always open for the Appellate Court to consider whether it is an exceptional case which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount. As stated earlier, if the Appellate Court comes to the conclusion that it is an exceptional case, the reasons for coming to the said conclusion must be recorded.
8. The submission of the learned counsel appearing for the original complainant is that neither before the Sessions Court nor before the High Court, there was a plea made by the appellants that an exception may be made in these cases and the requirement of deposit or minimum 20% of the amount be dispensed with. He submits that if such a prayer was not made by the appellants, there were no reasons for the Courts to consider the said plea.
9. We disagree with the above submission. When an accused applies under Section 389 of the Cr.P.C. for suspension of sentence, he normally applies for grant of relief of suspension of sentence without any condition. Therefore, when a blanket order is sought by the appellants, the Court has to consider whether the case falls in exception or not.
10. In these cases, both the Sessions Courts and the High Court have proceeded on the erroneous premise that deposit of minimum 20% amount is an absolute rule which does not accommodate any exception.
11. The learned counsel appearing for the appellants, at this stage, states that the appellants have deposited 20% of the compensation amount. However, this is the matter to be examined by the High Court.
12. In these circumstances, we set aside the impugned orders of the High Court and restore the revision petitions filed by the appellants before the High Court. We direct the parties to appear before the roster Bench of the High Court on 09.10.2023 in the morning to enable the High Court to fix a date for hearing of the revision petitions. As the contesting parties are before the Court, it will not be necessary for the High Court to issue a notice of the date fixed for hearing. The High Court, after hearing the parties, will consider whether 20% of the amount is already deposited or not. If the Court comes to the conclusion that 20% of the amount is not deposited, the Court will re-examine the Revision Petitions in the light of what we have observed in this judgment. Till the disposal of the restored Revision Petitions, the interim order passed by this Court ordering suspension of sentence will continue to operate.
13. The appeals are allowed in above terms.
14. Pending application(s), if any, shall stand disposed of.
Leave granted.
The appeals are allowed in terms of the signed non-reportable
judgment.
Pending application(s), if any, shall stand disposed of.
