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2000 DIGILAW 107 (KAR)

CRYSTAL CHEMICAL INDUSTRIES v. JIPS DYECHEM INDUSTRIES

2000-02-04

B.PADMARAJ

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B. PADMARAJ, J. ( 1 ) HEARD the arguments on either side and carefully perused the case records as well as the written arguments submitted by the petitioner by its partner in person. I have also carefully gone through the references made to several decisions in the revision petition as well as in the written arguments submitted on behalf of the petitioner. ( 2 ) THE petitioner, on being aggrieved over the inadequacy of sentence imposed upon the respondents/claimants, sentencing them to pay a fine of Rs. 20,000 each, in default of payment of fine to undergo simple imprisonment for three months for the offence under Section 138 of the negotiable Instruments Act, 1881, has filed this revision petition. ( 3 ) RESPONDENTS Nos. 2 to 4 are the directors of Jips Dyechem Private Limited and partners in Jips dyechem Industries. The said Jips Dyechem Private Limited had made an agreement with the petitioner-firm as per exhibit P-3 to run the factory of the petitioner on a monthly compensation basis and this amount was to be paid to the petitioner's bank, viz. , State Bank of India as per the undertaking signed by respondent No. 2, which has been admitted in exhibit P-1. When respondents Nos. 2 to 4 defaulted in making these payments to the State Bank of India, and that the State Bank of India brought this fact to the notice of the petitioner, the petitioner demanded this overdue payments from respondents Nos. 2 to 4. Thereupon, respondent No. 1 issued four post-dated cheques in lieu of its liabilities to make the payments to the SBI signed by respondents Nos. 2 to 4, which includes cheque No- 41802 dated April 2, 1996, for Rs. 75,000 as has been admitted in exhibit P-8. These cheques were issued by the respondents from their partnership firm Jips Dyechem Industries saying that as they did not have any bank operation in their company, they were issuing post-dated cheques from their partnership firm. As the respondents were directors in JDPL and partners in JDI, the petitioner believed them and accepted the cheques. Subsequently when the respondents sold their firm, accused No. 1 to one mr. Harlalka, they also accepted their liability towards the petitioner firm in their individual undertakings given by respondents Nos. 2, 3 and 4 to Mr. As the respondents were directors in JDPL and partners in JDI, the petitioner believed them and accepted the cheques. Subsequently when the respondents sold their firm, accused No. 1 to one mr. Harlalka, they also accepted their liability towards the petitioner firm in their individual undertakings given by respondents Nos. 2, 3 and 4 to Mr. Harlalka as admitted in exhibits P-15, p-16 and P-17 and this undertaking was also not disputed by the respondents during the cross-examination of the petitioner in his evidence. As the respondents knew that the petitioner mr. Damani is staying at Bangalore, and they are planning to leave their factory of JDI, they cleverly issued post-dated cheques knowing very well that they do not intend to make any payments. Thus when the petitioner wrote a letter to them dated October 7, 1995, reminding them about the past liabilities and for clearing the post-dated cheques issued by them, they with ulterior motive of not paying their dues wrote a letter dated October 14, 1995, making false and baseless allegations that the cheques were issued under stress and duress. This letter of the respondents shocked the petitioner and he has no alternative, but to take the help of law to counter their cheating intentions. Hence, the petitioner after depositing cheque and after getting the dishonoured cheque from his banker filed the complaint under Section 200 of the Criminal procedure Code. On these and other averments made in the complaint, the petitioner presented the complaint before the CMM, Bangalore, for the offence under Section 138 of the Negotiable instruments Act. ( 4 ) THE trial court on consideration of the material evidence placed on record and after hearing the arguments on both sides, convicted the respondents-accused for the offence under Section 138 of the Negotiable Instruments Act and sentenced them to undergo RI for six months and also to pay a fine of double the amount of cheque. The appeal filed by the respondents against their conviction was dismissed, but the sentence imposed on the respondents was however modified, in that the appellate court besides setting aside the substantive sentence of imprisonment has also reduced the fine amount from double the amount of cheque to Rs. 20,000 each. The appeal filed by the respondents against their conviction was dismissed, but the sentence imposed on the respondents was however modified, in that the appellate court besides setting aside the substantive sentence of imprisonment has also reduced the fine amount from double the amount of cheque to Rs. 20,000 each. That is to say in modification of the sentence passed by the trial court, the appellate court in appeal set aside the sentence of imprisonment and imposed a fine of Rs. 20,000 each on respondents Nos. 1 to 4. Aggrieved by the inadequacy of the sentence imposed by the appellate court, the present revision petition is filed by the petitioner. ( 5 ) THE grievance ventilated by the petitioner is that the sentence of fine of Rs. 20,000 each is highly inadequate for the offence under Section 138 of the Negotiable Instruments Act especially when it provides for punishment with imprisonment for a term which may extend to one year, or with fine which, may extend to twice the amount of the cheque, or with both. ( 6 ) REGARDING the power of this court to enhance the sentence if it is found to be inadequate, cannot be doubted, in view of the decision of the Hon'ble Supreme Court in the case of Eknath shankarrao Mukkawar v. State of Maharashtra, AIR1977 SC 1177 , 1977 Crilj964 , (1977 )3 SCC25 , [1977 ]3 SCR513 , wherein it is held as under (headnote) : "the new Code of Criminal Procedure, 1973, has not abolished the High Court's power of enhancement of sentence by exercising revisional jurisdiction, suo motu. The provision for appeal against inadequacy of sentence by the State Government or the Central Government does not lead to such a conclusion. High Court's power of enhancement of sentence, in an appropriate case, by exercising suo motu power of revision is still extant under Section 397 read with section 401 of the Criminal Procedure Code, 1973, inasmuch as the High Court can 'by itself' call for the record of proceedings of any inferior criminal court under its jurisdiction. The provision of Section 401 (4) is a bar to a party, who does not appeal, when appeal lies, but applies in revision. The provision of Section 401 (4) is a bar to a party, who does not appeal, when appeal lies, but applies in revision. Such a legal bar under Section 401 (4) does not stand in the way of the High Court's exercise of power of revision, suo motu, which continues as before in the new Code. " ( 7 ) THEREFORE there could be no dispute that this court in its revisional jurisdiction, can enhance the sentence if it is found to be inadequate. But the question is whether the sentence imposed by the appellate court, while confirming the conviction under Section 138 of the Negotiable instruments Act upon the respondents on the facts and circumstances of the case, is adequate or not. ( 8 ) THE appellate court while confirming the conviction of the respondents under Section 138 of the Negotiable Instruments Act, proceeded to examine the adequacy or otherwise of the sentence imposed upon the respondents, and having found it to be on the higher side, it modified the sentence awarded by the trial court in the manner as stated supra. The relevant discussion is found at paragraph 9 of the impugned judgment which reads thus : "point No. 2.--Holding the accused persons guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, the learned Magistrate has imposed R.. for six months and fine of Rs. 1,50,000 against the accused persons. The operative portion of the judgment with regard to imposing of sentence is as under : 'the accused are convicted under Section 255 (1) of the Criminal Procedure Code and sentenced to undergo RI for six months and also to pay a fine of double the amount of the cheque,. e. , Rs. 75,000 + Rs. 75,000 = 1,50,000 (rupees one lakh fifty thousand) only. In default to pay the fine amount, RI for three months. If the accused deposits half of the fine amount. e. , Rs. 75,000 in the court, the said amount will be paid to the complainant after the appeal period is over'. Thus it is seen that the learned Magistrate has not specifically stated as to the sentence or punishment imposed against each of the accused persons though there are four accused persons in the case. e. , Rs. 75,000 in the court, the said amount will be paid to the complainant after the appeal period is over'. Thus it is seen that the learned Magistrate has not specifically stated as to the sentence or punishment imposed against each of the accused persons though there are four accused persons in the case. A reading of the order makes it appear as if collectively the learned Magistrate imposed sentence against all the accused persons to undergo RI for six months and to collectively to pay fine of Rs. 1,50,000. Besides in my opinion, having regard to the facts and circumstances of the case, the quantum of punishment awarded by the learned Magistrate is also on the higher side. The liability claimed by the complainant against the accused persons was for rs. 75,000. Therefore, imposing punishment of RI for six months and fine of Rs. 1,50,000 appears to be on the higher side. Therefore, this part of the order passed by the learned magistrate regarding the sentence calls for interference. However, I am not inclined to accept the contention of learned counsel for the appellant that the accused persons are entitled for the benefit of P. O. Act. " ( 9 ) IT has to be stated that though the section would provide for punishing the accused for one year imprisonment and fine for twice the amount of the cheque, the sentence would depend upon the facts and circumstances of each case. In the instant case, the appellate court has awarded a sentence of fine of Rs. 20,000 each, which would come to Rs. 80,000, as against the cheque amount of Rs. 75,000. The reading of Section 138 of the Negotiable Instruments Act would show that either the accused could be sentenced to an imprisonment or sentenced to pay a fine or both. So far as the power of the appellate court regarding the alteration in sentence is concerned, section 386 (b) (iii) says that it may with or without altering the finding, alter the nature or the extent, or the nature and extent of sentence, but not so as to enhance the same. ( 10 ) IT is no doubt true that the question of sentence is in the discretion of the trial court and would not ordinarily be disturbed by the appellate court, if it has been exercised judicially. ( 10 ) IT is no doubt true that the question of sentence is in the discretion of the trial court and would not ordinarily be disturbed by the appellate court, if it has been exercised judicially. In the instant case, the cheques were issued in the year 1996, and we are in 2000. The said cheques were stated to have been signed by respondents Nos. 2 and 4. The first respondent is a partnership firm and respondents Nos. 2 to 4 are the partners thereon. Respondent No. 3 is a lady who appeared to be aged about 40 years. According to the case of the complainant, the cheques were issued by respondent No, 1-firm, in lieu of the liabilities to make the payments to the State bank of India. Regarding the offences committed by the firm, Section 141 (1) says that if the person committing an offence under Section 138 is a company which includes a firm or other association of individuals, every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offences and shall be liable to be proceeded against and punished accordingly. The proviso appended to Section 141 (1) further says that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. It is to be seen therefore from the provisions contained in Section 141 (1) that every person who was in charge of and was responsible to the firm for the conduct of the business of the firm as well as the firm shall be deemed to be guilty. It does not refer to each and every partner. It would only confine itself to the person in charge of and responsible to the company for the conduct of business of the company. This position becomes clear from Sub-section (2) of Section 141 of the Negotiable instruments Act. Those partners who may not be responsible for the conduct of the business of the company, would be liable if the offence is committed with the consent or connivance of the said partner. This position becomes clear from Sub-section (2) of Section 141 of the Negotiable instruments Act. Those partners who may not be responsible for the conduct of the business of the company, would be liable if the offence is committed with the consent or connivance of the said partner. If the intention was to make every director or partner liable, in that event, there was no necessity to include the word "director" under Sub-section (2) of Section 141 of the negotiable Instruments Act. As referred to the above, a reading of Sub-sections (1) and (2) of section 141 makes it clear that while a partner in charge of and responsible to the company for its acts is ipso facto liable and deemed to be guilty to any other partner would only be liable and deemed to be guilty, if the offence is committed with his connivance or neglect. It is true all partners may under the civil law be liable but for purposes of offences under Section 138 of the negotiable Instruments Act, it is the individual partner who is liable. Section 141 of the negotiable Instruments Act would govern the question as to whether a partner committed the offence or not. ( 11 ) IN the instant case it appears that the trial court did not bestow its attention on this aspect of the matter and accordingly, the appellate court found that the sentence imposed is on the higher side. While imposing the sentence, the court can certainly take this aspect also into consideration and impose an adequate sentence so as to do complete justice between the parties. As I have already stated though Section 138 of the Negotiable Instruments Act provides for sentence of imprisonment for a term which may extend to one year, or with fine, which may extend to twice the amount of the cheque, or with both, it does not mean that in every case the court is bound to impose the sentence of imprisonment or fine to the value of the cheque or twice the value of the cheque. The section would also provide for sentence of imprisonment or fine or both. The appellate court which has power to alter the sentence, having found that the sentence imposed by the trial court to be on the higher side, altered the same in that it only imposed a fine of Rs. The section would also provide for sentence of imprisonment or fine or both. The appellate court which has power to alter the sentence, having found that the sentence imposed by the trial court to be on the higher side, altered the same in that it only imposed a fine of Rs. 80,000 in all which it deemed fit to be imposed on the facts and circumstances of the case. ( 12 ) HAVING given my anxious consideration to the matter in issue, I do not find any good reason to hold that the sentence of fine of Rs. 80,000, on the facts and circumstances of this case, is inadequate. The sentence imposed by the appellate court cannot be said to be or considered to be so inadequate as to warrant interference of this court in revision. Hence, I find no merit in this revision petition. The revision petition is accordingly dismissed.