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2021 DIGILAW 1078 (DEL)

Falcon Technologies Pvt Ltd v. Union Of India

2021-05-27

MANMOHAN, SANJEEV NARULA

body2021
JUDGMENT Sanjeev Narula, J. - The present petition was heard along with the other batch of petitions relating to disputes and issues pertaining to filing of form GST TRAN-1 (hereinafter "TRAN-1 Form"). However, since the facts of the present case are slightly distinct from the remaining cases in the batch, it is considered appropriate to pass a separate order in the present petition. 2. Petitioner has approached this Court because despite filing the TRAN-1 Form within the prescribed time period, on 12th August, 2017, its electronic credit ledger does not reflect the transitional input tax credit balance. 3. The Petitioner- Falcon Technologies Pvt. Ltd, is engaged in trading activity, namely importing and/or domestically procuring various items such as broadcasting/radio equipment and selling the same to All India Radio/Doordarshan/Prasar Bharti and other private broadcasting channels. The Petitioner filed the prescribed TRAN-1 Form well in time before the deadline prescribed under Rule 117 of the CGST Rules, 2017 (hereinafter "the Rules"). However, the CENVAT credit has not been transitioned into the GST regime. The Petitioner furnished the screenshot evidencing filing of the TRAN-1 Form and has also raised the issue with the GST Authorities, but the same has not been resolved. 4. We have gone through the communications annexed with the petition. Petitioner has been shunted from one office to another, yet regrettably its grievance has not been addressed. Despite providing copies of proof of having filed the TRAN-1 Form, the Respondents have not taken any action. Emails written by the Petitioner to the help desk of the Respondents and to the Nodal Officer have also not yielded any favourable outcome. There is no counter affidavit filed by the Respondents and therefore we are unable to understand the reason for denial of the credit to the Petitioner. In this vein, we refer to the judgment of the Madras High Court in The Commissioner of GST & Central Excise, Chennai Outer Commissionerate and Ors. v. Checkpoint Apparel Labeling Solutions India Pvt. Ltd.,2020 42 GSTL 505, Pending SLP (The Commissioner of GST & Central Excise, Chennai Outer Commissionerate and Ors. v. Checkpoint Apparel Labeling Solutions India Pvt. Ltd., Diary No.563/2021). wherein the Court deprecated the practice of the Revenue in making the Assessee run from pillar to post. v. Checkpoint Apparel Labeling Solutions India Pvt. Ltd.,2020 42 GSTL 505, Pending SLP (The Commissioner of GST & Central Excise, Chennai Outer Commissionerate and Ors. v. Checkpoint Apparel Labeling Solutions India Pvt. Ltd., Diary No.563/2021). wherein the Court deprecated the practice of the Revenue in making the Assessee run from pillar to post. The Court held as under: - "12 ..............the Assessee to run from pillar to post, against the clear intention of the Government to allow credit of the un-utilized input credit under the earlier tax regime and the input service tax and excise duty to be set off under the new GST regime, to which a switch over was made with a big aplomb on 1.7.2017 by the Central Government." 5. The case of the Petitioner stands covered by a plethora of judgments of this Court including Aadinath Industries & Ors. v. Union of India and Ors.,2019 30 GSTL 478 Bhargava Motors v. Union of India and Ors.,2019 26 GSTL 164, Pending SLP (Union of India v. Bhargava Motors, Diary No. 38404/2019). and The Tyre Plaza v. Union of India.,2019 30 GSTL 222, Pending SLP (Union of India & Ors. v. The Tyre Plaza, SLP(C.) No. 15397/2020) 6. Accordingly, we allow the present petition and direct the Respondents to immediately process the TRAN-1 Form filed by the Petitioner in accordance with law and reflect the credit in the electronic credit ledger under the GST regime. For this purpose, in case the Petitioner is required to file the TRAN-1 Form once again, the Respondents shall open the GST portal to enable the Petitioner to do so or accept the same manually on or before 30th June, 2021. 7. The writ petition is allowed in the above terms. 10. Keeping in mind the above discussion on the scope and purport of an order passed under Section 143A(1) of the Act, this Court will now deal with the case on hand. 11. The petitioners in the above petitions are the husband and wife and the respondent/complainant is common in both the cases. The petitioners are said to have drawn a cheque in favour of the respondent towards a legally enforceable debt and the same was dishonoured. It led to the filing of a complaint before the court below for an offence under Section 138 of the Negotiable Instruments Act. The petitioners are said to have drawn a cheque in favour of the respondent towards a legally enforceable debt and the same was dishonoured. It led to the filing of a complaint before the court below for an offence under Section 138 of the Negotiable Instruments Act. Both the cases were at the stage of cross examination of P.W.I. At that point of time, the respondent has proceed to file a petition under Section 143A(1) of the Act, to direct the accused persons to deposit 20% of the cheque amount as interim compensation. The Court below after an elaborate discussion has held that the provision will have a retrospective operation and therefore will apply even to the pending proceedings. The Court, therefore, proceeded to direct the petitioners to pay interim compensation to the respondent within a stipulated time. 17. This Court has carefully considered the submissions made on either side and the materials available on record. This Court has already derived the scope and purport of Section 143A of the Negotiable Instruments Act, supra. It has to be now applied to the facts of the present case. 18. A careful reading of the order passed by the Court below shows that the Court below has focussed more on the issue of the prospective/retrospective operation of the amendment. The Court has not given any reason as to why it is directing the accused persons to pay an interim compensation of 20% to the complainant. As held by this Court, the discretionary power that is vested with the trial Court in ordering for interim compensation must be supported by reasons and unfortunately in this case, it is not supported by reasons. The attempt made by the learned counsel for the respondent to read certain reasons into the order, cannot be done by this Court, since this Court is testing the application of mind of the Court below while passing the impugned order by exercising its discretion and this Court cannot attempt to supplement it with the reasons argued by the learned counsel for the respondent. 19. 19. This Court took the effort of discussing the effect and purport of Section 143A of the Negotiable Instruments Act, only to ensure that some guidelines are given to the Subordinate Courts, which deals with complaints under Section 138 of the Negotiable Instruments Act, on a regular basis to deal with such petitions effectively and in accordance with law. 20. In view of the above discussion, the order passed by the Court below in Crl.M.P.No. 710 of 2019 and Crl.M.P. No. 885 of 2019 dated 11.04.2019 is hereby set aside. In the result, the Criminal Original Petitions are allowed. There shall be a direction to the Court below to complete the proceedings in C.C. No. 161 of 2018 and C.C. No. 142 of 2018, within a period of three months from the date of receipt of a copy of this order. The Registry is directed to circulate a copy of this order to all the Subordinate Courts through the Judicial Academy. Consequently, connected miscellaneous petitions are closed." 34. The observations in LGR Enterprises & Ors. (supra) were referred to in paragraphs 18 & 19 of the verdict of the Hon"ble High Court of Bombay in "Nurallah Kamruddi Veljee V. Farid Veljee" 2019 SCC OnLine Bom 1537 with observations in paragraph 18 & 19 of the said verdict making reference to observations in paragraph 6 of LGR Enterprises & Ors. (supra) to the effect:- "18. The learned Counsel for the petitioner has also placed reliance on the judgment of Madras High Court in the case of LGR Enterprises v. P. Anbazhagan in Cr.O.P. No. 15438 of 2019. The ratio laid down by the Single Judge of the Madras High Court would not be applicable to the case in hand since the case before the Madras High Court was in respect of Section 143A of the Act which empowers the Court to direct interim compensation while trying an offence under Section 138 of the Act. Para 6 of the judgment reads thus:- "6. A reading of the above provision makes it clear that the Court trying an offence under Section 138 of the Negotiable Instruments Act "may" (Emphasis supplied) order the drawer of the cheque to pay interim compensation to the complainant. The provision itself shows that the discretion is vested with the Trial Court to direct interim compensation to be paid by the complainant. The provision itself shows that the discretion is vested with the Trial Court to direct interim compensation to be paid by the complainant. It is not necessary that in all cases, the trial Court must necessarily direct the complainant to pay interim compensation and such a direction should be given only on a case to case basis, by taking into consideration the facts of each case. The legislature had intentionally not used the word "shall", since it would have prevented the accused persons, even in genuine cases, from defending themselves without paying 20% as interim compensation amount to the complainant. This would have directly affected the fundamental right of an accused person to defend himself in a criminal case. This is the reason why the legislature had thoughtfully used the word "may" under Section 143A(1) of the Negotiable Instruments Act. Therefore, it is not possible to read the word "shall" into the word "may" which is used in the provision." 19. It has been observed by the Madras High Court that as per Section 143A of the Act, discretion is vested with the Trial Court to direct interim compensation to be paid to the complainant which would be given only on a case to case basis by taking into consideration the facts of each case. It is observed that the legislature has intentionally not used the word "shall" since it would have prevented the accused persons, even in genuine cases, from defending themselves without paying 25% as interim compensation amount to the complainant. It is not the case in hand. The petitioner herein has been convicted and while in appeal, the learned Additional Sessions Judge in view of the judgment laid down by the Supreme Court in case of Surinder Singh Deswal (supra) rightly exercised her jurisdiction in directing payment of compensation as above. The ratio, therefore, can be distinguished accordingly.", which judgment thus, clearly distinguishes the provisions of Section 143A of the NI Act, 1881 and the provisions of Section 148 thereof. 35. As regards the import of Section 148 of the NI Act, 1881 and it being directory or mandatory, the matter is no longer res integra in view of the verdict of the Hon"ble Supreme Court in "Surender Singh Deswal @ Col. 35. As regards the import of Section 148 of the NI Act, 1881 and it being directory or mandatory, the matter is no longer res integra in view of the verdict of the Hon"ble Supreme Court in "Surender Singh Deswal @ Col. S.S. Deswal V. Virender Gandhi" in Criminal Appeal Nos.917-944 of 2019, whereby the Hon"ble Supreme Court has observed vide paragraph 9 thereof to the effect:- "9. Now so far as the submission on behalf of the appellants that even considering the language used in Section 148 of the N.I. 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 to direct the appellant - accused to deposit such sum and the 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 N.I. Act as amended is concerned, considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the N.I. Act, though it is true that in amended Section 148 of the N.I. 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 N.I. 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 filed by the Appellant Accused under Section 389 of the Cr.P.C. to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 of the N.I. 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 N.I. Act is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 of the N.I. Act, but also Section 138 of the N.I. Act. 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 dishonoured 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, the Parliament has thought it fit to amend Section 148 of the N.I. Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Sec 138 of the N.I. Act." 36. The verdict in Nurallah Kamruddi Veljee (supra) thus, observed vide paragraph 14 thereof to the effect:- "14. The Hon'ble Supreme Court has also observed that the word "may" appearing in Section 148 of the Act as amended 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." 37. The verdict of the High Court of Karnataka Kalaburagi Bench in "Jahangir Vs. Farooq Ahmed Abdul Razak" in Criminal Petition no.201213/2020 dated 06.07.2021 observed vide paragraph 9 to the effect:- "9. The verdict of the High Court of Karnataka Kalaburagi Bench in "Jahangir Vs. Farooq Ahmed Abdul Razak" in Criminal Petition no.201213/2020 dated 06.07.2021 observed vide paragraph 9 to the effect:- "9. Section 143A (1) is not a mandatory provisions and it says that Court may order the drawer of the cheque to pay the interim compensation as per conditions stipulated there under. So it is evident that the power under Section 143A is vested with the learned Magistrate to be exercised judiciously after recording the plea and it is not mandator/ but the learned magistrate is required to exercise his judicious discretion under Section 143 A of the Act. But in the present case, the impugned order disclose that the learned Magistrate has not even applied his mind and in a mechanical way as per the mandatory provisions of Section 143 A he has directed the accused to deposit 20% of the cheque amount. The provisions of Section 143 A are not mandatory but the discretion was given to the magistrate to be exercised judiciously. In the instant case though application was filed prior to the accusation it should be heard only after the accusation but after giving proper opportunity. Admittedly the accused/ petitioner herein has submitted his objections to the said applicants and the learned Magistrate has not passed any speaking order and in a mechanical way he directed the accused /petitioner herein to deposit 20% of the cheque amount. The entire approach of the learned magistrate is against the settled principles of natural justice and he did not even passed a summary speaking order giving reasons for passing such an order. The order itself disclose that he carried on impression that Section 143 (A) of the Act is a mandatory provision of law but ignored the fact that the word used in the Section is 'may' and not 'shall' which gives a discretion to the Court to be exercised in a judicious way. Hence, the entire approach of the learned magistrate is against the settled principles and the impugned order calls for interference. Accordingly, I proceed to pass the following: ORDER The petition is allowed. The impugned order passed by the learned I Addl. Civil Judge and JMFC-I at Vijayapura in C.C.No.3049/ 2019 dated 18.11.2020 is quashed. Hence, the entire approach of the learned magistrate is against the settled principles and the impugned order calls for interference. Accordingly, I proceed to pass the following: ORDER The petition is allowed. The impugned order passed by the learned I Addl. Civil Judge and JMFC-I at Vijayapura in C.C.No.3049/ 2019 dated 18.11.2020 is quashed. Matter is remitted back to the learned magistrate with a direction to pass a judicious order on the application submitted by the complainant/ respondent herein under Section 143A of the NI Act after giving a reasonable opportunity to both the parties. In view of disposal of the main petition, l.A.No.1/2020 does not survive for consideration and accordingly, the same is disposed off." 38. The observations of the High Court of Bombay in "Ajay Vinodchandra Shah vs. The State Of Maharashtra And Anr." 2019 (4) Mah.L.J.705 in paragraphs 13 & 15 are to the effect:- "13. On comparison of the language used in Sections 143A and 148, one finds a difference. U/s 143A, the accused is yet to face a trial. Under subsection (2) thereof, the interim compensation under sub-section (1) shall not exceed twenty percent of the amount of the cheque. However, under Section 148, it is stated that the Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine." These clauses in these two sections reflect the intention of the Legislature that a person at the stage of trial is always considered innocent till he is found guilty and, therefore, the ceiling of 20% compensation is mentioned. However, in the appeal, when the first Court holds the accused guilty and thus, once he is convicted, then, the appellate Court is given the power to pass order directing the accused to deposit the amount which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. It is further stated in Section 148 that the amount payable under this subsection shall be in addition to any interim compensation paid by the appellant under Section 143A. 15. It is useful to compare the two sections i.e., 143-A and 148 of the Negotiable Instruments Act in a tabular format to get a quick grasp. The grant of interim relief is a common thread running through both the sections. However, they are not identical. 15. It is useful to compare the two sections i.e., 143-A and 148 of the Negotiable Instruments Act in a tabular format to get a quick grasp. The grant of interim relief is a common thread running through both the sections. However, they are not identical. The terms and clauses used by the Legislature while drafting these two sections, provide internal aid to understand the sections. Sr. No. Section 143-A of the N.I. Act Section 148 of the N.I. Act 1. The order of payment of interim compensation. The order of depositing the sum out of fine or compensation. 2. Upper limit is maximum 20% of the cheque amount. Lower limit is minimum 20% of the amount of fine or compensation. 3. The order is of payment made directly to the complainant. The Court may direct to release the amount which is deposited to the complainant. 4. If the order of payment is made, the accused shall pay within a period of 60 days and for special reason, further 30 days hence within 90 days. Same provision is made. Maximum 60 days and for special reason, further 30 days for depositing the amount. 5. (i) In summary trials at the stage of plea if not pleaded guilty. The order directing to deposit the money can be passed any time during the appeal. (ii) upon framing of charge in any other case. 6. Sub-section (4) of 143-A states about recovery of the money with interest from the complainant in case of acquittal of the accused within a period of 60 days or maximum 90 days. In proviso of section 148, similar provision is made for the recovery of money with interest from the complainant in case of acquittal of the accused within a period of 60 days or maximum 90 days. 7. Sub-section (5) of section 143-A, the provisions of recovery of interim compensation should be as if a fine under section 421 of the Cr.P.C. No such provision is mentioned but to be governed by the provisions of Code of Criminal Procedure. bring forth the apparent difference under Section 143A and 148 of the NI Act, 1881. Undoubtedly, vide paragraph 21 and 22 of Surinder Singh Deswal alias Colonel S.S.Deswal & Ors. Vs Virender Gandhi & Anr. bring forth the apparent difference under Section 143A and 148 of the NI Act, 1881. Undoubtedly, vide paragraph 21 and 22 of Surinder Singh Deswal alias Colonel S.S.Deswal & Ors. Vs Virender Gandhi & Anr. (2020) 2 SCC 514 , it was observed to the effect:- "21.Insofar as the judgment of the Bombay High Court in Ajay Vinodchandra Shah (supra) which has been relied by the learned counsel for the appellant, it is sufficient to observe that the High Court did not have benefit of judgment of this Court dated 29.05.2019 in Surinder Singh Deswals case. The judgment of the Bombay High Court was delivered on 14.03.2019 whereas judgment of this Court in appellants" case is dated 29.05.2019. In view of the law laid down by this Court in Surinder Singh Deswals case decided on 29.05.2019, the judgment of Bombay High Court in Ajay Vinodchandra Shahs case cannot be said to be a good law insofar as consequences of non-compliance of condition of suspension of sentence is concerned. 22. It is further to note that even Bombay High Court while modifying the direction to deposit 25% of the amount of total compensation directed the accused to deposit 20% of the amount of compensation within 90 days." Thus, it is only the observations in paragraph 25 of Ajay Vinodchandra Shah Vs State of Maharasthra & Anr. (supra) which read to the effect:- "25. Thus, the condition imposed at the time of pending appeal of the payment of the amount of compensation should not curtail the liberty of the appellant/accused. Such condition if not fulfilled, then, amount is recoverable finally, if the conviction is maintained. The amount can be recoverable with interest. If conviction is confirmed, the order of a higher rate of interest or commercial rate of interest, may be passed; or in default maximum sentence may be imposed. Moreover, the fine or compensation is made recoverable as per the provision of section 421 of Code of Criminal Procedure.", which have been set aside as not being good law in so far as the consequences of the non-payment of the amount under Section 148 of the NI Act is concerned. Moreover, the fine or compensation is made recoverable as per the provision of section 421 of Code of Criminal Procedure.", which have been set aside as not being good law in so far as the consequences of the non-payment of the amount under Section 148 of the NI Act is concerned. That in so far as Ajay Vinodchandra Shah (supra) states the distinction between Section 143A and Section 148 of the NI Act, it cannot be ignored nor can it be overlooked that the observations therein in relation to the distinction between Section 143A and Section 148 of the NI Act were not set aside by the Honble Supreme Court. 39. That Section 143A of the NI Act, 1881 is brought into play during trial is apparent through the provisions of Section 143 A of the NI Act, 1881 itself, when it states that the Court "trying" an offence under Section 138 of the NI Act, 1881 may order the drawer of the cheque to pay interim compensation to the complainant in summary trial or in a summons case where he pleads not guilty to the accusation made in the complaint and in any other case upon framing of charge with directions in terms of Section 143A(2) of the NI Act, 1881 that the interim compensation under sub-Section (1) of Section 143A shall not exceed 20% of the amount of the cheque. 40. That an accused is not guilty until proved to be so and is presumed to be innocent till held guilty is implicit through Section 143A of the NI Act, 1881 sub Clause (4) thereof itself, whereby it has been directed as under:- "S. 143 A: Power to direct interim compensation 4. If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year within sixty days from the date of the order, or withing such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant. ... ..", 41. To consider whether a legislation is mandatory or directory in nature as laid down by the Hon"ble Supreme Court in "Mohan Singh And Others Vs. ... ..", 41. To consider whether a legislation is mandatory or directory in nature as laid down by the Hon"ble Supreme Court in "Mohan Singh And Others Vs. International Airport Authority of India And Others" (1997) 9 SCC 132 , regard must be had to the context of the said matter and the object of the provision and use of the word "shall" or "may" is not decisive. If a statutory remedy is provided for violation of the said provision then it can be construed as a mandatory provision as laid down by the Hon"ble Supreme Court in "State of U.P. And Others Vs. Babu Ram Upadhya" AIR 1961 SC 751 . 42. It is essential to observe that as stated in Craies on Statute Law, 5 th edition, at page 242 : "No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed." As to whether the statute is mandatory or directory depends upon the intent of the legislature and not always upon the language in which the intent is couched. 43. The difference between the provisions of Section 143A and 148 of the NI Act, 1881 has already been spelt out elsewhere hereinabove as detailed in the verdict of the Hon"ble High Court of Bombay in "Ajay Vinodchandra Shah vs. The State Of Maharashtra And Anr." 2019 (4) MHLJ 705 . 43. The difference between the provisions of Section 143A and 148 of the NI Act, 1881 has already been spelt out elsewhere hereinabove as detailed in the verdict of the Hon"ble High Court of Bombay in "Ajay Vinodchandra Shah vs. The State Of Maharashtra And Anr." 2019 (4) MHLJ 705 . The factum that apart from the recovery of interim compensation as awarded under Section 143A of the NI Act, 1881 being made recoverable as if it were a fine under Section 421 of the Cr.P.C., 1973 and report from the recovery thereof being provided for, there is no further sentence provided under the statute for the same specifically when there is no imprisonment specified in terms of the enactment itself under Section 143A(5) of the NI Act, 1881 of any default sentence in the event of the fine not being recovered, the same itself makes it apparent that the intent of the legislature in using the word "may" in Section 143A(1) thereof for directing the drawer of the cheque to pay the interim compensation to the complainant at the stages as provided therein in Sub-Clauses (a) and (b) thereof which has mandatorily in terms of Section 143A(2) thereof been directed not to exceed 20% of the amount of the cheque, can only be termed to be directory in nature and cannot be held to be mandatory as sought to be interpreted by the learned Trial Court vide the impugned order. 44. Though, the other aspect, which cannot be overlooked is that the Statement of Objects and Reasons of the amendment in Section 148 of the NI Act, 1881 as amended by way of the Amendment Act No. 20 of 2018 as referred to in paragraph 7.2 of the verdict in Surender Singh Deswal @ Col. S.S. Deswal (supra) which reads to the effect:- "7.2 While considering the aforesaid issue/question, the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act, as amended by way of Amendment Act No. 20/2018 and Section 148 of the N.I. Act as amended, are required to be referred to and considered, which read as under: "The Negotiable Instruments Act, 1881 (the Act) was enacted to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques. The said Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of dishonour of cheques. However, the Central Government has been receiving several representations from the public including trading community relating to pendency of cheque dishonour cases. This is because of delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings. As a result of this, injustice is caused to the payee of a dishonoured cheque who has to spend considerable time and resources in court proceedings to realize the value of the cheque. Such delays compromise the sanctity of cheque transactions. 2. It is proposed to amend the said Act with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy. 3. It is, therefore, proposed to introduce the Negotiable Instruments (Amendment) Bill, 2017 to provide, inter alia, for the following, namely: (i) to insert a new section 143A in the said Act to provide that the Court trying an offence under section 138, may order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and in any other case, upon framing of charge. The interim compensation so payable shall be such sum not exceeding twenty per cent of the amount of the cheque; and (ii) to insert a new section 148 in the said Act so as to provide that in an appeal by the drawer against conviction under Section 138, the Appellate 13 Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial court. 4. The Bill seeks to achieve the above objectives." "148. Power to Appellate Court to order payment pending appeal against conviction. 4. The Bill seeks to achieve the above objectives." "148. Power to Appellate Court to order payment pending appeal against conviction. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial Court: Provided that the amount payable under this subsection shall be in addition to any interim compensation paid by the appellant under section 143A. (2) The amount referred to in subsection (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant. (2) The amount referred to in subsection (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant. (3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal: Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.", making it apparent that through the said Negotiable Instruments (Amendment) Bill, 2017, Section 143A was inserted to provide that the Court trying an offence under Section 138 of the NI Act, 1881, may order the drawer of the cheque to pay interim compensation to the complainant in a summary trial or a summons case where he pleads not guilty to the accusation made in the complaint and in any other case upon framing of charge and that the interim compensation so payable shall be such sum not exceeding 20% of the amount of the cheque and vide the said Negotiable Instruments (Amendment) Bill, 2017, Section 148 was sought to be inserted into the Act to provide an appeal by the drawer against conviction under Section 138 of the NI Act, 1881 where 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. 45. The Statement of Objects and Reasons for introduction of Section 143A and 148 of the NI Act, 1881 vide the Negotiable Instruments (Amendment) Bill, 2017 is as under:- "STATEMENT OF OBJECTS AND REASONS The Negotiable Instruments Act, 1881 (the Act) was enacted to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques. The said Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of dishonour of cheques. The said Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of dishonour of cheques. However, the Central Government has been receiving several representations from the public including trading community relating to pendency of cheque dishonour cases. This is because of delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings. As a result of this, injustice is caused to the payee of a dishonoured cheque who has to spend considerable time and resources in court proceedings to realise the value of the cheque. Such delays compromise the sanctity of cheque transactions. 2. It is proposed to amend the said Act with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy. 3. It is, therefore, proposed to introduce the Negotiable Instruments (Amendment) Bill, 2017 to provide, inter alia, for the following, namely: (i) to insert a new section 143A in the said Act to provide that the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and in any other case, upon framing of charge. The interim compensation so payable shall be such sum not exceeding twenty per cent. of the amount of the cheque; and (ii) to insert a new section 148 in the said Act so as to provide that in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial court. 4. The Bill seeks to achieve the above objectives." 46. of the fine or compensation awarded by the trial court. 4. The Bill seeks to achieve the above objectives." 46. As regards the observations of the learned Trial Court to the effect that the Court at the stage of awarding the interim compensation, is not required to consider the strength of the defence of the accused and the same is immaterial at this stage and though, the arguments led on behalf of the accused may seem attractive at the first blush, the same cannot be gone into by the Court at the stage of consideration of directing payment of interim compensation in terms of Section 143A of the NI Act, 1881 as that would amount to a mini trial, it is essential to observe that the provisions of Section 294 of the Cr.P.C., 1973 apply to all proceedings before any Court where the Code of Criminal Procedure, 1973 is applicable. Section 294 of the Cr.P.C., 1973 provides to the effect:- "294. No formal proof of certain documents. (1) Where any document is filed before any Court by the prosecution or the accused, the particulars of every such document shall be included in a list and the prosecution or the accused, as the case may be, or the pleader for the prosecution or the accused, if any, shall be called upon to admit or deny the genuineness of each such document. (2) The list of documents shall be in such form as may be prescribed by the State Government. (3) Where the genuineness of any document is not disputed, such document may be read in evidence in any inquiry, trial or other proceeding under this Code without proof of the signature of the person to whom it purports to be signed: Provided that the Court may, in its discretion, require such signature to be proved." 47. Furthermore, as laid down by the Division Bench of this Court in "Dayawati Vs. Yogesh Kumar Gosain" in CRL.REF.No.1/2016 decided on 17.10.2017, the question No.III reads to the effect:- "Question III: In cases where the dispute has already been referred to mediation What is the procedure to be followed thereafter? Furthermore, as laid down by the Division Bench of this Court in "Dayawati Vs. Yogesh Kumar Gosain" in CRL.REF.No.1/2016 decided on 17.10.2017, the question No.III reads to the effect:- "Question III: In cases where the dispute has already been referred to mediation What is the procedure to be followed thereafter? Is the matter to be disposed of taking the very mediated settlement agreement to be evidence of compounding of the case and dispose of the case, or the same is to be kept pending, awaiting compliance thereof (for example, when the payments are spread over a long period of time, as is usually the case in such settlement agreements)? In the context of reference of the parties, in a case arising under Section 138 of the NI Act, to mediation is concerned, the following procedure is required to be followed:", referred by the Metropolitan Magistrate vide order dated 13.01.2016 has been answered by the Division Bench of this Court to the effect:- " . III (i) When the respondent first enters appearance in a complaint under Section 138 of the NI Act, before proceeding further with the case, the Magistrate may proceed to record admission and denial of documents in accordance with Section 294 of the Cr.P.C., and if satisfied, at any stage before the complaint is taken up for hearing, there exist elements of settlement, the magistrate shall inquire from the parties if they are open to exploring possibility of an amicable resolution of the disputes.." 48. That Section 294 of the Cr.P.C., 1973 is applicable to the proceedings in relation to complaints filed under Section 138 of the NI Act, 1881 has been so observed by the Hon"ble High Court of Calcutta in "Gouranga Sarkar Versus Biswajit Sarkar & Anr." 2005 SCC OnLine Cal 15 vide observations in paragraph 8 thereof, which reads to the effect:- "8. It further appears to me that the learned Magistrate did not mark the cheques as exhibit though the cheques were lying in Court record. P.W. 1 in his evidence stated that he has filed all the papers in Court. The learned Magistrate was totally unaware of the provisions of section 294 of the Code. It further appears to me that the learned Magistrate did not mark the cheques as exhibit though the cheques were lying in Court record. P.W. 1 in his evidence stated that he has filed all the papers in Court. The learned Magistrate was totally unaware of the provisions of section 294 of the Code. Section 294 of the Code makes it clear that, "(1) Where any document is filed before any Court by the prosecution or the accused, the particulars of every such document shall be included in a list and the prosecution or the accused, as the case may be, or the pleader for the prosecution or the accused, if any, shall be called upon to admit or deny the genuineness of each such document (3) where the genuineness of any document is not disputed, such document may be read in evidence in any enquiry; trial or other proceeding under this Code without proof of the signature of the person to whom it purports to be signed provided that the Court may, in its discretion, require such signature to be proved." Lower Court Record reveals that the complainant through his lawyer by "firisti" i.e. list of documents dated 6.3.99 presented in Court some of the documents including the original cheques as well as bank endorsement, postal A/D Card, etc. The original cheques are lying in case record which were filed along with list of documents on 6.3.99. P.W. 1 was examined on 6.3.99. The order sheet of the learned Magistrate dated 6.3.99 does not reveal that the accused or his lawyer questioned genuineness of the documents filed by the complainant in Court on 6.3.99. The learned Magistrate by his order did not reveal that the said cheques or other documents filed on 6.3.99 requires proof of signature. It is clear, therefore, the learned Magistrate did not at all follow the provisions of law and was totally oblivious of provisions of section 294 of the Code. The learned Magistrate had duty to examine any witness under section 311 of the Code to reveal truth for just decision of the case if he had any doubt in mind regarding issue of cheques. There was no suggestion also to P.W. 1 that the signature appearing on the cheques were not the signature of accused. The learned Magistrate had duty to examine any witness under section 311 of the Code to reveal truth for just decision of the case if he had any doubt in mind regarding issue of cheques. There was no suggestion also to P.W. 1 that the signature appearing on the cheques were not the signature of accused. When the accused or his lawyer did not dispute genuineness of the documents which were filed in Court the learned Magistrate committed error by coming to the conclusion that accused denied issue of cheques. In fact, there was nothing in case record to show that the accused denied issue of cheques and, the accused did not challenge filing of the documents by the complainant." 49. Likewise, the verdict of the Hon"ble High Court of Bombay in "Geeta Marine Services Pvt. Ltd. and another Versus State and another" 2008 SCC OnLine Bom 924 also so holds qua the applicability of Section 294 of the Cr.P.C., 1973 in proceedings under Section 138 of the NI Act, 1881 vide observations in paragraphs 13, 14 & 15 thereof, which read to the effect:- "13. That takes me to the main issue which is canvassed in these petitions regarding procedure to be followed regarding marking the documents as exhibits. I am dealing with a case where the parties lead evidence by filing affidavits. Whenever, an affidavit in lieu of examination-in-chief is filed, the witness has to enter the witness box and formally depose to the contents of the affidavit and only thereafter an affidavit can be read as examinationin-chief [See Shelatkar Construction Pvt. Ltd. v. Creative Enterprises, 2008 All MR (Cri) 475]. After the said formal examination-in-chief is recorded, the stage contemplated by section 294 of the said Code of 1973 will come in the picture. The documents are required to be tendered along with a list and the rival party is called upon to admit or deny genuineness of such documents. As per sub-section (3) of section 294 where the genuineness of any document is not disputed, such document may be read in evidence in the trial without proof of the signature of the person by whom it purports to be signed. As per sub-section (3) of section 294 where the genuineness of any document is not disputed, such document may be read in evidence in the trial without proof of the signature of the person by whom it purports to be signed. Thus, when genuineness of the document produced is not disputed after being called upon as required by sub-section (1) of section 294, the said document can be treated as proved and examination of a witness for proving the document is not required. In this behalf, it will be necessary to refer to a decision of Full Bench of this Court in the case of Shaikh Farid Hussainsab v. State of Maharashtra, 1981 Mh.L.J. 345. Paragraph 7 of the said judgment reads thus: "7. Section 294 of the Code is introduced to dispense with this avoidable waste of time and facilitate removal of such obstruction in the speedy trial. The accused is now enabled to waive the said right and save the time. This is a new provision having no corresponding provision in the repealed Code of Criminal Procedure. It requires the prosecutor or the accused, as the case may be, to admit or deny the genuineness of the documents sought to be relied against him at the outset in writing. On his admitting or indicating no dispute as to genuineness, the Court is authorised to dispense with its formal proof thereof. In fact after indication of no dispute as to the genuineness, proof of documents is reduced to a sheer empty formality. The section is obviously aimed at undoing the judicial view by legislative process." (Emphasis supplied) 14. The issue before the Full Bench was answered in paragraph 18 which reads thus: "18. We accordingly hold that sub-section (3) of section 294 of the Code covers post- such documents can be read in evidence as genuine without the formal proof. In our view, Ganpat Raoji's case is not correctly decided." (Emphasis added) Therefore, the document which is admitted under sub-section (3) of section 294 of the said Code of 1973 can be read in evidence as genuine without the formal proof of the said document. Therefore, after affidavit in lieu of examination-in-chief is filed and formal evidence of the witness is recorded, the exercise provided by section 294 of the said Code of 1973 will have to be completed by the learned Magistrate. 15. Therefore, after affidavit in lieu of examination-in-chief is filed and formal evidence of the witness is recorded, the exercise provided by section 294 of the said Code of 1973 will have to be completed by the learned Magistrate. 15. The real issue arises when a dispute is raised regarding the proof of a document or admissibility of a document in evidence which is tendered along with a list of documents or along with an affidavit in lieu of examination-in-chief. My attention was invited to the decision of the Apex Court in the case of Bipin Panchal (supra). Paragraphs 12 to 15 of the said decision read thus: "12. It is an archaic practice that during the evidence collecting stage, whenever any objection is raised regarding admissibility of any material in evidence the Court does not proceed further without passing order on such objection. But the fall out of the above practice is this: Suppose the trial Court, in a case, upholds a particular objection and excludes the material from being admitted in evidence and then proceeds with the trial and disposes of the case finally. If the appellate or revisional Court, when the same question is re-canvassed, could take a different view on the admissibility of that material in such cases the appellate Court would be deprived of the benefit of that evidence, because that was not put on record by the trial Court. In such a situation the higher Court may have to send the case back to the trial Court for recording that evidence and then to dispose of the case afresh. Why should the trial prolong like that unnecessarily on account of practices created by ourselves. Such practices, when realised through the course of long period to be hindrances which impede steady and swift progress of trial proceedings, must be recast or re-mouled to give way for better substitutes which would help acceleration of trial proceedings. 13. When so recast, the practice which can be a better substitute is this: Whenever an objection is raised during evidence taking stage regarding the admissibility of any material or item of oral evidence the trial Court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment. If the Court finds at the final stage that the objection so raised is sustainable the Judge or Magistrate can keep such evidence excluded from consideration. In our view there is no illegality in adopting such a course. However, we make it clear that if the objection relates to deficiency of stamp duty of a document the Court has to decide the objection before proceeding further. For all other objections the procedure suggested above can be followed. 14. The above procedure, if followed, will have two advantages. First is that the time in the trial Court, during evidence taking stage, would not be wasted on account of raising such objections and the Court can continue to examine the witnesses. The witnesses need not wait for long hours, if not days. Second is that the superior Court, when the same objection is re-canvassed and reconsidered in appeal or revision against the final judgment of the trial Court, can determine the correctness of the view taken by the trial Court regarding that objection, without bothering to remit the case to the trial Court again for fresh disposal. We may also point out that this measure would not cause any prejudice to the parties to the litigation and would not add to their misery or expenses. 15. We, therefore, make the above as a procedure to be followed by the trial Courts whenever an objection is raised regarding the admissibility of any material or any item of oral evidence." (Emphasis supplied) against which an SLP was filed in the Hon"ble Supreme Court of India which was dismissed vide order dated 05.12.2008 in Special Leave to Appeal (Crl.) 8436-8438/2008 titled S.N. Khetan vs M/S KSL & Industries and Anr. 50. The verdict of the Hon"ble High Court of Punjab & Haryana in "Joginder Singh Vs. Anurag Malik" in CRM-M-4629 of 2015, a verdict dated 23.02.2015 also in relation to proceedings under Section 138 of the NI Act, 1881 observes categorically to the effect that in case the petitioner who was facing proceedings under Section 138 of the NI Act, 1881 in case of a dishonoured cheque seeks to establish some documents, it would be open to the petitioner to avail the benefit of the provisions of Section 294(3) of the Cr.P.C., 1973. 51. 51. Furthermore, the order of the Hon"ble Supreme Court in Suo Moto Writ (CRL) No.(s) 1/2017 categorically observes vide order dated 20.04.2021 that the Draft Rules of Criminal Practice, 2021 annexed to this order be finalized in terms of the discussion in the order with it having been directed vide paragraph 19(a) thereof to the effect:- "(a) All High Courts shall take expeditious steps to incorporate the said Draft Rules, 2021 as part of the rules governing criminal trials, and ensure that the existing rules, notifications, orders and practice directions are suitable modified, and promulgated (wherever necessary through the Official Gazette) within 6 months from today. If the state government"s co-operation is necessary in this regard, the approval of the concerned department or departments, and the formal notification of the said Draft Rules, shall be made within the said period of six months.", and significantly, in the said Draft Rules of Criminal Practice, 2021, it has been observed in Chapter V Miscellaneous Directions No.19 (i), directions for expeditious trial to the effect:- "19.DIRECTIONS FOR EXPEDITIOUS TRIAL i. In every enquiry or trial, the proceedings shall be held as expeditiously as possible, and, in particular, when the examination of witnesses has once begun, the same shall be continued from day to day until all the witnesses in attendance have been examined, unless the court finds the adjournment of the same beyond the following day to be necessary for reasons to be recorded. (section 309 (1) Cr.PC.). For this purpose, at the commencement, and immediately after framing charge, the court shall hold a scheduling hearing, to ascertain and fix consecutive dates for recording of evidence, regard being had to whether the witnesses are material, or eyewitnesses, or formal witnesses or are experts. The court then shall draw up a schedule indicating the consecutive dates, when witnesses would be examined; it is open to schedule recording of a set of witness" depositions on one date, and on the next date, other sets, and so on. The court shall also, before commencement of trial, ascertain if the parties wish to carry out admission of any document under Section 294, and permit them to do so, after which such consecutive dates for trial shall be fixed. The court shall also, before commencement of trial, ascertain if the parties wish to carry out admission of any document under Section 294, and permit them to do so, after which such consecutive dates for trial shall be fixed. ..", thus, the same also in view of the observations in "Geeta Marine Services Pvt. Ltd. and another Versus State and another" 2008 SCC OnLine Bom 924, "Gouranga Sarkar Versus Biswajit Sarkar & Anr." 2005 SCC OnLine Cal 15, "Joginder Singh Vs. Anurag Malik" in CRM-M-4629 of 2015 & Suo Moto Writ (CRL) No.(s) 1/2017, it becomes apparent that the provision of Section 143A of the NI Act, 1881 has essentially to be held to be directory and cannot be termed to be mandatory to the effect that the Trial Court has mandatorily to award the interim compensation under Section 143A of the NI Act, 1881 in all proceedings tried under Section 138 of the NI Act, 1881 on the mere invocation thereof by a complainant and thereby order in terms of Section 143A(2) thereof, the interim compensation to the tune of 20% of the amount of the cheque invoked. 52. The applicability of Section 294 of the Cr.P.C., 1973 has been made essential in all proceedings in criminal trials and undoubtedly, the proceedings under Section 138 of the NI Act, 1881 are termed to be quasi criminal in nature. 53. 52. The applicability of Section 294 of the Cr.P.C., 1973 has been made essential in all proceedings in criminal trials and undoubtedly, the proceedings under Section 138 of the NI Act, 1881 are termed to be quasi criminal in nature. 53. Furthermore, the observations of the learned Trial Court to the effect that even if it be assumed that the provisions of Section 143A of the NI Act, 1881 is discretionary in nature, the Court is still clothed with the powers to grant interim compensation to the complainant after providing sufficient reasons, it is essential to observe that the award of interim compensation in terms of Section 143A of the NI Act, 1881 has to be after providing sufficient reasons and whilst taking the same into account, the determination of interim compensation directed to be paid by the petitioners herein to the extent of the maximum of 20% of the cheque amount to the complainants without even considering the submissions that have been sought to be raised by the petitioners in relation to bank statements of the complainant and without resorting to the provisions of Section 294 of the Cr.P.C., 1973 cannot be held to be within the contours of Section 143A of the NI Act, 1881 to be with sufficient reasons. Furthermore, there are no inherent powers conferred on a criminal court of a Magistrate dehors enabling provisions of a statute. 54. In view thereof, the impugned order dated 21.09.2021 of the learned Metropolitan Magistrate (NI Act), Digital Court-01, PHC/New Delhi in CC No.CC NI Act 12-20 titled as "SAVITA SURYAVANSHI Vs. M/S JSB CARGO AND FREIGHT FORWARDER PVT LTD" and in CC No.CC NI Act 100-20 titled as "SUNEEL SURYAVANSHI Vs. M/S JSB CARGO AND FREIGHT FORWARDER PVT LTD is set aside with the matter being remanded back to the learned Trial Court to dispose of the application under Section 143A of the NI Act, 1881 filed by the complainants of the said complaint cases seeking interim compensation from the accused after invocation of Section 294 of the Cr.P.C., 1973 and considering the submissions that are made by the petitioner in response to the applications under Section 143A of the NI Act, 1881 and taking into account that vide this verdict it is categorically held to the effect that the provision of Section 143A of the NI Act, 1881 is directory in nature and not mandatory. 55. 55. The learned Trial Court shall however dispose of the application under Section 143A of the NI Act, 1881 within a period of 30 days from the receipt of this order. 56. The petitions CRL.M.C.2663/2021 and CRL.M.C.2730/2021 are disposed of accordingly. 57. Copy of this judgment be circulated to all Subordinate Criminal Courts of Delhi by the learned Registrar General of this Court.