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2021 DIGILAW 287 (MP)

Gopal Sharma v. Punjab Stores

2021-03-02

VISHNU PRATAP SINGH CHAUHAN

body2021
ORDER : Vishnu Pratap Singh Chauhan, J. 1. 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 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 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. The respondent again presented the cheques 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. 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. 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 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. 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; (b) in an appeal from a conviction- (i) reverse the finding and sentence and acquit or discharge the accused, or order him to be retried 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 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. 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. 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 the private parties involved in commercial transactions." 12. Hon'ble the Apex Court in the case of Kaushalya 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. 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 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 bona fide 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. 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 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.