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Indian Laws - Case Laws
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2023 (7) TMI 1356
Demand of illegal gratification by the accused - HELD THAT:- In the case on hand the prosecution failed to provide cogent evidence to prove the demand of illegal gratification by the appellant herein since the complainant-PW.2 turned hostile and PW.1 and PW.3, being the hearsay witness, they deposed that PW.2 only informed them and the police about the demand and acceptance of the bribe by the accused. When the complainant himself turned hostile, then evidentiary value cannot be attached to the evidence of PW.1 and PW.3 and moreover, the audio clip in respect of the demand is not clearly admitted by the Investigation Officer-PW.5 so also the witness PW.3.
The Hon'ble Apex Court in NEERAJ DUTTA VERSUS STATE (GOVT. OF N.C.T. OF DELHI) [2022 (12) TMI 1490 - SUPREME COURT]] held that "absence of proof of demand for illegal gratification and mere possession or recovery of currency notes is not sufficient to constitute such offence and the presumption under Section 20 of the Act can be drawn only after the demand for and acceptance of illegal gratification is proved.
In the instant case on hand, since the complainant himself disowned his statement and totally given go by to the prosecution case and also there is a cloud in the evidence of PW.1 and PW.3, in such eventuality, the benefit of doubt should be extended to accused - the failure of prosecution to prove the demand of illegal gratification would be fatal and mere recovery of the amount from the person of the accused of the offence under Sections 7 or 13 of the Act would not entail his conviction there under. In the instant case, the amount of Rs. 4,500/-recovered is not from the person of the accused, but from the table drawer of the accused. When PW.1-the complainant himself categorically denied the aspect of demand and acceptance of the bribe and the audio clipping was also not clear, in such circumstances, inference cannot be drawn against the accused.
The prosecution failed to prove the guilt of accused in this case beyond reasonable doubt - the prosecution failed to prove the guilt of accused beyond reasonable doubt. Accordingly the conviction held against accused by the trial Court is liable 8 to be set-aside.
Appeal allowed.
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2023 (7) TMI 1350
Quashing the punishment order - time limitation - Doctrine of Reasonableness - Direction to petitioners to prepare the pension papers of the deceased Govt. employee in accordance with the relevant rules and draw and disburse such pension and other pre-retiral dues admissible to the applicant/legal heirs of the deceased Govt. employee - HELD THAT:- Undoubtedly, if the reasons are candid and convincing, then the Courts are empowered to exercise its power of discretion for the purpose of condoning the delay. Power of discretion is a double-edged weapon. Thus, discretionary powers are to be exercised cautiously and uniformly so as to avoid any prejudice to either of the parties. Exercise of power of discretion if made excessively, it would defeat the purpose and object of the law of limitation. The Courts are expected not to travel beyond the permissible extent, so as to condone the enormous delay in a routine or mechanical manner. Power of discretion is to be exercised to mitigate the injustice, if any occurred to the litigants.
The law of limitation has got a definite reasoning and logic. Various time limitations prescribed under many statutes are adopting the “Doctrine of Reasonableness”. The principles of reasonableness would be adopted with reference to the nature of litigations to be instituted. Various time limits are prescribed for civil litigations, appeals and other varieties of litigations, considering various factors and by applying the doctrine of reasonableness. Thus, the law of limitation became substantive and to be followed scrupulously in all circumstances and on exceptional cases, the delay is to be condoned, if the reasons are genuine and acceptable. In absence of the same, the objection raised by the petitioner is well justified and the consequential order passed by the Odisha Administrative Tribunal is illegal, arbitrary, unreasonable and liable to be set aside.
The order of punishment was been passed on 07.04.2007 and, as such, there was no valid and justifiable reason to entertain such original application after long lapse of more than eight years. More so, neither the deceased government employee nor the opposite party no.1 preferred appeal against the said order of punishment. Thereby, the order of punishment imposed by the disciplinary authority reached its finality, as a result of which recovery of amount of Rs.3,56,185/- has been sought to be made from the DCRG and pension of the deceased government employee. Once the order of punishment reached its finality, the tribunal could not have passed the order impugned stating inter alia that this is neither a sanction nor an order of the Government as per the stipulation in Rule-7 of the Pension Rules.
If the original application itself is barred by limitation and this question was raised before the tribunal, it is incumbent upon the tribunal to pass order on the question of limitation instead of passing the order on merits.
The order dated 27.10.2016 passed by the Odisha Administrative Tribunal, Principal Bench, Bhubaneswar in O.A. No. 1605 of 2015 cannot be sustained in the eye of law and the same is liable to be quashed and is hereby quashed. Since the deceased government employee died long since and an outstanding dues of Rs.3,56,185/- has been determined against him, retaining such amount, any other pensionary benefits as due and admissible to the Government employee, shall be paid to opposite party no.1 to resolve the dispute for all times to come.
The writ petition stands disposed of.
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2023 (7) TMI 1348
Illegal gratification - HELD THAT:- In the present case, it is the evidence of P.W.2 that on 12.08.2010 at 10.30 a.m. received phone call from accused and demanded illegal gratification of Rs. 9,000/- at any cost and he has recorded the same in his mobile. The mobile number of P.W.2 is 9886993653 and mobile number of accused is 9448406990. In view of the above evidence of P.W.2, he claims that accused has called him over phone and demanded illegal gratification of Rs. 9,000/- at any cost. The evidence of P.W.9 would go to show that he has collected the call details of mobile used by accused Ex.P.34. P.W.9 claims that accused through the mobile of Vittal Dasar called the complainant over phone and demanded illegal gratification - The evidence of P.W.11 who is the investigating officer from registering the case till the conclusion of trap panchanama did never speak anything that accused has used the mobile of P.W.5 to contact complainant over phone to make demand of illegal gratification.
The trial Court has not considered the effect of no work of complainant pending as on the date of filing complaint or on the date of trap, further there being no any concrete evidence to prove demand for illegal gratification erroneously proceeded to convict the accused which cannot be legally sustained. Therefore, interference of this Court is required.
Judgment of the trial Court on the file of IV Additional District and Sessions Judge and Special Judge (PCA) Belagavi, in special Case No. 132/2011 dated 02.02.2013 hereby set-aside - The accused is acquitted and his bail bond stands discharged.
Appeal filed by the appellant/accused is hereby allowed.
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2023 (7) TMI 1329
Denial of Back wages - appellant failed to discharge the burden of proving that he was not gainfully employed from the date of removal from service - HELD THAT:- In the case of NATIONAL GANDHI MUSEUM VERSUS SUDHIR SHARMA [2021 (9) TMI 1523 - SUPREME COURT], this Court held that the fact whether an employee after dismissal from service was gainfully employed is something which is within his special knowledge. Considering the principle incorporated in Section 106 of the Indian Evidence Act, 1872, the initial burden is on the employee to come out with the case that he was not gainfully employed after the order of termination. It is a negative burden - Since, it is a negative burden, in a given case, an assertion on oath by the employee that he was unemployed, may be sufficient compliance in the absence of any positive material brought on record by the employer.
In the statement of claim filed thirteen months after termination, a specific assertion was made by the appellant that he was unemployed. Neither any material has been placed by the respondent on record to show that the appellant had a source of income nor anything material has been elicited by the respondent while cross-examining the respondent - The law is very well settled. Even if Court passes an order of reinstatement in service, an order of payment of back wages is not automatic. It all depends on the facts and circumstances of the case. It is true that affidavit filed by the appellant on 18th July 2008 before the Labour Court making a categorical statement on oath that he was not employed from the date of termination was withdrawn and in the fresh affidavit filed by way of evidence, such a specific contention was not raised. But there are two factors in favour of the appellant. In the statement of claim, it is specifically asserted that till August 1997 when the statement of claim was filed, the appellant found it difficult to get employment and in fact he was unemployed.
The respondent has not come out with the case that from the date of his removal from service, the appellant had another source of income. Thus, the appellant discharged the burden on him by establishing that he was unemployed at least till August 1997. From the chart submitted on record by the learned counsel appearing for the respondent, it is found that the gross salary of the appellant on the date of reinstatement was Rs.18,830/. On the date of removal, his salary was approximately Rs.4,000/ per month.
Thus, considering the facts of the case, it will be appropriate if a sum of Rs.3 lakhs is ordered to be paid to the appellant in lieu of back wages. To that extent, the appeal must succeed.
Accordingly, the award of the Labour Court dated 17th March 2009 and impugned judgments of the High Courts are modified - the respondent are directed to pay a sum of Rs.3 lakhs to the appellant as back wages within a period of two months from today - appeal allowed in part.
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2023 (7) TMI 1304
Seeking grant of bail - petitioner contends that the further pre-trial incarceration would cause an irreversible injustice to the petitioner and family - HELD THAT:- The petitioner is in custody since 20.12.2022. Given the penal provisions invoked viz-a-viz pre-trial custody, coupled with the primafacie analysis of the nature of allegations, and the other factors peculiar to this case, there would be no justifiability for further pre-trial incarceration at this stage, subject to the compliance of terms and conditions mentioned in this order. Thus, the previous criminal history of the petitioner is not being considered strictly at this stage as a factor for denying bail.
The possibility of the accused influencing the investigation, tampering with evidence, intimidating witnesses, and the likelihood of fleeing justice, can be taken care of by imposing elaborative and stringent conditions. In Sushila Aggarwal v. State (NCT of Delhi), [2020 (1) TMI 1193 - SUPREME COURT], the Constitutional Bench held that unusually, subject to the evidence produced, the Courts can impose restrictive conditions.
The petitioner shall not influence, browbeat, pressurize, make any inducement, threat, or promise, directly or indirectly, to the witnesses, the Police officials, or any other person acquainted with the facts and the circumstances of the case, to dissuade them from disclosing such facts to the Police, or the Court, or to tamper with the evidence - Within fifteen days of release from prison, the petitioner shall procure a smartphone and inform its IMEI number and other details to the SHO/I.O. of the Police station mentioned above. The petitioner shall always keep the phone location/GPS on the “ON” mode. Whenever the Investigating officer asks to share the location, the petitioner shall immediately do so.
Petition allowed.
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2023 (7) TMI 1232
Dishonour of Cheque - insufficiency of funds - acquittal of the accused - discharge of liability or not - Burden of rebuttal of presumption - Section 138 of the Negotiable Instruments Act.
Burden of rebuttal of presumption - HELD THAT:- The presumption mandated by Section 139, does indeed include the existence of a legally enforceable debt or liability. Bare denial of the passing of the consideration and existence of debt, is not enough to rebut the presumption. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complaint in a criminal trial - Apart from adducing direct evidence to prove that the consideration did not exist, or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant.
In the present case, the accused persons could not/did not discharge their liability under Section 139 of the N.I Act.
The complainant has proved the issuance of the cheque by the accused firm by a partner. No evidence otherwise has been adduced. The dishonour of the cheque and the due service of notice has also been duly proved. Thus, the findings of the trial court being not in accordance with the evidence on record and with law is liable to be set aside. The cheque is of the year 2002. More than 20 years have passed. The complainant has proved his case against the accuseds/respondents by way of oral evidence and documents.
The accuseds/respondents no. 1 to 3 are found guilty and convicted of offence punishable under Section 138 of the N.I. Act and sentenced to pay compensation of Rs.50 lakhs within one month from the date of this order, in default to suffer simple imprisonment for a period of one year in respect of respondents/accuseds no.2 and 3 and attachment in respect of the respondent/accused no.1 firm.
Appeal disposed off.
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2023 (7) TMI 1169
Dishonour of Cheque - prosecution based upon second or successive dishonour of the cheque - HELD THAT:- As per settled law and proviso (a) of Section 138 of the 1881 Act, successive presentation of cheque is permissible within the period of its validity. The issue whether the prosecution based upon second or successive dishonour of the cheque is permissible or not, is no longer res integra and a three-Judges Bench of Hon'ble Apex Court in MSR LEATHERS VERSUS S PALANIAPPAN & ANR [2012 (10) TMI 232 - SUPREME COURT], held that there is nothing in the provisions of Section 138 of the Act that forbids the holder of the cheque to make successive presentation of the cheque and institute the criminal complaint based on the second or successive dishonour of the cheque on its presentation.
Admittedly, successive presentation within the validity period of cheque is permissible. Another proviso (138(b)) requires that demand for payment by notice in writing has to be made within 30 days after information is received about return of cheque as unpaid. Thus once, successive presentation is permissible and cheque can be presented any number of times during its validity period, as a natural corollary of the same, drawee is required to be bound by successive information received about encashment or return, and demand for payment within 30 days from any fresh information can be raised. However, clause (c) makes it mandatory to file complaint in case drawer fails to make payment within 15 days of receipt of notice which means once demand notice is issued, thereafter no presentation is permitted.
Reliance placed on the judgment of MSR Leathers is misconceived on two counts. Firstly, it is required to be noticed that in paras 4 and 5 of the complaint, the respondent-complainant has mentioned that the cheque was presented again on an assurance given by the petitioner, while this was not the case in D.V. VANITHA VERSUS S.L. VEZHAVENDHAN [2022 (2) TMI 1381 - MADRAS HIGH COURT] and additionally this scenario is specifically covered by the reasoning given in MSR's case - Secondly, in Vanitha's case, Division Bench was exercising revisional jurisdiction after trial has completed and thus was having the benefit of observing and examining all the aspects of the case, while in the present case the trial is at very initial stage only and this Court does not have the benefit of examining the evidence and submissions made from both the sides.
When the cheque has been successively presented within its validity period and demand notice in writing has been issued within 30 days of the receipt of information from the bank regarding the return of cheque as unpaid; no ground is made out for any intervention by this Court and accordingly, present petition is dismissed.
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2023 (7) TMI 1108
Scope of the arbitration agreement / MOU - MOU entered into by the brothers to conduct business - Section 8 of the Arbitration and Conciliation Act Act - - HELD THAT:- The narration of facts indicates that the MoU dated 14 September 2010 is between the appellant and the first respondent. The appellant instituted two suits. In the first suit, the first respondent has been impleaded as the first defendant while Sachdeva and Sons Industries Private Limited is impleaded as the second respondent. Admittedly, Sachdeva and Sons Industries Private Limited is not a party to the MoU which is executed solely between the appellant and the first respondent. In the second suit, apart from the two defendants who are parties to the first suit, relief has been sought against Canara Bank - it is evident that there are several parties to the suit who are not parties to the arbitration agreement. The MoU which is executed between the parties indicates that the Sachdeva family comprising of both the appellant and the first respondent was carrying on business in several companies, partnership firms and proprietorship under the joint ownership of the Sachdeva family. The MoU contains a description of the respective family units and their concerns. The MoU indicates that there are certain non-family shareholdings.
Since the MoU was executed exclusively between the appellant and the first respondent, the reference to arbitration under Section 8 of the trial Judge was patently in error. Neither Canara Bank nor the company are parties to the arbitration agreement. The MoU has been executed between the appellant and the first respondent. The non-family shareholdings, in any event, cannot be bound by the terms of the MoU since they are not parties to the document.
The impugned judgment and order of the Single Judge of the High Court is set aside - appeal allowed.
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2023 (7) TMI 1107
Dishonour of Cheque - insufficiency of funds - vicarious liability - it is claimed that petitioner is neither the Director nor the signatory of the opposite party no.2, but the company secretary - HELD THAT:- The petitioner a company secretary not being the signatory to the cheque, was also not involved in running the day to day affairs of the Company. The petitioner was only the company Secretary. The job was to assist the persons involved in running the day to day affairs of the Company - the petitioner is not liable in the present case, there also being no specific averments against her in the petition of complaint.
The proceeding under Section 138/141 of the Negotiable Instrument Act, 1881 (as amended up to date) pending before the court of the learned Chief Metropolitan Magistrate at Calcutta, is hereby quashed in respect of only the petitioner, Namarta Vashisht. The trial in respect of the other accused persons to proceed in accordance with law.
Revision application allowed.
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2023 (7) TMI 1106
Dishonour of Cheque - during the pendency of the present petition, parties have settled their dispute - compounding of offence - waiver of compounding fee - HELD THAT:- Hon’ble The Supreme Court in the case of DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT] had held that in case of dishonour of cheque, accused convicted, there is no stage prescribed for compounding of offence under the Act and it was observed that “It is true that the application under Section 147 of the Negotiable Instruments Act was made by the parties after the proceedings had been concluded before the Appellate Forum. However, Section 147 of the aforesaid Act does not bar the parties from compounding an offence under Section 138 even at the appellate stage of the proceedings.” It was further observed that, “Even though the imposition of costs by the competent court is a matter of discretion, the scale of costs has been suggested in the interest of uniformity. The competent Court can of course reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance.”
The petitioner is permitted to compound the offence. However, this Court is not inclined to accept the prayer for waiving off the compounding fee, but considering the mitigating circumstances of the petitioner brought out by his learned counsel, the same is reduced in view of the afore-referred judgment and he is ordered to deposit an amount of Rs.10,000/- as costs, with the Haryana State Legal Services Authority on or before 30.07.2023.
Revision petition disposed off.
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2023 (7) TMI 1105
Dishonour of Cheque - accused persons were summoned by the learned MM - accused resides beyond the jurisdiction of the territory of the Court - no inquiry carried out by the learned MM - HELD THAT:- In view of the decision of Hon’ble Apex Court in Sunil Todi v. State of Gujarat [2021 (12) TMI 175 - SUPREME COURT], the Magistrate while considering the complaint in relation to offence under Section 138 of Negotiable Instruments Act under Section 202 of Cr.P.C., in case where an accused resides outside the jurisdiction of the Court, is not required to examine the witness on oath for conducting the enquiry as contemplated under Section 202 of Cr.P.C., rather can itself advert to the documents and evidence by way of affidavit filed on record by the complainant and reach a satisfaction as to whether the accused should be summoned or not.
A perusal of the impugned order reveals that the learned MM has considered the contents of the complaint, the documents annexed thereto, the affidavit filed by the complainant as well as the submissions made by the learned counsel for the complainant and only thereafter, having been satisfied that prima facie case existed against the accused persons, had issued summons to the accused persons. Having considered the same, this Court does not find any illegality or perversity in the impugned order as far as conformity of the same with Section 202 of Cr.P.C. is concerned, especially in light of the judicial precedents of Hon’ble Apex Court.
Jurisdiction - HELD THAT:- It is not in dispute that the cheque in question was presented by the complainant/ respondent no. 1 at HDFC Bank,Kailash Building, No. 26, Kasturba Gandhi Marg, New Delhi-110001 which is situated within the territorial jurisdiction of Delhi and the cheque had got dishonoured upon presentation with the said bank. Thus, the courts in Delhi would have the jurisdiction to try the present complaint.
Next claim is petitioner no. 2 and 3 had resigned from the accused firm before the issuance of cheque in question dated 06.02.2018 and its subsequent dishonor on 26.02.2018 - HELD THAT:- This Court can reach only one conclusion that the issues raised before this Court are all triable issues, which would require detailed consideration of the documents as per law, which may include all the relevant document pertaining to the resignations if any of the petitioners, and as to what role they had in issuance of cheque in question and dishonour of the same - However, as prima facie apparent from the records of the case, the complainant in the complaint under Section 138 of Negotiable Instruments Act has specifically averred that the accused firm represented by its Managing Director i.e. accused no. 2along with the other accused persons, including the petitioners, had approached the complainant for grant of loan and all the partners in connivance with each other had issued the cheque in question for repayment of the said loan. It was also averred that the present petitioners were active partners of the accused firm and, thus, were liable for the issuance as well as dishonour of the cheque in question.
This Court cannot hold anything contrary to what has been pleaded by the complainant as the same would require scrutiny of the relevant materials and documents as well as examination of witnesses by the concerned Court during the course of trial. The petitioners have failed to bring on record any unimpeachable material or material of sterling quality to show that they had resigned from the accused firm or were not responsible for day-to-day affairs of the firm when the cheque was issued or dishonored or that the dishonoring of cheque in question was not attributable to any negligence or connivance or consent on their part - there are no reasons to interfere with the impugned summoning order, the present petition stands dismissed.
Petition dismissed.
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2023 (7) TMI 1059
Dishonour of Cheque - existence of legally enforceable debt or liability - vicarious liability of nominee and non-executive directors - HELD THAT:- Taking into consideration the various provisions of Cr.PC which have been discussed in various judgments time and again demonstrate that the Negotiable Instruments Act, provides sufficient opportunity to a person who issues the cheque.
Once a cheque is issued by a person, it must be honoured and if it is not honoured, the person is given an opportunity to pay the cheque amount by issuance of a notice and if he still does not pay, he is bound to face the criminal trial and consequences. It is seen in many cases that the petitioners with malafide intention and to prolong the litigation raise false and frivolous pleas and in some cases, the petitioners do have genuine defence, but instead of following due procedure of law, as provided under the N.I. Act and the Cr.PC, and further, by misreading of the provisions, such parties consider that the only option available to them is to approach the High Court and on this, the High Court is made to step into the shoes of the Metropolitan Magistrate and examine their defence first and exonerate them. The High Court cannot usurp the powers of the Metropolitan Magistrate and entertain a plea of accused, as to why he should not be tried under Section 138 of the N.I. Act. This plea, as to why he should not be tried under Section 138 of the N.I. Act is to be raised by the accused before the Court of the Metropolitan Magistrate under Section 251 of the Cr.PC & under Section 263(g) of the Cr.PC.
In view of the procedure prescribed under the Cr.PC, if the accused appears after service of summons, the learned Metropolitan Magistrate shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under Section 251 Cr.PC and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under Section 145(2) of N.I. Act for recalling a witness for cross-examination on plea of defence - Once the summoning orders in all these cases have been issued, it is now the obligation of the accused to take notice under Section 251 of Cr. PC., if not already taken, and enter his/her plea of defence before the concerned Metropolitan Magistrate’s Court and make an application, if they want to recall any witness. If they intend to prove their defence without recalling any complainant witness or any other witnesses, they should do so before the Court of Metropolitan Magistrate.
Moreover, as far as the contention of the Ld. Counsel for the petitioners that the petitioners were only nominee and nonexecutive directors of M/s Sure Waves MediaTech Private Limited (SMPL) at the relevant time when the offence was committed and were neither in charge of the conduct of business nor involved in the day to day affairs of SMPL, does not cut much ice as perusal of Form No. MGT-7 nowhere shows that the petitioners were non-executive directors and E-Form DIR 12 also reveals that there was no change in directors of M/s Sure Waves MediaTech Private Limited in 2021 as well as in 2022 and the petitioners were only nominee directors of SMPL.
There are no flaw or infirmity in the proceedings pending before the Trial Court - petition dismissed.
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2023 (7) TMI 1058
Dishonour of Cheque - Legally enforceable debt or not - acquittal of the accused - rebuttal of mandatory presumption - HELD THAT:- Once the fundamental ingredients which gives rise to cause of action under Section-138 of N. I. Act have been established a mandatory presumption under Section-139 of N. I. Act, is effected in favour of complainant and it also extends to the existence of legally enforceable liability itself.
A three judged bench of Hon'ble Apex Court in RANGAPPA VERSUS SRI MOHAN, [2010 (5) TMI 391 - SUPREME COURT] has held that this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.”
On perusal of the record it is found that complainant did not adduce the original deed of partnership and accordingly not exhibited the same. Furthermore Sri Asish Datta (arbitrator) was not cited as a witness by the complainants and no original A/C No. 11866553823 (C/C) was submitted and exhibited. Moreover, at the time of preparation of deed of addendum 03 persons namely Raiharan Majumder, Ashis Datta and Umesh Majumder put their signatures as a witnesses but they were not examined by the complainant and in respects of cheques, as per deed of addendum, were issued on 19.12.2016 and it is deposited in the bank on 31.07.2017 i.e. to say beyond the period of limitation i.e. six months. Thus, this Court is also of the opinion that the accused has successfully rebutted the mandatory presumption of law and also successfully controverted the story of the complainant.
Complainant in his complaint petition as well as in examination-in-chief stated that they have been doing business of brick industries and construction work of the M/S Vida Engineering Company Ltd., and the accused was made attorney on behalf of the said Vida Engineering Company Ltd. but no document is placed by the complainants to prove the same and it is also admitted by the complainants in their cross-examination. The complainant is also failed to prove that on the day of issuing of cheque the liability of accused was equivalent to the cheque amount. As per Exbt.2, i.e. the reply of notice to accused person and he admitted that there has been a debt of Rs.29,00,000/- with SBI, Belonia Branch in the name of partnership farm.
Section-138 creates a deeming offence. The provisos prescribe stipulations to safeguard the drawer of the cheque by providing them the opportunity of responding to the notice and an opportunity to repay the cheque amount. The conditions stipulated in the provisos need to be fulfilled in addition to the ingredients in the main provision of Section-138. It has already been concluded above that the offence under Section-138 arises only when a cheque that represents a part or whole of the legally enforceable debt at the time of encashment is returned by the bank unpaid. Since the cheque did not represent the legally enforceable debt at the time of encashment, the offence under Section-138 is not made out.
The subject matter involved in this petition is not the cheque amount but, it is a settlement of account of the transaction made is the amount made under the demand notice i.e. Rs.13,50,000/- but whereas the cheque amount is Rs.10,00,000/- each x 4 = Rs.40,00,000/-. Since, litigation under Section-138 is purely technical in nature, the scope of the same cannot be enlarged.
This Court is of the view that the appellants have failed to prove their projected case against the respondent No.1 and consequently, the instant appeal preferred by the appellants stands dismissed. Hence, the order of acquittal recorded by the learned Court below does not deserve any interference. The Judgment and order of acquittal passed by the learned Court below is affirmed.
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2023 (7) TMI 1057
Dishonour of Cheque - suspense of sentence subject to deposit of 20% of cheque amount - contention of the petitioner is that the Trial Court had not properly considered the evidence in its proper perspective - HELD THAT:- It is seen that the petitioner has filed these petitions on a wrong notion that the order passed by the Principal Sessions Judge, Erode, is under Section 143A of NI Act. Section 143A of NI Act provides power to direct interim compensation at the stage of trial on sufficient cause being shown by the drawer of the cheque. In Sub-section (2) of Section 143A of NI Act, it is clear that the interim compensation under sub-section (1) shall not exceed 20% of the amount of the cheque. Under Sub-section (1) of Section 148 of NI Act, it is the Appellate Court may order the appellant to deposit minimum of 20% of the fine or compensation awarded by the Trial Court.
At the stage of trial, interim compensation shall not exceed 20% of the amount of the cheque on sufficient cause being shown by the drawer of the cheque and on the other hand, in the appellate stage this 20% is the minimum amount to be deposited as interim compensation and the condition of sufficient cause is not provided for the reason that the accused after trial, convicted by the Trial court and on conviction, prefers the appeal. This being so, the petitioner doubting the order of the learned Sessions Judge and camouflaging the same to be an order under Section 143A of NI Act is not proper and sustainable.
Petition dismissed.
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2023 (7) TMI 1010
Revocation of permission granted to Madhyamam Broadcasting Limited (MBL) by Union Ministry of Information and Broadcasting (MIB) to uplink and downlink a news and current affairs television channel called “Media One” - HELD THAT:- The findings are summarised as below:
(i) Security clearance is one of the conditions required to be fulfilled for renewal of permission under Uplinking and Downlinking Guidelines;
(ii) The challenge to the order of the MIB and judgment of the High Court on procedural grounds is allowed for the following reasons:
(a) The principles of natural justice were constitutionalised by the judgement of this Court in Maneka Gandhi [1978 (1) TMI 161 - SUPREME COURT]. The effect is that the courts have recognised that there is an inherent value in securing compliance with the principles of natural justice independent of the outcome of the case. Actions which violate procedural guarantees can be struck down even if non-compliance does not prejudice the outcome of the case. The core of the principles of natural justice breathes reasonableness into procedure. The burden is on the claimant to prove that the procedure followed infringes upon the core of procedural guarantees;
(b) The appellants have proved that MBL’s right to a fair hearing has been infringed by the unreasoned order of the MIB dated 31 January 2022, and the non-disclosure of relevant material to the appellants, and its disclosure solely to the court. The burden then shifts on the respondents to prove that the procedure that was followed was reasonable and in compliance with the requirements of Articles 14 and 21 of the Constitution. The standard of proportionality has been used to test the reasonableness of the procedure.
(c) The judgments of this court in EX. ARMYMEN'S PROTECTION SERVICES P. LTD. VERSUS UNION OF INDIA (UOI) AND ORS. [2014 (2) TMI 1422 - SUPREME COURT] and DIGI CABLE NETWORK (INDIA) PVT. LTD. AND ORS. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 2026 - SUPREME COURT] held that the principles of natural justice may be excluded when on the facts of the case, national security concerns overweigh the duty of fairness;
(d) Though confidentiality and national security are legitimate aims for the purpose of limiting procedural guarantees, the state has been unable to prove that these considerations arise in the present factual scenario. A blanket immunity from disclosure of all investigative reports cannot be granted;
(e) The validity of the claim of involvement of national security considerations must be assessed on the test of (i) whether there is material to conclude that the non-disclosure of information is in the interest of national security; and (ii) whether a reasonable prudent person would draw the same inference from the material on record;
(f) Even assuming that non-disclosure is in the interest of confidentiality and national security, the means adopted by the respondents do not satisfy the other prongs of the proportionality standard. The non-disclosure of a summary of the reasons for the denial of security clearance to MBL, which constitutes the core irreducible minimum of procedural guarantees, does not satisfy the suitability prong;
(g) The courts assess the validity of public interest immunity claims, which address the same harms as the sealed cover procedure, based on the structured proportionality standard. The power of courts to secure material in a sealed cover when contradistinguished with the scope of assessment of public interest immunity claims is rather unguided and ad-hoc. The standard of review that is used by the courts in public interest immunity claims and the lack of such a standard in sealed cover proceedings to protect procedural safeguards indicates that public interest immunity claims constitute less restrictive means. Additionally, while public interest immunity claims conceivably impact the principles of natural justice, sealed cover proceedings infringe the principles natural justice and open justice;
(h) The courts could take the course of redacting confidential portions of the document and providing a summary of the contents of the document to fairly exclude materials after a successful public interest immunity claim; and
(iii) The challenge to the order of MIB is allowed on substantive grounds. The non-renewal of permission to operate a media channel is a restriction on the freedom of the press which can only be reasonably restricted on the grounds stipulated in Article 19(2) of the Constitution. The reasons for denying a security clearance to MBL, that is, its alleged anti- establishment stance and the alleged link of the shareholders to JEI-H, are not legitimate purposes for the restriction of the right of freedom of speech protected under Article 19(1)(a) of the Constitution. In any event, there was no material to demonstrate any link of the shareholders, as was alleged.
MIB shall now proceed to issue renewal permissions in terms of this judgment within four weeks and all other authorities shall co-operate in issuing necessary approvals. The interim order of this Court shall continue to operate until the renewal permissions are granted - appeal allowed.
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2023 (7) TMI 878
Dishonour of Cheque - permission to compound the offence - matter settled between the parties - HELD THAT:- Keeping in view the fact that parties to the lis have compounded the offence, which is permissible under the provisions of the N.I. Act, the present petition is allowed by setting aside the impugned judgment of conviction and order of sentence, referred to above and accused is acquitted from the offence, punishable under Section 138 of the N.I. Act, subject to payment of 10% of the cheque amount, as compounding fee. The amount shall be deposited by the accused with the Secretary, H.P. State Legal Service Authority, within two months from today, failing which the revision petition shall be deemed to have been dismissed.
The present Revision Petition is allowed.
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2023 (7) TMI 761
Enforceability of Arbitration agreement even when the Work Order is unstamped and unenforceable under the Indian Stamp Act, 1899.
Finding in N.N. GLOBAL [2021 (1) TMI 1121 - SUPREME COURT] - The Court found that an Arbitration Agreement is a distinct and separate agreement, which is independent from the substantive commercial contract in which it is embedded. Under the Doctrine of Kompetenz–Kompetenz, the Arbitral Tribunal had competence to rule on its own jurisdiction, including objections with regard to the existence, validity and scope of the Arbitration Agreement. Section 16(1) of the Act was relied upon. The Court made a copious reference to case law in support of the Doctrine of Kompetenz-Kompetenz. Section 5 of the Act contemplated minimal judicial interference. The Court referred to the Maharashtra Stamp Act, 1958. Section 34 of the said Act, essentially, is pari materia with Section 35 of the Stamp Act, 1899 hereinafter referred to as the Stamp Act. There are other provisions, which essentially follow the same pattern as is contained in the latter Act. The Court, thereafter, went on to refer to Item 63 of Schedule I of the Maharashtra Stamp Act, 1958, which dealt with ‘Works Contract’. It was found that the Stamp Act is a fiscal measure. Thereafter, the Court went on to discuss the Judgment of this Court reported in SMS Tea Estates Private Limited v. Chandmari Tea Company Private Limited.
Finding in SMS TEA ESTATES [2011 (7) TMI 1289 - SUPREME COURT] - When a lease deed or any other instrument is relied upon as contending the arbitration agreement, the court should consider at the outset, whether an objection in that behalf is raised or not, whether the document is properly stamped. If it comes to the conclusion that it is not properly stamped, it should be impounded and dealt with in the manner specified in Section 38 of the Stamp Act. The court cannot act upon such a document or the arbitration clause therein. But if the deficit duty and penalty is paid in the manner set out in Section 35 or Section 40 of the Stamp Act, the document can be acted upon or admitted in evidence.
Finding in GARWARE - The Bench of two learned Judges took the view that the Arbitration Clause contained in the sub-contract would not exist as a matter of law until the sub-contract was duly stamped. It was further found that Section 11(6A) deals with existence as opposed to Section 8, and Section 45 of the Act.
AS PER K. M. JOSEPH, J.
Whether the statutory bar contained in Section 35 of the Stamp Act applicable to instruments chargeable to stamp duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, as being non-existent, pending payment of stamp duty on the substantive contract/instrument?
HELD THAT:- The view taken in SMS Tea Estates as followed in Garware and by the Bench in Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram and other Charities v. Bhaskar Raju and Brothers and others [2020 (2) TMI 678 - SUPREME COURT] as to the effect of an unstamped contract containing an Arbitration Agreement and the steps to be taken by the Court, represent the correct position in law as explained by us hereinbefore. N.N. Global was wrongly decided, when it held to the contrary and overruled SMS Tea Estates and Garware.
An instrument, which is exigible to stamp duty, may contain an Arbitration Clause and which is not stamped, cannot be said to be a contract, which is enforceable in law within the meaning of Section 2(h) of the Contract Act and is not enforceable under Section 2(g) of the Contract Act. An unstamped instrument, when it is required to be stamped, being not a contract and not enforceable in law, cannot, therefore, exist in law. Therefore, we approve of paragraphs-22 and 29 of Garware. To this extent, we also approve of Vidya Drolia (supra), insofar as the reasoning in paragraphs-22 and 29 of Garware is approved.
The true intention behind the insertion of Section 11(6A) in the Act was to confine the Court, acting under Section 11, to examine and ascertain about the existence of an Arbitration Agreement.
The Scheme permits the Court, under Section 11 of the Act, acting on the basis of the original agreement or on a certified copy. The certified copy must, however, clearly indicate the stamp duty paid as held in SMS Tea Estates. If it does not do so, the Court should not act on such a certified copy.
An Arbitration Agreement, within the meaning of Section 7 of the Act, which attracts stamp duty and which is not stamped or insufficiently stamped, cannot be acted upon, in view of Section 35 of the Stamp Act, unless following impounding and payment of the requisite duty, necessary certificate is provided under Section 42 of the Stamp Act - the provisions of Sections 33 and the bar under Section 35 of the Stamp Act, applicable to instruments chargeable to stamp duty under Section 3 read with the Schedule to the Stamp Act, would render the Arbitration Agreement contained in such instrument as being non-existent in law unless the instrument is validated under the Stamp Act.
In a given case, the Court has power under paragraph-5 of the Scheme, to seek information from a party, even in regard to stamp duty.
As per RASTOGI, J.
The existence of a copy/certified copy of an arbitration agreement whether unstamped/ insufficiently stamped at the pre-referral stage is an enforceable document for the purposes of appointment of an Arbitrator under Section 11(6A) of the Act, 1996 where the judicial intervention shall be minimal confined only to the prima facie examination of “existence of an arbitration agreement” alone keeping in view the object of 2015 amendment and the courts must strictly adhere to the time schedule for the appointment of Arbitrator prescribed under Section 11(13) of the Act, 1996.
All the preliminary/debatable issues including insufficiently stamped/unduly stamped or validity of the arbitration agreement etc. are referrable to the Arbitrator/Arbitral Tribunal under Section 16 of the Act, 1996 which, by virtue of the Doctrine of Kompetenz - Kompetenz has the power to do so.
The decision in SMS Tea Estates Private Limited stands overruled. Paras 22 and 29 of Garware Wall Ropes Limited which are approved in paras 146 and 147 in Vidya Drolia and Others are overruled to that extent.
AS PER HRISHIKESH ROY, J.
Whether the statutory bar under Section 35 titled “Instruments not duly stamped inadmissible in Evidence” of the Stamp Act,1899 would be attracted when an arbitration agreement is produced under Section 11(6) of the Arbitration Act,1996?
HELD THAT:- The objective behind the enactment of the Arbitration Act,1996 was to, inter alia, avoid procedural complexity and the delay in litigation before Courts. Impounding and stamping at the Section 11 stage would frustrate the very purpose of the amended Arbitration Act,1996 as the enforcement of arbitration agreements would be stalled on an issue, which is capable of being resolved at a later stage. To defer stamping to the stage of the arbitrator would in my view achieve the objective of both the Arbitration Act, 1996 and the Stamp Act, 1899.
The contours of the jurisdiction of the judge referring matters for arbitration, cannot be permitted to suffer from confusion and ambiguity. As can be seen, the present 5 judge-Bench could not provide clarity on the issue referred to us, on account of the fractured verdict, leading to legal uncertainty. The constitution of a larger Bench in this Court is certainly not commonplace as the last occasion when 7 judges assembled was in the year 2017. Around 5 matters as I am informed, are already awaiting the attention of 7 judges Bench. In such backdrop, the interplay between the Acts and how its objective is to be achieved in the course of Arbitral proceedings either at the referral stage or thereafter is much too important to be left lingering for a clarificatory verdict by a larger Bench. Therefore, I would appeal to the legislative wing of the State to revisit the Amendments which may be necessary in the Stamp Act,1899 in its application to the Arbitration Act,1996. The State might put into place a convenient mechanism which would efface the inconsistencies in both the Arbitration Act,1996 and the Stamp Act,1899. If we look at the legislative intent of the Arbitration Act,1996 and what our country is hoping to be as the destination of choice for Arbitration, I’m of the considered opinion that it would be appropriate to interpret the statutory interplay in a constructive manner without defeating the legislative intent and thwarting the speedy referral to arbitration.
The examination of stamping and impounding need not be done at the threshold by a Court, at the pre-reference stage under Section 11 of the Arbitration Act, 1996 - Non-stamping/insufficient stamping of the substantive contract/instrument would not render the arbitration agreement nonexistent in law and unenforceable/void, for the purpose of referring a matter for arbitration. Garware wrongly applied the principle in Hyundai [2018 (8) TMI 1469 - SUPREME COURT] to hold that an arbitration agreement would not exist-in-law if it is unstamped/insufficiently stamped. An arbitration agreement should not be rendered void if it is suffering stamp deficiency which is a curable defect. To this extent, Garware and Hyundai do not set out the correct law.
AS PER C. T. RAVIKUMAR, J.
Whether the Court called upon to invoke the power under Section 11 (6) should or could exercise the power coupled with duty under Section 33 of the Indian Stamp Act, 1899, when the document carrying the arbitration agreement or arbitration clause is found unstamped or insufficiently stamped or without going into such matter, should it confine its exercise of power in the matter of appointment of Arbitrator(s) only and refrain itself from proceeding further in view of the mandate under Section 33 of the Indian Stamp Act, 1899?
The Bar under Section 35 of the Stamp Act on admission of instruments not duly stamped in evidence, as is evident from proviso (a) to it, is not permanent and is curable by following procedures provided thereunder and making an endorsement as provided under Section 42(1) of the Stamp Act. Sub-section (2) of Section 42 makes it clear that every such instrument so endorsed shall thereupon be admissible in evidence and be acted upon and authenticated as it had been duly stamped. The upshot of the discussion is that being unstamped or insufficiently stamped, the agreement would not be available to be ‘admitted in evidence’ and ‘to be acted upon’, till it is validated following the procedures prescribed under the provisions of the Stamp Act and till then, it would not exist ‘in law’.
As already found the nature of exercise of power under Section 11 (6) is ‘judicial’ and therefore, it was thought only fit to permit to exercise such power only on the original instrument or else, on its certified copy, to be understood with reference to Section 63 (1) read with Section 74 and 76 of the Evidence Act. When once the intention behind paragraph 2(a) of the scheme is understood in that manner with reference to the provisions under Section 63 (1), 74, 76 and 79 of the Evidence Act, the expression ‘certified copy’ employed in paragraph 2(a) of the scheme framed under Section 11(10) of the Act cannot be interpreted to mean any other kind of copies provided under Section 63 of the Evidence Act other than under Section 63 (1) of the Evidence Act.
It cannot be presumed that despite the conspicuous difference in the said expressions, under paragraph 2 (a) ‘certified copy’ alone was permitted to be appended along with the application under Section 11 of the Act, unintentionally. - I am of the considered view that it was so prescribed, fully understanding the nature of exercise of power under Section 11 (6) of the Act and also the presumption of genuineness and correctness of ‘certified copy’ available by virtue of Section 79 of the Evidence Act.
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2023 (7) TMI 760
Dishonour of Cheque - discharge of legal liability - vicarious liability of director - cheque was issued prior to the date of director joining the company - HELD THAT:- In the present case, learned counsel for the petitioners had argued that the petitioners had joined the accused company as directors on 23.09.2015, whereas the cheques in question had been issued on 30.12.2013 i.e. about two years prior to their joining. It was also argued that the instructions for stop-payment of the cheques were issued in April, 2015 i.e. about five months prior to the joining of petitioners as directors in the accused company. In this regard, this Court notes that the cheques in question are all dated 21.09.2017 i.e. about two years after the petitioners had joined the accused company as directors and had been dishonored on 01.12.2017. As regards the contention that the cheques were blank and undated when issued in the year 2013, and the same had later been filled and presented for encashment by the complainant, this Court notes that whether or not the cheques in question were undated or blank or issued as security cheques are all triable issues, to be decided upon leading evidence, and the same cannot be gone into by this Court at this stage.
This Court deems it appropriate to refer to the decision of Hon’ble Apex Court in case of Sunil Todi v. State of Gujarat [2021 (12) TMI 175 - SUPREME COURT] whereby it has been held The order of this Court in Womb Laboratories holds that the issue as to whether the cheques were given by way of security is a matter of defence. This line of reasoning in Womb Laboratories is on the same plane as the observations in HMT Watches, where it was held that whether a set of cheques has been given towards security or otherwise or whether there was an outstanding liability is a question of fact which has to be determined at the trial on the basis of evidence. The rationale for this is that a disputed question of this nature cannot be resolved in proceedings under Section 482 CrPC, absent evidence to be recorded at the trial.
As apparent from the records of the case, the complainant in the complaint under Section 138 of NI Act has specifically averred that the accused company had issued the cheques in question and accused no. 2 to 10 were its directors and accused no. 11 was the company secretary, all of whom were in charge of and responsible for the conduct and affairs of accused company and the cheques in question had been issued with the consent, knowledge and connivance of all the accused, as all of them had been taking part in day-to-day activities of accused company - the cheques in question are all dated 21.09.2017, i.e. when the petitioners were undisputedly the directors in the accused company. The petitioners have failed to bring on record any unimpeachable material or material of sterling quality to show that they were not responsible for day-to-day affairs of the company when the cheque was issued or dishonored or that the dishonoring of cheque in question was not attributable to any negligence or connivance or consent on their part. The role of each petitioner in commission of offence, if any, can become clear only during the course of trial, and cannot be examined in detail by this Court while exercising jurisdiction under Section 482 Cr.P.C.
Having found no reasons to interfere with the impugned summoning order, the present petitions stand dismissed.
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2023 (7) TMI 759
Dismissal of complaint for non-prosecution / non appearance before the court - Exercise of discretion by Trial Court under the provisions of Section 256 of the Code of Criminal Procedure - complainant has not remained present on two dates at the stage of recording the evidence - HELD THAT:- The learned Magistrate cannot simply say that the steps are not taken since long. Now, whether two day’s absence is sufficient for dismissal?. There is no straitjacket formula. It depends upon the facts. In particular case even six dates or more than that can be presumed to be sufficient for not dismissing the complaint. It is pure question of fact.
Learned Advocate Mr. Dave (respondent) is right that now-a-days you can see roznama online. He is right that the accused is not required to attend the Court and to reproduce record. However, two days absence cannot be said to be justifiable ground for dismissing the complaint. It is not job of the Court to see that the matters are dismissed just because either of party is not remaining present. The job of the Court is to see that justice is done by giving sufficient opportunities to the parties. Always there is rule of audi alteram partem. In this case, it is felt that the learned Magistrate has hastily dismissed the complaint. In fact, one option was available to learned Magistrate that is to say, while adjourning the matter he could have regulated conduct of the complainant, even by passing certain strict orders, that is to say, even by imposing cost. Learned Magistrate has simply considered absence of complainant only on two dates and dismissed the complaint.
The Respondent is justified in opposing the Appeal, on the basis of facts and circumstances. When the rights of both parties are balanced, the matter needs to be restored.
Leave to prefer an Appeal is granted - Matter restored back.
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2023 (7) TMI 758
Continuation of criminal proceedings when petitioner was exonerated in the departmental enquiry in the same set of allegation - Creation of false documents and drawing of monies by cheating the Government and misappropriation of Government funds.
HELD THAT:- On the basis of very same set of allegations, the proceedings i.e. both departmental as also criminal, were initiated against the petitioner. In so far as the departmental proceedings are concerned, it is evident from the material on record i.e. proceedings of the Director of Public Health and Family Welfare dated 10.01.2022 that the Charge referred to above, was dropped pursuant to a report submitted by the Inquiry Officer. In such circumstances, continuation of criminal proceedings with reference to the very same set of allegations, is not legally sustainable.
In Radheshyam Kerjiwal’s case [2011 (2) TMI 154 - SUPREME COURT], the Hon’ble Supreme Court was dealing with an issue with regard to impact of the findings recorded in adjudication proceedings under the provisions of Foreign Exchange Regulation Act, 1947 on criminal proceedings, and whether in case in the adjudication proceedings, the person concerned is exonerated, can he ask for dropping of the criminal proceedings on that ground. The said issue was answered by a majority of 2:1 in favour of the appellant before the Hon’ble Supreme Court, inter alia holding that in the case of the findings by the Enforcement Directorate in the adjudication proceedings that there is no contravention of the provisions of the Act, it would be unjust and abuse of process of the Court to permit the Enforcement Directorate to continue with the criminal prosecution.
In Ashoo Surendranath Tewari’s case [2020 (9) TMI 1150 - SUPREME COURT] a three member Bench of the Hon’ble Supreme Court, while referring the above said ratio laid down in Radheshyam Kerjiwal, set aside the Judgment of the High Court and that of the Special Judge and discharged the appellant therein from the offences under the Penal Code. The conclusion reached in the above said case was based on the Central Vigilance Commission’s (CVS) order which was in favour of the appellant and chances of conviction in a criminal Trial involving the same facts appear to be bleak.
This Court is of the opinion that the aforesaid judgments would squarely applies to the case of the petitioner. As the petitioner was exonerated in the departmental enquiry, continuation of proceedings in respect of same set of allegations is nothing but abuse of process of Court - Petition allowed.
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