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2016 (12) TMI 1093 - DELHI HIGH COURT

2016 (12) TMI 1093 - DELHI HIGH COURT - TMI - Offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - Dishonour of cheques (PDC) - default sentence in case of non-payment of the compensation - High Seas Sale Agreements - loss of government dues / input duty (tax) liability - Held that:- The issuance of legal notices by the respondent/Govt. company to the revisionists are not disputed between the parties. It is also not in dispute that the payment so demanded was made by th .....

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aint cases to attract the provisions of Section 138 read with Section 141 of the Negotiable Instruments, Act having different cause of action. Therefore, the substantive sentence awarded to the revisionists could have been one year concurrently rather than independent/consecutive sentence in each complaint cases - The conviction of the revisionists in the eighteen complaint case under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 is affirmed. - The Court belo .....

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cate. Mr.Izhar Ahmad, APP for State. JUDGMENT I.S.MEHTA, J: 1. The instant revision petitions, i.e., (1) Crl Rev.P. 745/2015, (2) Crl Rev.P. 141/2016, (3) Crl Rev.P. 142/2016, (4) Crl Rev.P. 143/2016, (5) Crl Rev.P. 144/2016, (6) Crl Rev.P. 145/2016, (7) Crl Rev.P. 146/2016, (8) Crl Rev.P. 147/2016, (9) Crl Rev.P. 148/2016, (10) Crl Rev.P. 149/2016, (11) Crl Rev.P. 150/2016, (12) Crl Rev.P. 151/2016, (13) Crl Rev.P. 152/2016, (14) Crl Rev.P. 153/2016, (15) Crl Rev.P. 154/2016, (16) Crl Rev.P. 15 .....

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. 910/2011, (6) CC No. 911/2011, (7) CC No. 906/2011, (8) CC No. 907/2011, (9) CC No. 898/2011, (10) CC No. 905/2011, (11) CC No. 904/2011, (12) CC No. 157/2013, (13) CC No. 902/2011, (14) CC No. 912/2011, (15) CC No. 901/2011, (16) CC No. 900/2011, (17) CC No. 908/2011 and (18) CC No. 897/2011, wherein the revisionists in the above mentioned complaint cases were sentenced to undergo simple imprisonment for one year for the offence punishable under Section 138 of the Negotiable Instruments Act, .....

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pany is in the business of exports, imports, deemed exports, third country trading, arranging finance, logistics, project exports and management. The respondent company had filed 18 complaint cases under Section 138 read with 141 of Negotiable Instruments Act, 1881 qua against the present revisionists and two other persons, i.e., Ms. Shakuntala Mittal and Mr. Ajay Jain (Directors of M/s Shree Sainath Wires Pvt.Ltd.). 3. It is stated that revisionist no.1 company i.e., Shree Sainath Wires Pvt. Lt .....

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agreements dated 18.03.2008 and 03.04.2008, described as 'Associateship Agreements' to effect import of the said goods from the foreign suppliers. 4. After the said agreements were executed, the respondent/complainant imported the said goods from the foreign suppliers vide two letters of credit bearing no. DCGLC 9032-/08 dated 19.03.2008 and DCGLC 9041-N 08 dated 09.04.2008. Thereafter, the revisionists and respondent entered into two agreements at New Delhi dated 13.05.2008 and 26.06.20 .....

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cure payments of the goods purchased by the respondent/complainant. On the basis of the representations made by the revisionists, the possession of the goods imported were handed over to the revisionists which revoked its charge and released the same from its pledge. Thereby, the respondent/complainant received physical delivery of the said goods. 6. It is stated in the complaint that the respondent/complainant had made payments to the bankers/foreign suppliers of the said goods on 10.02.2009 an .....

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ments. As on 31. 03.2010, the total outstanding liability of the revisionists was of ₹ 9,94,98,634/- against the said imports. The respondent/complainant under the above circumstances presented the cheques issued by the revisionists for collection on its bank but the same were returned unpaid with the remarks "Exceeds Arrangements" as per the return memo. Thereafter, the respondent/complainant issued legal notices against the revisionists but the revisionists failed to make the p .....

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.03.2010 26.04.2010 sent on 27/28.04.2010 4 903/2011 274651 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 5 910/2011 274659 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 6 911/2011 274659 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 7 906/2011 274793 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 8 907/2011 274790 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.201 .....

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Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 15 901/2011 274657 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 16 900/2011 274658 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 17 908/2011 274785 dt.31.0 3.2010 ₹ 50,00, 000/- 31.03.2010 26.04.2010 sent on 27/28.04.2010 18 897/2011 274786 dt.31.0 3.2010 Rs.50,00,000/- 31.03.2010 26.04.2010 sent on 27/28.04.2 010 7. The learned Metropolitan Magistrate after looking into the .....

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y a fine of ₹ 51 lakhs as compensation to the respondent/complainant and in default of payment the revisionist no.2 Mr. Satpal Jain was directed to undergo further simple imprisonment for a period of six months in each complaint cases. 8. Thereafter the revisionists aggrieved from the judgment and order on sentence dated 30.05.2014 filed 18 appeals before the learned Additional Sessions Judge and the learned Additional Sessions Judge dismissed the appeals vide a single order dated 03.11.20 .....

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visionists. In the two complaints bearing C.C.No.895/2011 and C.C.No.896/2011, the revisionists were acquitted and in the remaining 18 complaints, the revisionists were convicted and sentenced to undergo simple imprisonment of one year and fine/compensation of ₹ 51 lakhs in each complaint case and in default of payment of the said fine/compensation amount, to further undergo simple imprisonment of six months. The learned senior counsel further submits that in each complaint cases, challeng .....

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the revisionists that receipt of the legal notice is not disputed by the revisionists in all the 18 cases, however, despite the receipt of said legal notices the payment of the cheques amount were not made by the revisionists. The order on sentence is dated 30th May, 2014 and is placed on record of the paper book (in Crl.Rev.P. 745/2015). The learned senior counsel further contends that the respondent No.2 prosecuted the present revisionists for the offence under Section 138 N.I. Act in 20 compl .....

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yment of the compensation. The compensation does not keep the head of default. However, according to the learned senior counsel, the Hon ble Supreme Court in the case of R. Mohan vs. A.K. Vijaya Kumar and A.K. Vijaya Kumar vs. R. Mohan, reported at 2012 (8) SCC 721 on this point has allowed the default sentence in case of failure/ non-payment of compensation amount by the accused person. She has further drawn the attention of this Court to Section 219 of Cr.P.C. and contends that while putting t .....

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nclusion that the offence is one and the same and there are no distinct offences committed by the revisionists to impose Section 138 read with Section 141 of N.I. Act for different causes of actions. 11. The learned senior counsel further submits that though the substantive sentence awarded to the revisionists is one year, however, in effect it comes to 18 years in 18 complaints plus default sentence of 9 years (6 months each in 18 complaints). Thus, the total sentence awarded to the revisionist .....

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tar Hussain alias Ibrahim Ahmed Bhatti v. Assistant Collector of Customs (Prevention), Ahmedabad and Another reported in 1988 4 SCC 183 and Shyam Pal vs. Dayawati Besoya & Anr. reported in 2016 SCCOnline SC 1208, wherein the Hon ble Supreme Court has categorically stated that, where second offence is similar to the first offence, then the sentence should be concurrent. Only where second offence is different and distinct from the first offence, the sentence should run consecutively. All the 1 .....

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in three consecutive acts to be taken together comes 6 cases and default sentence is 6 months in each case so it will become three years. The learned senior counsel further submits that this is the maximum if at all the learned Metropolitan Magistrate could have awarded. 14. The learned senior counsel has further submitted that the revisionist no.2 is serving sentence since 3rd November, 2015, i.e., over a year has passed. The revisionist is a senior citizen and the learned Metropolitan Magistra .....

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2016. 16. The learned senior counsel has given the following options to be considered by this court: a) Substantive sentence should be made concurrent. b) Default sentence be given keeping in mind of Section 219 Cr.P.C. wherein it comes to 18 cases will come to 6 cases and default sentence will come to 36 months. It is further pleaded by the learned senior counsel for the revisionists that considering the age of the revisionist, the default sentence should be further reduced to satisfy the ends .....

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not been paid. The learned counsel for the respondent has pointed out that the default amounts are cheque amounts of the government money and the intent of the lower Court is to recover the government money as compensation. 18. The learned counsel for respondent submits that as per the four corners of legal umbrella, what the government will get is only the cheque amounts, however, as per Section 138 of NI Act, the default amount can be twice the cheque amount. The Agreement in question is of t .....

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unsel for respondent has further submitted that the awarded sentence in default of 9 years need not be interfered as they are required to run consecutively. The learned counsel for the respondent has further relied upon the case of V.K. Bansal v. State of Haryana and Ors. etc. etc. reported in (2013) 7 SCC 211 para17 to show that this Court has no power to order concurrent running of a sentence with respect to default sentence under section 353(3) of Cr.P.C. 21. In the instant revision petitions .....

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ces, whether in respect of the same person or not, he may be charged with, and tried at one trial for, any number of them not exceeding three. (2) Offences are of the same kind when they are punishable with the same amount of punishment under the same section of the Indian Penal Code (45 of 1860 ) or of any special or local law: Provided that, for the purposes of this section, an offence punishable under section 379 of the Indian Penal Code (45 of 1860 ) shall be deemed to be an offence of the s .....

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dent company which is a government company. All the cheques issued were of ₹ 50 lakhs each. The said cheques on presentation by the respondent were dishonoured with a remark 'exceeds arrangements'. In C.C.No. 894/2011 the demand notice was issued on 29.06.2010 and the same was dishonoured vide return memo dated 12.06.2010 with a remark 'exceeds arrangements' and in rest of the seventeen complaint cases, i.e., CC No. 909/2011, CC No. 899/2011, CC No. 903/2011, CC No. 910/201 .....

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en the parties. It is also not in dispute that the payment so demanded was made by the revisionists within the stipulated period or subsequent period till date which attracts conviction under Section 138 read with Section 141of the Negotiable Instruments, Act, 1881. 25. However, all the aforesaid cheques issued by the revisionist to the respondent company were to meet their liability amounting to ₹ 9,94,98,634 which forms part of one single transaction giving rise to one cause of action an .....

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(supra) and V.K. Bansal (supra) and the relevant paras are reproduced as under: "Mohd. Akhtar Hussain alias Ibrahim Ahmed Bhatti v. Assistant Collector of Customs (Prevention), Ahmedabad and Another reported in 1988 4 SCC 183 10. The basic rule of thumb over the years has been the so called single transition rule for concurrent sentences. If a given transaction constitutes two offences under two enactments generally, it is wrong to have consecutive sentences. It is proper and legitimate to .....

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ll not be affected by this direction. We do so because the provisions of Section 427 of the Code of Criminal Procedure do not, in our opinion, permit a direction for the concurrent running of the substantive sentences with sentences awarded in default of payment of fine/compensation." The Court below went wrong while awarding substantive sentence to run consecutively rather than to award the sentence concurrently as the cheques issued by the revisionists were to meet their outstanding liabi .....

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r section 29; (b) shall not, where imprisonment has been awarded as part of the substantive sentence, exceed one-fourth of the term of imprisonment which the Magistrate is competent to inflict as punishment for the offence otherwise than as imprisonment in default of payment of the fine. (2) The imprisonment awarded under this section may be in addition to a substantive sentence of imprisonment for the maximum term awardable by the Magistrate under section 29. It is an admitted fact emerging on .....

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one fourth comes to three months only in each complaint cases. However, the compensation amount so awarded could have said to be the cheque amount only because the cheques of ₹ 50 lakhs each were issued on 31.03.2010 and whereas the revisionists/convicts were awarded the sentence on 30.05.2014. 27. Section 138 of the Negotiable Instruments, Act 1881 is reproduce as under: "138. Dishonour of cheque for insufficiency, etc., of funds in the account. -Where any cheque drawn by a person o .....

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ce and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due .....

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e. Explanation.- For the purposes of this section, debt or other liability means a legally enforceable debt or other liability." 28. The Court below while awarding the sentence and fine as compensation under Section 357(3) of the Cr.P.C. could have increased the fine amount twice the cheque amount under Section 138 of the N.I. Act, whereas the learned Metropolitan Magistrate has awarded the compensation of only ₹ 51 lakhs in each complaint cases with the intent to recover the governme .....

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reproduced as under: "427. Sentence on offender already sentenced for another offence. (1) When a person already undergoing a sentence of imprisonment is sentenced on a subsequent conviction to imprisonment or imprisonment for life, such imprisonment or imprisonment for life shall commence at the expiration of the imprisonment to which he has been previously sentenced, unless the Court directs that the subsequent sentence shall run concurrently with such previous sentence: Provided that wh .....

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with such previous sentence." The aforesaid Section is a discretionary in nature and this court has already said so in the case of M/s U Turn Housing Pvt. Ltd. & Anr.(supra) and the Apex Court in the case of V.K. Bansal (supra) has made it clear that the concurrent running of the sentence should be limited only to substantive sentence and not qua against the default sentences. 30. As discussed above, the conviction of the revisionists in the eighteen complaint case under Section 138 rea .....

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