TMI Blog2019 (4) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, introduced vide Amendment dated 02.08.2018, to the cases which were already pending at the stage of the trial; or to the appeals arising from such trials, whether filed before or after the enforcement of the above-said provisions. Another significant aspect to be noted is that the Amendment Act has not specifically made the amendment to be applicable retrospectively. The notification of the amendment also does not specify any other date for the amendment to come in operation. In such a situation, Section 5 of the General Clauses Act would be of some help. This Court finds that all substantive laws have to be prospective in nature and applicability; unless prescribed to be retrospective, whereas all procedural laws have to be applicable to all cases immediately on their coming into operation, including the pending cases. Whether the provisions contained in Section 143-A and Section 148 of the Act are substantive in nature or the procedural one? - HELD THAT:- If the provisions are substantive in nature then the same cannot be applied retrospectively to the pending cases. However, if the same are procedural in nature then the same has to be applied to all the cases, includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate, Mr. Shashi Kumar Yadav, Advocate, Mr. Ramnish Puri, Advocate, Mr.Aditya Sanghi, Advocate, Mr. Chiranshu Bansal, Advocate, Mr. Vikram Singh For The Respondent : Mr. Naveen Sharma, Advocate ORDER Rajbir Sehrawat, J.(Oral) This Order shall dispose of a bunch of 14 petitions, challenging the Orders passed by the Trial Courts in the trials under Section 138 of the Negotiable Instruments Act 1881(hereinafter referred to as the Act ), whereby the Trial Courts have ordered the accused/petitioners to pay 20% or less of the cheque amount to the complainant under Section 143-A of the Act, as well as the petitions challenging the Orders passed by the Appellate Courts directing the convicts/appellants/petitioners herein to deposit 20% or more of amount of fine or compensation awarded by the Trial Court, during the pendency of the appeal, by exercising powers under Section 148 of the Act. CRM-M-13039-2019,CRM-M-13892-2019,CRM-M-14462- 2019 CRR-9872-2018 are the petitions wherein the Orders passed by the Trial Court under Section 143-A of the Act are under challenge and the CRM-M-49024-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een introduced by Section 143-A and Section 148 of the Act, which are as reproduced herein below:- 143-A. Power to direct interim compensation--- ( 1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of 1974), the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant--- ( a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and ( b) in any other case, upon framing of charge. ( 2) The interim compensation under sub-section(1) shall not exceed twenty per cent of the amount of the cheque. ( 3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque. ( 4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As stated above, the above said provisions were added to the Negotiable Instruments Act by Amendment Act No.20 of 2018. Section 1 (2) of the above said Amendment Act read as under:- ( 2) It shall come into force on such date as the Central Government may, by the notification in the Official Gazette, appoint. The Central Government had published this amendment in the notification dated 02.08.2018; after the same having received assent of the President of India on the same date. The Statement of Objects and Reasons of the above said amendment reads as under:- The Negotiable Instruments Act, 1881 (the Act) was enacted to define and amend the law relating to Promissory Notes, Bill of Exchange and Cheques. The said Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of dishonor of cheques. However, the Central Government has been receiving several representations from the public including trading community relating to pendency of cheque dishonor cases. This is because of delay tactics of unscrupulous drawers of dishon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon element in both these sections is that; in case the accused is acquitted then the complainant would be required to return the amount so obtained through the court orders, with Bank rate interest. However, there are certain striking differences between the provisions as contained in these two sections. Whereas Section 143-A of the Act gives power to the Trial Court to direct the accused to ' pay' an interim compensation which cannot be more than 20% of the ' cheque amount' , at the same time Section 148 of the Act empowers the Appellate Court to direct the accused/appellant to ' deposit' minimum of 20% of ' fine' or ' compensation' awarded by the Trial Court. Hence, whereas the Trial Court cannot award more than 20% of the cheque amount, the Appellate Court is ordained to award not less than 20% of the fine or compensation. Furthermore, under Section 143-A of the Act, the Trial Court is required to order the accused to pay the said amount as interim compensation directly to the complainant. Under Section 148 of the Act, the Appellate Court is required to direct the accused/appellant to deposit the said amount with the Court, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itendra Vishnu Thakur and others etc versus State of Maharashtra and other; AIR 1994 Supreme Court 2623, Maharaja Chintamani Saran Nath Chahdeo versus State of Bihar; 1994 (4)R.C.R.(Civil) 715 and another judgment of Hon ble Supreme Court rendered in Nani Gopal Mitra versus State of Bihar; AIR 1970 Supreme Court 1636. Explaining his argument further, learned counsel has further submitted that since the liability imposed upon the petitioner, by the newly introduced provision, is in the nature of legally enforceable liability, therefore, it is a new and substantive obligation as per the law and not merely a part of the procedure. Learned counsel has submitted that had the present provision been procedural in nature then the same may have been applied to the pending cases, however, since it affects the substantive rights of the accused/petitioners, therefore, it cannot be applied to the pending cases; by giving retrospectivity to this provision. Mr. Dinesh Arora, learned counsel who is appearing for the petitioners in the cases arising out of the appeals, has submitted that any law which creates a new responsibility upon the appellant during the appeal can also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sus State of Rajasthan; 2004 AIR SCC 2608 , Basheer @ N.P.Basheer versus State of Kerala;2004(1) R.C.R (Criminal)1008 . Learned counsel has further argued that the object and reasons of the Act as well as the parliamentary debates, which had taken place at the time of enacting these provisions, also shows that the provision is not procedural in nature. The debates and the objects and reasons; would show that the idea behind this amendment was not to streamline any procedure. Rather the idea is to grant relief to the complainant/holder of the cheque in due course; during the trial itself, at the cost of the accused, even before the latter is held guilty of the offence. Hence, application of this provision to pending appeals is introducing a kind of presumpting punishment in retrospectivity, which is prohibited by Article 20 of the Constitution of India. Mr. Manoj Pundir, learned counsel for another petitioner has relied upon the judgment of the Hon ble Supreme Court rendered in Anil Kumar Goel versus Kishan Chand Kaura;2008(1)R.C.R(Criminal)290 to submit that in case of another provision of the same Act, whereby the power was sought to be given to the Magistr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to arrange for the same. In such a situation, the accused would not be left with any alternative but to suffer in silence the consequences of coercive procedure of recovery of the amount as fine, as prescribed under Section 421 Cr.P.C. Hence, the provision being extremely substantive in nature, could not have been applied by the Courts below to the pending cases; so as to confer retrospectivity upon it. On the other hand, Mr. Rajesh Sethi , learned counsel, appearing for the complainant/respondent in revision petitions arising from the Orders passed in appeals, have submitted that, in the first instance, the provision introduced by Section 143-A and 148 of the Act are not substantive in nature. These provisions have been created only as steps in procedure to streamline the same, so as to cut the unnecessary delays in conclusion of the trials. This is so specifically stated as well, in the objects and reasons of the amendment. While interpreting such a provision, the Court should adopt a purposive interpretation, to give effect to the intention of the legislator, which in the present case is to curb the delay in trial and to discourage default in Negotiable Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it can, collaterally, has some effect on substantivity, cannot be precluded from application to the appeals; which are already pending. Citing an another example, learned counsel for the respondent has submitted that Section 100 of Civil Procedure Code was amended to provide that second appeal would lie only in those cases which involves substantial questions of law. This provision was held applicable even to the pending cases by the Hon ble Supreme Court, despite the fact that it had the effect of summary dismissal of the appeal in those cases where no such substantial question of law was involved. In such a situation, the appellant cannot claim that his right to file appeal has been adversely affected, therefore, such a provision should not be applied to the pending cases. Extending his argument further, learned counsel for the respondent has submitted that in case of a trial; a right can be said to be a substantive right only if it affects right to prosecute or to defend the charge. However, in the present case, the provision no where affects the right of the accused to defend himself. The provision, per se, does not prescribe for any disqualifying consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be construed as coming into operation immediately on the expiration of the day preceding its commencement. A bare perusal of this provision would make it clear that any Act of Parliament shall come into operation on the day on which it receives the assent of the President. Unless it is expressed to become operational on any other date and unless a contrary intention is expressed, the Act shall come into effect qua all cases on the day of its commencement. In the present case, the Act of Parliament has specified that it shall come into operation on the date specified in the notification. The notification has been issued by the Parliament on 02.08.2018. It is stated to have received the assent of the President on 02.08.2018 only. Hence, the same can be safely taken to be operational with effect from 02.08.2018. As stated above, the vires of the provision are not under challenge in these petitions, therefore, for the purpose of the present petitions, this Court has to assume that the Amendment Act, and the provisions contained therein, have validly come into operation on 02.08.2018. Having said so, the real dispute starts. Learned counsel for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision in question in accordance with its tenor. If the language is not clear then the court has to decide whether, in the light of the surrounding circumstances, retrospective effect should be given to it or not.(See: M/s Punjab Tin Supply Co., Chandigarh etc. etc. v. Central Government and Ors.,1984(1)RCR (Rent) 168). Clarifying further, the Supreme Court has held that all those laws which affect the substantive and vested rights of the parties have to be taken as substantive law, whereas any provision of law dealing with the form of the trial, mechanism of the trial or procedure thereof, has to be treated as procedural in nature. The relevant part of the judgment of the Hon ble Supreme Court in case of Thirumalai Chemicals Ltd. vs. Union of India and others; 2011(6) SCC 739 is as follows:- 14. Substantive law refers to body of rules that creates, defines and regulates rights and liabilities. Right conferred on a party to prefer an appeal against an order is a substantive right conferred by a statute which remains unaffected by subsequent changes in law, unless modified expressly or by necessary implication. Procedural law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure to be followed by adjudicatory a forum or the mechanism prescribed for enforcement of decision of such forum. Hence, a law which essentially deals with forums of adjudication, procedure of adjudication and the mechanism for enforcement of result of such an adjudication, would essentially be procedural in nature. All rights granted by procedural law would be only procedural rights. As a corollary to this, no procedural right can be either substantive or vested right. Coming to the facts of the present case, the provisions of Section 143-A and Section 148 of the Act reveals that these Sections of the Act start with a non-obstante clause against Code of Criminal Procedure. However, the Hon ble Supreme Court has already clarified in judgment rendered in Central Bank of India vs. State of Kerala and others ; 2010(8) RCR(Civil)3195 that non-obstante clause, used in provision of a law has to be given only a contextual interpretation and not to be taken as an absolute exclusion or over-riding of the law contained in provisions qua which the non-obstante clause has been used. In this regard, it is relevant to have a reference to the observation made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cr.P.C. Hence, all the provisions relating to punishment, execution thereof, fine and compensation and recovery thereof, as contained in the Cr.P.C, has to be read in conjunction and in harmony with Section 143-A and Section 148 of the Act. A bare perusal of Section 143-A of the Act shows that this section has given power to the Trial Court to order the drawer of the cheque/accused in the trial, to pay interim compensation to the complainant, where the accused has not pleaded guilty of the acquisition made against him. Still further, although a limit of ' 20% of cheque amount' has been imposed upon power of the Court for ordering interim compensation, however, it has also been provided that if it is not paid within 60 days from the order or within the time, extended by the Court, if any, then the interim compensation shall be recovered under Section 421 Cr.P.C, as if it were a ' fine' imposed upon the accused. Although this Section also provide return of the said amount, in case the accused is acquitted, and for adjustment of the said amount of interim compensation towards final compensation or fine; in case of his conviction, however, till any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. The same can also be recovered as amounts of arrears of land revenue from movable or immovable property or both, of the accused. Hence, application of this provision has a drastic effect upon the property rights of the accused, and makes him liable for sale of his properties for recovery of amounts, despite the fact that it is yet to be finally determined whether he is guilty of the offence, and as such liable to pay any compensation to the complainant or not. Accordingly, since the amended provision provides for enforcement of recovery of interim compensation by way of coercive procedure, it is nothing but an obligation imposed upon the accused. Section 3 of the Specific Relief Act has clarified the meaning of term obligation by defining that any duty enforceable under law is an obligation. As per General Clauses Act, this definition has to be read in all Central Acts unless defined otherwise in the relevant Act. Such an ' obligation' having consequences qua the property rights of the accused cannot; but be treated; as substantive provision effecting his substantive right by casting a substantive obligation upon him, to make the payment of money; and if not pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still another reason why the provision of Section 143- A of the Act cannot be applied to the pending cases. Section 53 of the Indian Penal Code(hereinafter referred to as IPC ) prescribes only six kinds of punishments, though for the purpose of offences under IPC, which are punishment of death, punishment for imprisonment for life, imprisonment for a term, which can be simple or rigorous, punishment of forfeiture of property and the punishment of fine. Therefore, under the provisions of IPC forfeiture of property is one of the punishment. Furthermore, there is no provision of imposing sentence of awarding of compensation against an accused and in favour of the complainant. Even if the compensation is awarded that is not the part of the sentence. Even under the Negotiable Instruments Act, Section 138 does not prescribe any sentence other than the imprisonment and the sentence of fine. Hence compensation is not to be awarded as a part of sentence. Although, the fine, provided to be imposed as sentence, ranges upto twice the amount of the cheque, which can be appropriated as compensation in favour of the complainant, however, there is no provision for independently awarding compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vested right to claim that he would file and prosecute appeal only in accordance with any particular provision. The Right to Appeal, being a statutory right, has to be availed only within the parameters provided by the said provision. Therefore, if any provision relating to dealing with the appeal by the Appellate Court is altered, the said provision has to be treated as a procedural provision only. Considering the provision of Section 148 of the Act, this Court finds substance in the argument of learned counsel for the petitioners that the said provision does not, in any way, affects the substantive right of the accused, to defend himself or to prosecute his appeal. The provision categorically provides that in case the accused/appellant is acquitted by the Appellate Court; then the amount awarded by the Appellate Court as interim compensation shall be returned to him; by the complainant, along-with interest. No other disqualification is to be inflicted upon the accused/applicant qua defense or prosecution of appeal by him. However, still the essential question to be considered is whether the provision authorizing the Appellate Court to Order the appellant to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompensation imposed by Trial Court, beyond that 20%, as ordered by the Appellate Court, is ipso facto, being stayed during the pendency of the appeal. Hence instead of prejudicing any substantial right of the appellant this provision is beneficial provision in favour of the accused. Still further there can be a situation where a Trial Court passes sentence of only fine or compensation up to twice the amount of the cheque, without any sentence of imprisonment. In that situation, the fine becomes recoverable immediately. However, Section 424 of Cr.P.C provides that the amount shall be payable in full within 30 days from the date of order of the Trial Court, or at the best in three installments, starting from within 30 days from the order of the Trial Court, and the remaining two installments being paid at the interval of 30 days each. Hence the payment of entire amount of fine or compensation has to be completed within 90 days. The provision of Section 424 Cr.P.C is reproduced below:- 424. Suspension of execution of sentence of imprisonment. ( 1) When an offender has been sentenced to fine only and to imprisonment in default of paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eyond a period of 90 days; or not to be paid even till conclusion of the appeal. In view of the above discussion, it is quite clear that the procedure of recovery of fine or compensation from a convict-appellant of pending appeal already existed in CR.P.C; before advent of the provision as contained in Section 148 of the Act. Hence, no new aspect of coercive recovery of fine or compensation from the appellant is being created through this amended provision. On the contrary, this provision provides more breathing space to the convict/appellant; as compared to the other procedures of recovery, as contemplated under Sections 421 and 424 of Cr.P.C, which is for more onerous in terms of time limit and the consequences. Since the provisions for recovery of fine or compensation from the appellant/convict already existed in the existing procedure relating to the recovery, therefore, the provision introduced vide Section 148 of the Act; which relates only to recovery of amount partly, as interim measure, has to be treated purely procedural only, which is otherwise also beneficial for the appellant as compared to the pre-existing provisions. Hence it has to be held that pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 148 of the Act. Accordingly all the petitions, wherein the order of the Trial Courts, directing the accused to deposit up to 20% of the cheque amount as interim compensation; are challenged, are allowed. Consequently, the Orders challenged in those petitions are set-aside. The petitions where the challenge is to the order of the Appellate Court, directing the appellant to deposit 20% or more of the amount of fine or compensation as awarded by the Trial Court, are dismissed. Consequently, the Orders impugned in these petitions are upheld. Lest anymore unnecessary litigation should arise under above- said provisions of Section 143-A and Section 148 of the Negotiable Instruments Act, it would be appropriate that the Trial Courts/Appellate Courts are made aware of the above-said interpretation of these two provisions. Accordingly, the Registrar General of this Court is directed to ensure that a copy of this judgment is sent through e-mail, forthwith, to all the judicial officers in the States of Punjab and Haryana and in U.T. Chandigarh, dealing with cases under the Negotiable Instruments Act, 1881. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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