Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(SC) 1119

SUPREME COURT OF INDIA
C.T. RAVIKUMAR, SANJAY KAROL, JJ.
Bijay Agarwal – Appellant
Versus
M/s Medilines – Respondent
Criminal Appeal No. 4301 of 2024 [Special Leave Petition (Crl.) No. 2696 of 2024], Criminal Appeal No. 4302 of 2024 [Special Leave Petition (Crl.) No. 2695 of 2024]
Decided On : 21-10-2024

Advocates appeared:
For the Petitioner(s): Mr. Siddharth Aggarwal, Sr. Adv. Mr. Anjan Datta, Adv. Mr. Sumon Pathak, Adv. Ms. Ishita Srivastava, Adv. Ms. Arshiya Ghose, Adv. Mr. Ashish Raghvuvanshi, Adv. Mr. Vishal Arun Mishra, AOR
For the Respondent(s): Mr. Gautam S. Bharadwaj, Adv. Mr. Ashwin Kumar D.s., Adv. Mr. Ishan Roy Chowdhury, Adv. Ms. Surbhi Mehta, AOR

IMPORTANT POINT
Dishonour of cheque – As in case of position qua Section 143A, NI Act, merely because an officer of a company concerned is authorised signatory of cheque concerned by itself will not make such an officer ‘drawer of the cheque’ under Section 148, NI Act, so as to empower Appellate Court, in an appeal against conviction for offence under Section 138, NI Act, to direct to deposit compensation of any sum under Section 148(1) of NI Act.

Headnote:
Negotiable Instruments Act, 1881 – Sections 143-A and 148 – Criminal Procedure Code, 1973 – Section 389 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 430] – Dishonour of cheque – Conviction – Suspension of sentence – Question whether any particular officer of company concerned can be made to pay interim compensation or deposit additional compensation under relevant provisions would depend upon question whether he is only a signatory of cheque or whether he is drawer of cheque – As in case of position qua Section 143A, NI Act, merely because an officer of a company concerned is authorised signatory of cheque concerned by itself will not make such an officer ‘drawer of the cheque’ under Section 148, NI Act, so as to empower Appellate Court, in an appeal against conviction for offence under Section 138, NI Act, to direct to deposit compensation of any sum under Section 148(1) of NI Act – Appellate Court in an appeal against conviction under Section 138, NI Act, could not place a condition to deposit an amount invoking power under Section 148(1), NI Act, mechanically without considering whether case falls within exceptional circumstances – Impugned common order passed by High Court set aside and orders suspending sentence of appellant in both cases restored. (Paras 15, 16, 17 and 18)
Facts of the case:
Question of seminal importance arises for consideration viz. “whether signatory of a cheque authorized by Company is a drawer and whether such a signatory could be directed to deposit any sum out of fine or compensation awarded by trial Court under Section 148 of Negotiable Instruments Act, 1881 as a condition for suspending sentence in an appeal filed against his conviction under Section 138 of NI Act?
Findings of Court:
High Court has failed to consider these crucial aspects in light of dictum laid down by this Court while considering application for suspension of sentence for conviction under Section 138 of NI Act in pending appeal.
Result : Appeals allowed.

JUDGMENT :

C.T. RAVIKUMAR, J.

Leave granted.

On the consent of the parties, the matter was finally heard.

1. The captioned appeals by a special leave are directed against the impugned common order dated 09.01.2024 passed by the High Court of Karnataka at Bengaluru in Criminal Petition Nos. 13095 of 2023 and 13153 of 2023 respectively.

2. Heard the learned senior counsel appearing for the appellant and the learned counsel appearing for the respondent.

3. In view of the factual background obtained in these cases, a question of seminal importance arises for consideration viz. “whether the signatory of a cheque authorized by the Company is a drawer and whether such a signatory could be directed to deposit any sum out of the fine or compensation awarded by the trial Court under Section 148 of the Negotiable Instruments Act, 1881 (for short ‘NI Act’)” as a condition for suspending the sentence in an appeal filed against his conviction under Section 138 of the NI Act?

4. The contention of the appellant is that he is only an authorized signatory of the company M/s. Gee Pee Infotech Private Limited, which was held liable to adequately compensate the complainant company by the trial Court. The status of the appellant authorised signatory of the aforesaid company is undisputed rather, it is indisputable as it is the very case of the respondent complainant. Before the trial Court the said company was the first accused and the appellant herein was the second accused. In unambiguous terms, the respondent-complainant described the appellant Sri. Bijay Agarwal as the authorized signatory/ Director of M/s. Gee Pee Infotech Pvt. Ltd.

5. Bearing in mind the said indisputable and undisputed fact, we will briefly refer to the other relevant facts of the case. The complaint being C.C. No. 13938 of 2013 was filed by the respondent company against M/s. Gee Pee Infotech Private Ltd. and appellant, under Section 138 of the NI Act. The crux of the complaint was as under:

The Accused No. 1 is a Company incorporated under provisions of Companies Act 1956. The second accused is an authorised signatory/Director of the first accused company and he is incharge and responsible for the day today administrative affairs and functioning of the accused No. 1 Company. The accused by representing that they are the Pan Indian circle licence holder for distribution of Electronic Pin Recharge BSNL, induced the complainant to pay advance amount of Rs. 1,00,00,000/- and to become the Master Distributor for BS recharge pin for Karnataka State and accordingly entered in agreement with the complainant on 01/10/2011. By virtue of said Agreement, the accused appointed the complainant Master Distributor for BSNL E-recharge pin for Karnataka and collected the advance payment while undertaking liquidate/transfer BSNL E-recharge pin load to the complainant as to enable them to distribute through their constituents of the State of Karnataka. After entering into the Agreement accused supplied certain BSNL E-recharge pin to the complainant. However, to their utter shock, surprise and dismay, it came to the knowledge of the complainant through their constituents that 99% of the BSNL E-recharge pin supplied by the accused are fake and the talk time under the said BSNL E-recharge load supplied to them could not be uploaded to the Mobile Numbers of the customers.

6. It was the further case that on being told that appropriate action would be initiated they executed a Memorandum of Understanding on 10.04.2012 and assured return of the amount advanced and issued five post-dated cheques. The cheque presented was dishonoured and thereupon the complainant caused legal notice. Pursuant to the same, the accused issued two fresh post-dated cheques each for a sum of Rs. 25 lakhs in lieu of the old cheques. Later, cheque bearing No. 955437 dated 24.04.2013 for a sum of Rs. 25 lakhs was presented, but dishonoured and returned with the endorsement “payment stopped by the drawer”. The complaint was, thereupon,