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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Harsh Sehgal – Petitioner
Versus
State & Anr. – Respondents
Crl.M.C. 702 of 2022 & Crl.M.A.2998 of 2022 & Crl.M.C. 703 of 2022 & Crl.M.A. & Crl.M.C. 704 of 2022 & Crl.M.A.3002 of 2022 & Crl.M.C. 731 of 2022 & Crl.M.A. 3074 of 2022
Decided On : 13-05-2022
NI ACT - SECTION 148 - APPLICABILITY - RETROSPECTIVE - APPEAL - SUSPENSION OF SENTENCE - CONDITION - CANCELLATION - REVIEW OF ORDER - LEGALITY - SECTION 362 CRPC - SECTION 143A NI ACT - APPLICABILITY - PROSPECTIVE - DISTINCTION - SECTION 421 CRPC - RECOVERY OF FINE - SECTION 357 CRPC - RECOVERY OF COMPENSATION - SECTION 482 CRPC - INHERENT POWERS OF HIGH COURT - SCOPE - ILLEGALITY - JUDICIAL REVIEW.
Fact of the Case:
Petitioners challenged the order passed by the Additional Sessions Judge (ASJ) directing them to deposit 20% of the fine/compensation amount as per Section 148 of the Negotiable Instruments Act, 1881 (NI Act) in favor of the complainant, failing which the condition of suspension of sentence dated 5th April, 2018 shall stand vacated. The petitioners contended that Section 148 of the NI Act is not retrospective and hence not applicable to appeals filed prior to the amendment. They also argued that the ASJ did not have the power to modify its order dated 5th April, 2018 while passing the impugned order dated 5th February, 2022, wherein it directed appellant/petitioners to deposit 20% of the fine/compensation amount to the complainant in default of which the suspension of sentence would stand vacated.
Finding of the Court:
1. Section 148 of the NI Act is retrospective in nature and applies to appeals arising out of complaint cases filed prior to the amendment of 2018. 2. The ASJ had the power to impose a fine in accordance with Section 148 of the NI Act for an appeal arising out of a complaint case filed before the amendment, but it did not have the power to go beyond the mandate of the provision. 3. The ASJ's order imposing a condition of vacation of suspension of sentence amounted to a review of its own order, which is impermissible by law under Section 362 of the Code of Criminal Procedure (CrPC). 4. Section 143A of the NI Act is prospective in nature and applies only to cases where the offence under Section 138 of the NI Act was committed after the introduction of Section 143A.
Issues: 1. Whether Section 148 of the NI Act is retrospective in nature and applies to appeals arising out of complaint cases filed prior to the amendment of 2018? 2. Whether the ASJ had the power to modify its order dated 5th April, 2018 while passing the impugned order dated 5th February, 2022, wherein it directed appellant/petitioners to deposit 20% of the fine/compensation amount to the complainant in default of which the suspension of sentence would stand vacated? 3. Whether Section 143A of the NI Act is retrospective or prospective in nature?
Ratio Decidendi: 1. The court held that Section 148 of the NI Act is retrospective in nature and applies to appeals arising out of complaint cases filed prior to the amendment of 2018. The court relied on the judgments of the Supreme Court in Surender Singh Deswal @ Col S.S. Deswal & Ors vs. Virender Gandhi & Anr, (2019) 11 SCC 341, and G.J. Raja vs. Tejraj Sharma, (2019) 19 SCC 469, to arrive at this conclusion. 2. The court held that the ASJ did not have the power to modify its order dated 5th April, 2018 while passing the impugned order dated 5th February, 2022, wherein it directed appellant/petitioners to deposit 20% of the fine/compensation amount to the complainant in default of which the suspension of sentence would stand vacated. The court held that the ASJ's order amounted to a review of its own order, which is impermissible by law under Section 362 of the CrPC. 3. The court held that Section 143A of the NI Act is prospective in nature and applies only to cases where the offence under Section 138 of the NI Act was committed after the introduction of Section 143A. The court relied on the judgment of the Supreme Court in G.J. Raja vs. Tejraj Sharma, (2019) 19 SCC 469, to arrive at this conclusion.
Final Decision: The court allowed the petition and set aside the order passed by the ASJ directing the petitioners to deposit 20% of the fine/compensation amount as per Section 148 of the NI Act in favor of the complainant.
JUDGMENT :
Chandra Dhari Singh, J.
1. The instant batch of petitions has been filed on behalf of the petitioners under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter “Cr.P.C.”), seeking setting aside of order dated 5th February, 2022 passed by learned Additional Sessions Judge, Saket Courts, Delhi (hereinafter “ASJ”).
BRIEF BACKGROUND
2. As per the contents of the complaint, the brief facts of the case leading to the instant matter are that the complainant/respondent No. 2, Galaxy Datamatics Pvt. Ltd., averred that the accused No. 1, M/S Takshila Retail Pvt. Ltd., earlier known as M/s Blues Clothing Pvt. Ltd., accused No. 2, Dinesh Sehgal and accused No. 3, Harsh Sehgal, approached the respondent No. 2 for a short-term loan of Rs. 5 Crores for meeting short fall in cash flow and for immediate project requirements for implementation of various contracts.
3. A short-term loan agreement dated 9th June, 2011 was entered into by the parties and respondent No. 2 advanced the loan of Rs. 5 Crores to the accused for a period of three months at interest of 24% per annum. It was stated that the parties also agreed for execution of an irrevocable and unconditional personal guarantee of the accused No. 2 and 3, jointly and severally. It was further agreed that the accused were to pay a penal interest of 3% per month in case of default of repayment.
4. For repayment of the said loan the accused issued a cheque for the amount of Rs. 5 Crores bearing No. 017257 dated 10th September, 2011 drawn on Union Bank of India and when presented the cheque was returned dishonoured with the remarks “Insufficient Funds” vide memo dated 29th December, 2011. Statutory Notice dated 2nd January, 2012 was sent by respondent No. 2 to the accused and a complaint case under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter “NI Act”) was filed by respondent No. 2 against the accused thereafter.
5. Vide order dated 29th March 2012, the accused were summoned by the learned Metropolitan Magistrate and the accused claimed trial pleading not guilty. The Metropolitan Magistrate, after apprising itself of the facts and material on record, passed the judgment dated 27th February, 2018 and order on sentence dated 8th March, 2018, sentencing the accused No. 2 and accused No. 3, petitioners herein, to undergo simple imprisonment for one year alongwith fine of Rs. 7.5 Crores to be paid jointly and severally by all the convict persons including the accused No. 1, Company, petitioner herein, as compensation to the complainant and in default of which simple imprisonment for three months. The accused also filed an application under Section 389 of the Cr.P.C. for suspension of sentence for the purpose of filing an appeal against the conviction order.
6. The accused, thereafter, approached the Court of learned Additional Sessions Judge against the judgment and order on sentence. The learned ASJ while entertaining the appeal in C.A. 178/2018, C.A. 177/2018, C.A. 176/2018 and C.A. 180/2018, passed the order dated 5th April, 2018, suspending the order of sentence passed by the learned Trial Court for the period of pendency of the appeal. During the pendency of the appeal, an application was filed by respondent No. 2 under Section 148 of the NI Act, which was strongly opposed on behalf of the accused for not being maintainable. Vide order dated 5th February, 2022, the learned ASJ directed the accused to deposit 20% of the fine/compensation amount to be deposited in the form of FDR in the favour of the complainant failing which the condition of suspension of sentence dated 5th April, 2018 would stand vacated.
7. The petitioners, accused M/s Takshila Retail Pvt. Ltd., Dinesh Sehgal and Harsh Sehgal, are now assailing the order dated 5th February, 2022 passed by the learned ASJ.
SUBMISSIONS ON BEHALF OF THE PARTIES
8. Mr. Vikas Pahwa, learned senior counsel appearing on behalf of the petitioners submitted that the impugned order dated 5th February, 2022 is contrary
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