Harsh Sehgal vs State And Another - 2022 Supreme(Del) 1038

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Del) 1038

IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Harsh Sehgal - Appellant
Versus
State & Anr. - Respondents
Criminal Miscellaneous Case No. 702, 703, 704, 731 of 2022, Criminal Miscellaneous Application No. 2998, 3000, 3002, 3074 of 2022
Decided On : 13-05-2022

Advocates appeared:
Vikas Pahwa, Advocate, Vikas Arora, Advocate, Radhika Arora, Advocate, Siddharth Singh, Advocate, Piyush Kumar, Advocate, Panna Lal Sharma, Advocate, Kanwal Chaudhary, Advocate, Akhil Gupta, Advocate, Dinesh Kumar, Advocate

Headnote:
CRIMINAL PROCEDURE CODE - Section 482 - Amendment of Negotiable Instruments Act, 1881 - Section 148 - Retrospective application - Applicability to pending appeals - Conditions for imposition of fine - Cancellation of bail - Legality.
Fact of the Case:

The petitioners, accused in a case under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), challenged the order of the Additional Sessions Judge (aSJ) directing them to deposit 20% of the fine/compensation amount as a condition for suspension of sentence. The aSJ had passed the order under Section 148 of the NI Act, which was introduced by an amendment in 2018. The petitioners contended that Section 148 was not applicable to appeals filed before the amendment and that the aSJ did not have the power to modify its earlier order suspending the sentence.
Finding of the Court:

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. The Court also held that the aSJ had the power to impose a fine under Section 148, but it could not impose a condition of vacation of the suspension of sentence. The Court found that the aSJ had erred in granting only one month's time to the petitioners to deposit the fine, as Section 148 provides for a minimum period of 60 days. The Court also found that the aSJ had exceeded its powers in imposing the condition of vacation of suspension of sentence, as there were no extraordinary or exceptional circumstances.
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? 2. Whether the aSJ had the power to modify its earlier order suspending the sentence? 3. Whether the aSJ erred in granting only one month's time to the petitioners to deposit the fine?
Ratio Decidendi: 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. This is because the purpose of the amendment was to provide relief to complainants in cases where the accused had obtained a stay of the sentence by filing an appeal. The amendment does not take away any vested right of the accused, as it only imposes a condition for the suspension of sentence. 2. The aSJ had the power to impose a fine under Section 148, but it could not impose a condition of vacation of the suspension of sentence. This is because Section 148 does not provide for any such consequence for non-payment of the fine. The aSJ also exceeded its powers in reviewing its earlier order suspending the sentence, as there were no extraordinary or exceptional circumstances. 3. The aSJ erred in granting only one month's time to the petitioners to deposit the fine, as Section 148 provides for a minimum period of 60 days. The aSJ should have granted the petitioners the full 60 days to deposit the fine.
Final Decision: The Court allowed the petition and set aside the order of the aSJ. The Court directed the aSJ to grant the petitioners 60 days to deposit the fine imposed under Section 148 of the NI Act.

JUDGMENT

Chandra Dhari Singh, J. - 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 contrar