The main legal point established in the judgment is that the amount recovered under the SARFAESI Act can be adjusted towards the compensation ordered by the Court, and default in payment of compensation or fine would not automatically result in the cancellation of bail.

JUDGMENT

Anil Kshetarpal, J. - Courts are required to rediscover itself when they face unprecedented challenges particularly in absence of clear statutory mandate. These cases also throw such challenge. Let me take an attempt to do justice.

2. By this order, CRM-M-29187 and CRM-M-29188 of 2019 shall stand disposed of. Counsel for the parties are also agreed that the issues involved for decision are common in both the petitions.

3. Following questions needs determination:-

(1) "Whether a convict under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the NI Act') while in appeal against the conviction is entitled to pray for adjustment of the amount already recovered under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act') towards directions of the appellate court to deposit certain percentage of the compensation or fine under Section 148 of the NI Act or not particularly when it is not disputed that amount involved proceedings under the SARFAESI Act and the NI Act 1881 are arising out of same transaction?

(2) Whether on non-deposit of the amount as directed under Section 148 of the Negotiable Instrument Act, 1881, bail granted to the appellant is liable to be automatically/consequently cancelled? Some facts are required to be noticed.

4. Petitioners herein (2 in number, one individual and second incorporate company ) had allegedly taken two credit facilities from Capital First Limited. Since, it is alleged that petitioners did not adhere to the financial discipline, defaulted in re-payment of monthly installments, therefore, petitioners issued cheques in favour of M/s Capital First Limited towards re-payment of the entire credit facility. Cheques were dishonored by the bank when presented for encashment resulting in filing of two complaints under Section 138 of the NI Act. Subsequently, Kotak Mahindra Bank was substituted being assignee. Along with the proceedings under Section 138 of the NI Act proceedings under the SARFAESI Act were also initiated.

5. Learned Judicial Magistrate convicted the petitioners of offence under Section 138 of the NI Act and sentenced to imprisonment for a period of two years in 2 separate cases and they were also directed to pay compensation equivalent to the cheque amount to the complainant.

6. In the proceedings under SARFAESI Act, it is undisputed that in the meanwhile two mortgaged properties have been sold through different auctions and respondent bank has already recovered Rs.1.73 crores.

7. Aggrieved by the conviction and sentence in proceedings under section 138 of the NI Act, 2 separate appeals were filed, concession of bail was granted by the first appellate Court. Simultaneously, petitioners-convicts were directed to deposit 20% of the compensation amount under Section 148(2) of the NI Act as introduced by amendment Act of 2018.

8. Petitioners filed applications in both the cases for adjustment of the amount directed to be paid by the appellate Court as interim compensation, noticed above, against the amount recovered under SARFAESI Act which have been dismissed by the Court by passing separate similarly worded orders on the ground that the appellants have failed to point out any provision of law permitting such adjustment/arrangement. It may be noted here that while granting bail vide order dated 02.04.2019, petitioners-convicts were directed to deposit 20% of the compensation awarded by the trial court which in both the appeals comes to Rs.60,00,000/-. It is undisputed that after 02.04.2019 when petitioners were directed to deposit 20% of the amount of compensation, respondent-bank has recovered Rs. 1,21,00,000/- by sale of showroom on 16.04.2019 besides Rs.52,00,000/- recovered earlier thereto. This Court has heard learned counsels for the parties at length and with their able assistance gone through the paper books.

9. In the considered view of this court, l