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2023 Supreme(P&H) 2819

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ASHOK KUMAR VERMA, J.
M/s. Umam Automobiles & Anr. – Petitioners
Versus
M/s. Indo Farm Equipment Ltd. – Respondents
CRM-M NO. 2878 of 2023
Decided On : 30-01-2023

Advocates Appeared:
Mr. Munish Bhardwaj, Advocate; For the Petitioners

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 143-A, and 148 - Criminal Procedure Code, 1973 - Section 482 - Quashing of order - Petition to quash order directing deposit of 20% compensation during appeal - The court held appellant must deposit such sum as per Section 148, allowing for interim compensation previously granted and highlighting judicial precedent. (Paras 1-10)

(B) Appeal - The courts have affirmed that the procedure for recovery of compensation during appeal exists and does not contravene any statutory provisions. - Judicial rulings establish the authority of appellate courts to impose such terms. (Paras 6, 9)

Facts of the case:
The petitioners issued a cheque for Rs.1,40,00,000/- which was dishonoured, prompting a complaint for cheque dishonour. The trial court found the petitioners guilty and directed substantial compensation. The appellate court required the deposit of 20% of the compensation amount.

Findings of Court:
The petition was dismissed, affirming the need for the deposit under the authority of the N.I. Act.

Issues: Main issues pertained to the legitimacy of the demand for deposit of compensation during the appeal process and interpretation of the provisions of the N.I. Act.

Ratio Decidendi: The court reasoned that the appellate court has the discretion to require a deposit of compensation, ensuring fairness while addressing filed appeals.

Result: Petition dismissed.

Table of Content
1. overview of the case and initial facts. (Para 1 , 2 , 3 , 4 , 5)
2. claim of illegality in the impugned order. (Para 6)
3. examination of relevant statutory provisions. (Para 7 , 8)
4. court's rationale based on precedents. (Para 9)
5. final decision to dismiss the petition. (Para 10)

JUDGMENT

Ashok Kumar Verma, J. (Oral)

The petitioners have filed the present petition under Section 482 of the Code of Criminal Procedure, 1973 (for short 'the Cr.P.C.') for quashing of impugned order dated 25.11.2022 (Annexures P-6) passed by learned Additional Sessions Judge, Chandigarh, in Criminal Appeal No.317/2022 titled as 'M/s Umam Automobiles and another v. M/s Indo Farm Equipment Ltd.' whereby while suspending the sentence of the petitioner No.2, he was directed to deposit 20% of the compensation amount awarded by the trial Court within a period of 60 days.

2. Brief facts of the case are that petitioner No.1 is a partnership firm having petitioner No.2 as its partner. In order to discharge their legal liability, petitioner No.2 issued a cheque bearing No.899854 dated 01.11.2009 amounting to Rs.1,40,00,000/- in favour of the respondent and when the said cheque was presented by the respondent, the same were dishonoured with remarks 'payment stopped by the drawer' vide memo dated 04.12.2009. Thereafter, the respondent issued a legal notice dated 30.12.2009 to the petitioners but despite that the petitioners have failed to make the payment. Hence, respondent filed a complaint under section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I. Act') against the petitioners.

3. Vide judgment of conviction and order of sentence dated 28.10.2022, petitioner No.2 was held guilty for commission of offence punishable under section 138 of the N.I. Act and sentenced to undergo rigorous imprisonment for a period of 02 year and to pay a compensation of Rs.1,40,00,000/- to the respondent/complainant in terms of Section 357(3) of the Cr.P.C. within 02 months and in default of payment of compensation to further undergo simple imprisonment for 02 months.

4. Being aggrieved against the aforesaid judgment of conviction and order of sentence, the petitioners have preferred an appeal along with the application under Section 389 Cr.P.C. for suspension of sentence during the pendency of the appeal. The application under Section 389 of the Cr.P.C. filed by the petitioners was allowed vide impugned order dated 25.11.2022 passed by learned Additional Sessions Judge, Faridabad and petitioner No.2 was directed to deposit 20% of total compensation amount awarded by the trial Court within 60 days.

5. Aggrieved by the said order, the petitioner has filed the present petition.

6. Learned counsel for the petitioners has submitted that the impugned order dated 25.11.2022 is illegal. The petitioners have been falsely implicated in the present case. There is no legally enforceable debt against the petitioners and cheque in question was issued as security which has handed over to the employee of the respondent-company as a condition for grant of distributorship. A perusal of provision 148 of the N.I. Act clearly shows that learned Appellate Court may order the appellant to deposit such amount which shall not be less then 20% of the fine or compensation. The words used is 'may' which means that in the facts and circumstances of the case, when the appellant has good prima facie case on merit the learned Appellate Court should not direct for the payment of 20% of the amount of fine or compensation. Petitioner No.2 will suffer irreparable loss if the impugned order is not set aside. Therefore, the impugned order may be set aside.

7. I have heard learned counsel for the petitioner and perused the paper-book.

8. For ready reference, Section 148 and 143-A of the N.I. Act are reproduced here-in-below:-

    "148. Power of Appellate Court to order payment pending appeal against conviction.-

    (1) Notwithstanding anything contained in the Code of Criminal Procedu

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