Kaustubh Infra Space through Its Authorized Representative Cum Partner Ajay Kumar Singh Vs the State of Jharkhand

IN THE HIGH COURT OF JHARKHAND AT RANCHI

Cr. Rev. No. 1394 of 2022

Kaustubh Infra Space, through its authorized representative-cumpartner Ajay Kumar Singh, Aged about 49 years, S/o Raghubar Singh, R/o Quarter No. B- 595, Sector II, HEC Colony, PO & PS- Dhurwa, District Ranchi, Jharkhand. … … Petitioner

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Versus

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The State of Jharkhand

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ABS Eliza Life Sciences Pvt. Ltd.

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Bishwajit Singh, S/o Late Shiv Kumar Singh Both at 303, Pawanputra Apartment, Frazer Road, PO- GPO & PS Gandhi Maidan, District- Patna (Bihar).

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… … Opposite Parties

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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY --For the Petitioner : Mr. Shailesh Poddar, Advocate For the State : Mr. Shailesh Kumar Sinha, APP

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11 /01.03.2024 Learned counsel for the parties are present.

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2. This criminal revision petition has been filed for setting aside of the judgment dated 08.09.2022 passed in Criminal Appeal No. 37 of 2020 by learned Additional Judicial Commissioner VII- cum Spl. Judge, CBI- II (AHD), Ranchi whereby the criminal appeal filed by the petitioner has been dismissed.

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3. From the perusal of office note, it appears that undelivered registered cover upon opposite party nos. 2 and 3 has been received stating that the recipient has left the mentioned address and the wife has refused to receive the notice.

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4. Learned counsel for the opposite party- State is present.

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5. Heard the learned counsel for the petitioner and the learned counsel for the State on the merits of the case.

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6. Learned counsel for the petitioner has submitted that the petitioner is the complainant who had filed a petition under section 138 of Negotiable Instruments Act, 1881 relating to dishonour of cheque of Rs. 23 lakhs on 18.11.2017. The legal notice was issued on 15.12.2017 and despite service of notice, the cheque amount was not paid. Consequently, Complaint Case No. 315 of 2018 was filed. The learned counsel submits that the complaint case remained pending and it was ultimately decided on 29.01.2020.

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7. The accused was convicted and there was a direction to pay the compensation of Rs. 23,50,000/- in terms of Section 357 (3) of the Code of Criminal Procedure with a further default clause. The learned counsel submits that the case remained pending before the Court for almost two years, and therefore the compensation amount which was directed to be paid was inadequate. It is submitted that as per the provisions of law, the compensation amount which ought to have been paid was twice the cheque amount.

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8. The learned counsel for the petitioner has relied upon a judgment passed by the Hon’ble Supreme Court in the case of “R. Vijayan Vs. Baby and others” reported in (2012) 1 SCC 260 and has referred to paragraphs 18 to 20 of the said judgment to submit that the Hon’ble Supreme Court has held that in all the cases of conviction, the Courts should uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at the rate of 9% per annum as a reasonable quantum of loss) and direct payment of such amount as compensation. The learned counsel has submitted that if 9% interest is taken into consideration, it comes to Rs. 2,07,000/- per year and 2 years’ time was taken in deciding the case. The learned counsel for the petitioner has also submitted that learned trial Court has not cited reasons with regard to quantification of the compensation amount.

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9. The learned counsel for the petitioner further submits that arising out of the judgment passed by the learned Trial Court, an appeal was filed by both the parties. So far as the opposite party is concerned, their appeal was numbered as Criminal Appeal No. 42 of 2020, which was dismissed on 08.09.2022 and so far as the appeal of the present petitioner for enhancement of compensation is concerned, the same was numbered as Criminal Appeal No. 37 of 2020, which has also been dismissed on 08.09.2022. The learned counsel submits that the learned Appellate Court has refused to interfere by simply stating that the compensation amount of Rs. 50,000/- over and above Rs. 23 lakhs (being the cheque amount) could not be shown to be arbitrary. The learned counsel submits that in view of the aforesaid judgment passed by the Hon’ble Supreme Court, the compensation is inadequate and calls for interference.

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10. The learned counsel for the opposite party- State submits that the matter is between the petitioner and the complainant. The learned counsel for the State has also submitted that the impugned order has been rightly passed and does not call for any interference. He has also submitted that it has not been indicated as to at whose instance the matter remained pending for two years.

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11. After hearing the learned counsel for the parties and considering the facts and circumstances of this case, this Court finds that the complaint case was filed by the petitioner in the year 2018 against the opposite party no.2 (the company) and the opposite party no.3 ( the director of the company) and the inquiry was conducted by the Court on 24.01.2018 and consequently, process was issued against the accused.

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12. The gist of accusation was explained to the accused on 21.03.2018 and the statement of the accused was recorded under section 313 on 09.01.2019. Thereafter, the accused also adduced two witnesses, and ultimately the learned trial Court passed the judgment on 29.01.2020, holding the opposite party no.3 (the director of the opposite party no. 2) guilty of the offence and directed the opposite party no. 3 to pay the compensation of Rs. 23,50,000/- for dishonour of cheque of Rs. 23,00,000/- and sentenced the opposite party no.3 to undergo one-year simple imprisonment for the offence.

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13. The judgment passed by the learned Trial Court reveals that the case of the complainant was that the accused had issued the cheque in discharge of legally enforceable debt arising out of the business transaction; the opposite party no.3 (the director of opposite party no. 2 - company) had issued a cheque dated 15.11.2017 for an amount of Rs.23 lakhs, which was dishonored. It had come in the crossexamination of the complainant that the accused company was given money in the financial year 2016-17 by the complainant. Although the company and its director were accused in the case but the learned Trial Court convicted only the director of the co-accused company and directed the director of the company to make payment of compensation of Rs.23,50,000/- against the cheque amount of Rs. 23,00,000/- and sentenced him with one year simple imprisonment.

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14. The appeal was filed by both the parties, and the appeal of the petitioner was numbered as Criminal Appeal No. 37 of 2020. The Appellate Court recorded the finding in connection with the enhancement of compensation as follows:-

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“So far prayer for enhancement of compensation is concern which is maintainable in this appeal, I have carefully scrutinized the impugned judgment and find that the cheque is related dated 15.11.2017 and after two years and two months the judgment has been pronounced on 29.01.2020. In the judgment the learned Judicial Magistrate 1^st Class, Ranchi imposed a compensation of Rs. 23,50,000/- i.e. Rs. 50,000/- more than cheque amount. The appellant by his argument failed to show that the above compensation is arbitrary because Rs. 50,000/- more than cheque amount has been given as a compensation. Hence under the above circumstances, I am of the opinion that it is not just to interfere in the compensation passed by the learned trial Court. Accordingly, this Criminal Appeal No. 37/2020 which is filed U/s 372 of the Cr.P.C. to enhance the punishment and compensation of the convict is hereby dismissed. Let a copy of this order be sent to the concern court.”

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15. The petitioner i.e. the complainant of the case is only aggrieved by the quantum of compensation and has relied upon the judgement passed by the Hon’ble Supreme Court reported in (2012) 1 SCC 260 (Supra) .

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16. In the judgment passed by the Hon’ble Supreme Court reported in (2012) 1 SCC 260 (Supra), the Hon’ble Supreme Court has considered the provisions relating to compensation and has recorded that in those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the claimant as invariably by the time the criminal case is decided, the limitation for filing civil cases would have expired. The Hon’ble Supreme Court was also of the view that the provision of Chapter XVII of the Negotiable Instruments Act, 1881 strongly leans towards the grant of reimbursement of the loss by way of compensation, and therefore the Court should, unless there are special circumstances, in all the cases of conviction uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at the rate of 9% per annum as a reasonable quantum of loss) and direct payment of such amount as compensation. It has also been observed by the Hon’ble Supreme Court that direction to pay compensation by way of restitution in regard to loss on account of dishonour of cheque should be practical

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and realistic, which would mean not only the payment of the cheque amount but interest thereon at reasonable rate. It has been held that uniformity and consistency in deciding similar cases by different courts not only increase the credibility of cheque as a negotiable instrument, but also the credibility of the courts of justice.

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The Hon’ble Supreme Court was also of the view that section 138 of the Negotiable Instruments Act, 1881 cannot be treated as a civil suit for recovery of cheque amount with interest and compensation under Section 357 (1)(b) is not intended to be an elaborate exercise taking note of interest etc., and the observations are necessitated due to the need to have uniformity and consistency in decision making and in absence of such uniformity, there would be uncertainty in the mind of the litigants about the functioning of the court, and the citizens will not be able to arrange or regulate their affairs in a proper manner as they will not know whether they should simultaneously file a civil suit or not. The Hon’ble Supreme Court also observed that the case under section 138 of the Negotiable Instruments Act, 1881 is to be concluded within six months from the date of filing the complaint and such cases seldom reach finality before three or four years let alone six months. These cases give rise to complications where civil suits have not been filed within three years on account of pendency of criminal case. It has been further observed that it is not the duty of the Criminal Court to ensure that successful complainants get the cheque amount also, it is their duty to have uniformity and consistency with other courts dealing with similar cases.

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17. Paragraphs 18 to 20 of the aforesaid judgment in (2012) 1 SCC

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260 (Supra) are quoted as under:

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“18. Having reached that stage, if some Magistrates go by the traditional view that the criminal proceedings are for imposing punishment on the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a “victim” in the real sense, but is a well-to-do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount

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as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.

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19. We are conscious of the fact that proceedings under Section 138 of the Act cannot be treated as civil suits for recovery of the cheque amount with interest. We are also conscious of the fact that compensation awarded under Section 357(1)(b) is not intended to be an elaborate exercise taking note of interest, etc. Our observations are necessitated due to the need to have uniformity and consistency in decision making. In same type of cheque dishonour cases, after convicting the accused, if some courts grant compensation and if some other courts do not grant compensation, the inconsistency, though perfectly acceptable in the eye of the law, will give rise to certain amount of uncertainty in the minds of litigants about the functioning of courts. Citizens will not be able to arrange or regulate their affairs in a proper manner as they will not know whether they should simultaneously file a civil suit or not. The problem is aggravated having regard to the fact that in spite of Section 143(3) of the Act requiring the complaints in regard to cheque dishonour cases under Section 138 of the Act to be concluded within six months from the date of the filing of the complaint, such cases seldom reach finality before three or four years let alone six months. These cases give rise to complications where civil suits have not been filed within three years on account of the pendency of the criminal cases. While it is not the duty of criminal courts to ensure that successful complainants get the cheque amount also, it is their duty to have uniformity and consistency with other courts dealing with similar cases.

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20. One other solution is a further amendment to the provisions of Chapter XVII so that in all cases where there is a conviction, there should be a consequential levy of fine of an amount sufficient to cover the cheque amount and interest thereon at a fixed rate of 9% per annum interest, followed by award of such sum as compensation from the fine amount. This would lead to uniformity in decisions, avoid multiplicity of proceedings (one for enforcing civil liability and another for enforcing criminal liability) and achieve the object of Chapter XVII of the Act, which is to increase the credibility of the instrument. This is however a matter for the Law Commission of India to consider.”

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18. This Court finds that in the present case the cheque is dated 15.11.2017 and the case has been decided within three years of the issuance of cheque. It is not a case where the criminal case remained pending for years together and the remedy of the petitioner to avail further amount by way of civil suit has become barred by law. This Court also finds that the petitioner has not given any detail in connection with the reason for adjournments of the case whether it was taken at the instance of the petitioner or at the instance of the accused which could also be a point for consideration while exercising the discretion in the matter of grant of compensation. Admittedly, the proceeding is not for recovery of money with interest as is applicable under the civil suit. This Court is of the view that even if the petitioner

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was aggrieved by the quantum of compensation, the remedy to file the civil suit was still available to the petitioner upon the decision of the case to sue the accused persons.

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19. This Court also finds that there were two accused before the learned Trial Court i.e the company (opposite party no.2 ) and the director of the company (opposite party no.3) who had signed the cheque but the Trial Court had convicted only the director of the company (opposite party no.3) and directed the director of the company (opposite party no.3) only to pay compensation although the order passed by the learned Trial Court reveals, inter alia , that the business transaction was with the company (opposite party no.2).

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20. In the aforesaid circumstances, this court is of the considered view that the compensation of Rs. 23,50,000/- against cheque amount of Rs. 23,00,000/- is adequate compensation and the petitioner has failed to make out a case for any higher compensation from the director of the company (opposite party no.3) calling for any interference in revisional jurisdiction of this case.

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21. This Court further finds that before the learned Trial Court, the petitioner did not advance any argument with regard to the quantum of compensation and before the Appellate Court, the petitioner failed to show that the compensation was arbitrary. The Appellate Court was of the view that it was not just to interfere with the amount of compensation.

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22. As a cumulative effect of the aforesaid findings, this criminal revision petition is hereby dismissed.

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23. Pending interlocutory application, if any, is closed.

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24. Interim order, if any, stands vacated.

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(Anubha Rawat Choudhary, J.)

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Pankaj

Kaustubh Infra Space through Its Authorized Representative Cum Partner Ajay Kumar Singh v. the State of Jharkhand

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Kaustubh Infra Space through Its Authorized Representative Cum Partner Ajay Kumar Singh v. the State of Jharkhand

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