TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1248
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..... Vikram Singh For The Respondent : Mr. Naveen Sharma, Advocate ORDER Rajbir Sehrawat, J.(Oral) This Order shall dispose of a bunch of 14 petitions, challenging the Orders passed by the Trial Courts in the trials under Section 138 of the Negotiable Instruments Act 1881(hereinafter referred to as'the Act'), whereby the Trial Courts have ordered the accused/petitioners to pay 20% or less of the cheque amount to the complainant under Section 143-A of the Act, as well as the petitions challenging the Orders passed by the Appellate Courts directing the convicts/appellants/petitioners herein to deposit 20% or more of amount of fine or compensation awarded by the Trial Court, during the pendency of the appeal, by exercising powers under Section 148 of the Act. CRM-M-13039-2019,CRM-M-13892-2019,CRM-M-14462- 2019 CRR-9872-2018 are the petitions wherein the Orders passed by the Trial Court under Section 143-A of the Act are under challenge and the CRM-M-49024-2018, CRM-M-49216-2018, CRM-M-49054-2018, CRMM- 49055-2018, CRM-M-49182-2018, CRM-M-12625-2019, CRM-M- 15297-2019, CRM-M-61716-2018, CRR-721-2019, CRR-746-2019 are the petitions where in the Orders passed by the Appellate Court ....
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....der the drawer of the cheque to pay interim compensation to the complainant--- * (a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and * (b) in any other case, upon framing of charge. (2) The interim compensation under sub-section(1) shall not exceed twenty per cent of the amount of the cheque. (3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque. (4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial years, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant. (5) The interim compensation payable under this section may be recovered as if it were a fine under section ....
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....romissory Notes, Bill of Exchange and Cheques. The said Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of dishonor of cheques. However, the Central Government has been receiving several representations from the public including trading community relating to pendency of cheque dishonor cases. This is because of delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings. As a result of this, injustice is caused to the payee of a dishonoured cheque who has to spend considerable time and resources in court proceedings to realize the value of the cheque. Such delays compromise the sanctity of cheque transactions. 2. It is proposed to amend the said Act with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to contin....
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....f the Act, the Trial Court is required to order the accused to pay the said amount as interim compensation directly to the complainant. Under Section 148 of the Act, the Appellate Court is required to direct the accused/appellant to 'deposit' the said amount with the Court, which the court may subsequently order disbursal to the complainant/holder of the cheque in due course. As per the provision of Section 148 of the Act, the amount ordered by the Appellate Court shall be in addition to any interim compensation already paid by the accused under the order of the Trial Court. Still further, difference between these two provisions is that under Section 143-A of the Act, the amount of interim compensation awarded by the Trial Court is prescribed to be recovered under Section 421 of Cr.P.C, if not paid within specified time, whereas there is no such corresponding provision in Section 148 of the Act. Section 148 of the Act does not prescribe any mode of recovery of amount of interim compensation awarded by Appellate Court. Further, a perusal of the statement of object and reasons for introducing these provisions also shows that the provisions are being added with a view to address the....
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..... Dinesh Arora, learned counsel who is appearing for the petitioners in the cases arising out of the appeals, has submitted that any law which creates a new responsibility upon the appellant during the appeal can also not be applied retrospectively. Hence the provision contained in newly added Section 148 of the Act cannot be applied to the appeals which were pending on the date of enforcement of the amendment, or to the appeals filed in those cases where the trials were pending on the date of enforcement of the amended provision. To substantiate that this provision casts a new substantive obligation upon appellant, the counsel has submitted that although at the conclusion of trial, the Trial Court can award a compensation in favour of the holder of the cheque in due course, however, since appeal is in continuation of the trial, therefore, fine or the compensation awarded by the Trial Court cannot be taken as final. However, under the new provision the fine or compensation awarded by the Trial Court have been given attributes of finality. Under the amended provisions, it has been provided that the compensation ordered by the Trial Court or the Appellate Court under provision of Sec....
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....nil Kumar Goel versus Kishan Chand Kaura;2008(1)R.C.R(Criminal)290 to submit that in case of another provision of the same Act, whereby the power was sought to be given to the Magistrate to extend the time period for filing of the complaint, Hon'ble Supreme Court has held such a provision to be substantive in nature and the same was held inapplicable to the cases where time of 30 days for filing complaint had already expired before that amendment. The same is the situation qua the present amendment also since this also; affects the substantive right of the petitioners. Hence, being a substantive provision, the provision of Section 143-A and Section 148 of the Act cannot be made applicable restrospectively; to the cases which were already pending on the date of enforcement of these provisions. The other learned counsels appearing for the petitioners have also argued on the similar lines; by emphasizing that any provision which has the potential of effecting the substantive right of a litigant cannot be applied to the pending cases so as to give retrospectivity to the same unless the same is made retrospective by the Act itself. It is further pointed out by the learned counsels tha....
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....give effect to the intention of the legislator, which in the present case is to curb the delay in trial and to discourage default in Negotiable Instruments. Learned counsel has further submitted that to arrive at a correct purposive interpretation, the Court can very well take help of the internal aids of interpretation, such as language, title and positional sequence of the provision and the external aid of interpretation like the objects and reasons and the parliamentary debates. If all these things are commulatively seen in the present case; then the only predominant intention of the legislator is to curb the delay in procedures. Hence, the amendment is only procedural in nature. It is further submitted that the fact that the provisions are procedural in nature is also clear from the fact that these sections have been added in the statute at a place after the sections defining the penal provisions, and has been put alongwith the provisions dealing with the procedure. Learned counsel has further submitted that even if the provision is taken to be affecting some aspect of right of party to the lis; still the same can be applied to the pending proceedings. Every provision effecting....
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....affects the right of the accused to defend himself. The provision, per se, does not prescribe for any disqualifying consequences; in case of non-deposit of the amount as ordered by the Appellate Court, qua the right of the accused/appellant to prosecute his appeal or to defend himself. Hence, the provision has been enacted only by way of streamlining the procedure and practice of the Court, and if provision relates to the procedure and practice of the Court, the same can be applied to the pending cases. In the end, it is submitted by learned counsel for the respondent that right to appeal is only a statutory right. A person cannot claim a right to file or to prosecute the appeal in any particular manner or according to particular procedure or provision. The appeal has to be filed and carried on only subject to the provisions governing such an appeal at the relevant stages. Hence, any provision which is created during the pendency of the appeal, qua filing or prosecuting the appeal has to be made applicable to all the cases pending at the time or to be filed after the date of enforcement of the provision. Having heard the learned counsel for the parties and perusing the documents ....
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.... qua the applicability of the amended provisions with effect from 02.08.2018. However, these have to be applied only to the cases arising from transactions of default of cheques; which take place after the introduction of these provisions. If the cheques already stood defaulted, the complaints already stood filed and the trial or appeal arisen from such transactions are pending, then these provisions cannot be applied to such cases; them because this would tantamount to give the retrospective effect to the amendment, despite the fact that the legislature has not provided for restrospective application of these provisons. As stated above, learned counsels have argued that the amendments create a new liability/obligation upon the accused, although his act; liable to be punished; already stood committed on a prior date, when such an obligation was not contemplated by law. Hence this would tantamount to affecting the substantive right of the accused. Therefore, by no means, such an amendment can be treated to be procedural in nature. Hence, the same does not deserve to be applied to the pending cases. This Court finds that the Supreme Court has amply clarified the legal proposition t....
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....ht always acts prospectively. It is trite law that every statue is prospective unless it is expressly or by necessary implication made to have retrospective operation. Right of appeal may be a substantive right but the procedure for filing the appeal including the period of limitation cannot be called a substantive right; and aggrieved person cannot claim any vested right claiming that he should be governed by the old provision pertaining to period of limitation. Procedural law is retrospective, meaning thereby that it will apply even to acts or transactions under the repealed Act." Therefore, the next question to be considered by this Court, in the present case is whether the provisions contained in Section 143-A and Section 148 of the Act are substantive in nature or the procedural one. If the provisions are substantive in nature then the same cannot be applied retrospectively to the pending cases. However, if the same are procedural in nature then the same has to be applied to all the cases, including the one pending before the Court on the date, the amendment was enforced. The substantive right of a person is the entitlement which is available to him by virtue of his very e....
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....ction or the statute as a whole. While interpreting non obstante clause, the Court is required to find out the extent to which the legislature intended to do so and the context in which the non obstante clause is used. This rule of interpretation has been applied in several decisions. In State of West Bengal v. Union of India [(1964) 1 SCR 371], it was observed that the Court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law and the setting in which the clause to be interpreted occurs. 29. In Madhav Rao Jivaji Rao Scindia v. Union of India and another [(1971) 1 SCC 85] Hidayatullah, C.J. observed that the non obstante clause is no doubt a very potent clause intended to exclude every consideration arising from other provisions of the same statute or other statute but for that reason alone we must determine the scope of that provision strictly. When the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissi....
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.... passing the sentence may take action for the recovery of the fine in either or both of the following ways, that is to say, it may (a) issue a warrant for the levy of the amount by attachment and sale of any moveable property belonging to the offender; (b) issue a warrant to the collector of the district, authorising him to realise the amount as arrears of land revenue from the movable or immovable property, or both of the defaulter: Provided that, if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no Court shall issue such warrant unless, for special reasons to be recorded in writing, it considers it necessary so to do, or unless it has made an order for the payment of expenses or compensation out of the fine under section 357. (2) The State Government may make rules regulating the manner in which warrants under clause (a) of Sub-Section (1) are to be executed, and for the summary determination of any claims made by any person other than the offender in respect of any property attached in execution of such warrant. (3) Where the Court issues a warr....
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....other aspect which is clear from Section 143-A of the Act, and which shows that the provision is not procedural, is that this provision is not shown to be as a step toward furtherance of the procedure of trial. The provision is not contemplated as one more step governing, simplifying, or modifying the steps in the trial of the accused by the Court. Accordingly, this section does not authorize the Trial Court to pass any order, having consequences against the accused qua the steps of the trial; in case of nonpayment of interim compensation. This section does not authorize the Court to close the defense or to take any other step for speeding up the trial as such. On the contrary, this provision is intended to create a 'stand alone liability' which has to be discharged independent of the trial and which shall have consequences outside the trial only. Hence, by no means, this provision can be taken as procedural in nature. Needless to say that everything prescribed as part of procedural provision or every order of Trial Court, passed during the trial cannot, necessarily, be termed as procedural in nature. The test for determining the substantive or procedural nature of the prov....
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....ccused; by awarding compensation and then making the same liable to be recovered as a fine. After all the punishment is nothing but an eclipse or clog upon right to life and liberty of a person or upon right to belongings and estates of such a person, imposed as per the mandate of law. However, under the provisions of Constitution of India, the person cannot be subjected to sentence more than what he was liable to on the date when he conducted himself in a manner which has made him liable for such a sentence. It would be no consolation to the rights of accused to say that the compensation awarded by the Trial Court is only interim measure and that the accused would get the same back with interest if he is acquitted. By virtue of sheer amount of 'interim compensation', which may work out in a particular case in crores of rupees, for a person who is not having means of more than few lakhs of rupees, the consequence under this Section can be totally devastating, irrecoverable and irreparable. Therefore, this provision can at the best be applicable prospectively where prospective accused would be aware of such consequences in advance, and it cannot be applied to the cases where....
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....n accused, the Trial Court may not impose any fine upon the convict/appellant at all. In such a situation, the Appellate Court would not be able to order the appellant to deposit any amount; because under the provision, Appellate Court is authorized to order deposit of 20% of 'fine' or 'compensation' awarded by the Trial Court. If there is no order of fine or compensation then there cannot be any order of deposit of any amount at the appellate stage. In case the Trial Court imposes a fine, which can be up to twice the amount of the cheque and which can be treated as compensation to be paid to the complainant, in that situation, liability of the accused/appellant has already been determined by the Trial Court. The liability to pay the amount to the complainant already exists at the time when the appellant comes before the Appellate Court. It is discretion of the Appellate Court whether to suspend the order of imposition of fine or compensation or not. In case the fine is not stayed by the Appellate Court then the entire amount of fine or compensation, otherwise also, becomes recoverable from the accused/appellant as per the procedure prescribed under Section 421 of C....
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....ce before the Court on the date or dates on or before which payment of the fine or the instalments thereof, as the case may be, is to be made; and if the amount of the fine or of any instalment, as the case may be, is not realised on or before the latest date on which it is payable under the order, the Court may direct the sentence of imprisonment to be carried into execution at once. (2) The provisions of sub- section (1) shall be applicable also in any case in which an order for the payment of money has been made on non- recovery of which imprisonment may be awarded and the money is not paid forthwith; and, if the person against whom the order has been made, on being required to enter into a bond such as is referred to in that subsection, fails to do so, the Court may at once pass sentence of imprisonment." The above-said provision does authorize the Court to suspend the execution of the sentence of 'default imprisonment', if the convict submits bond for payment of the amount on the dates, as ordered by the Court. However, this section also provides the consequences for nonpayment of the amount of fine or compensation as well, which can be cancellation of bond of the ....
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....asons, the rationale qua objects and reasons of the Act, which is applicable at the stage of trial; cannot be imported to the stage of appeal. As mentioned above, at the stage of trial, the provision of Section 143-A of the Act has created a new 'obligation' against the accused, which was not contemplated by the existing law and which created a substantive liability upon him, whereas the provision of Section 148 of the Act only reiterated; and to some extent modified in favour of the appellant, the procedure of recovery already existing in the statute book. Still further, this Court does not find any force in the argument of the learned counsels for the appellants that Appellate Court could not have made the suspension of sentence of the petitioners conditional upon deposit of amount of interim compensation as ordered by Appellate Court. It deserves to be noted here that even suspension of sentence is in the judicial discretion of the Appellate Court. If the Appellate Court makes such judicial discretion subject to a statutory provision relating to deposit of interim compensation, then no fault could be found with such exercise of discretion. Moreover such a course of actio....