TaxTMI 
TaxTMI 
2026 (5) TMI 428
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.... shall be treated as the total sentence in all 17 complaints, including the sentence in default of payment of compensation awarded by the learned Magistrate. 3. The Petition arises in the backdrop of the following facts : 2.1 Respondent No. 2 - complainant claimed to have sold and delivered goods to the Mintaur Engineering Private Ltd. (A1), of which the Petitioner (A2) was the director. Asserting that an amount of Rs. 22,68,07,788/- was due and payable by the accused towards the price of the goods sold and delivered and in discharge of the said liability, accused Nos. 1 and 2 had drawn 60 cheques and, during the period 7 July 2014 to 30 July 2014, those cheques were dishonoured upon presentment, the complainant (R2) lodged 17 complaints on 12 September 2014 before the same Court. 2.2 Post completion of the trial, in all 17 complaints, by separate judgments delivered on the same day i.e. 9 May 2017, by the learned Metropolitan Magistrate, 63rd Court, Andheri, the Petitioner came to be convicted for the offence punishable under Section 138 read with Section 141 of the Act, 1881 and sentenced to suffer simple imprisonment for 15 months and also pay distinct amoun....
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....arties, I have also perused the material on record. 5. Mr. Bharadwaj, the learned Counsel for the Petitioner, canvassed a two-pronged submission. First, the initiation of prosecution for the offence punishable under Section 138 read with Section 141 of the Act, 1881 in 17 distinct complaints was mala fide. The complainant has evidently misused the custody of 60 cheques. In effect, there was only one transaction of purported sale and delivery of the goods by the complainant to the accused and the latter allegedly owed a consolidated amount towards the price of the goods sold and delivered. In fact, the demand notice issued on behalf of the complainant referred to the outstanding amount of Rs. 22,68,07,788/- only. Without any specification and bifurcation of the amount for which the cheques were drawn, the cheques were arbitrarily included in one complaint. Nor there was any co-relation of the cheques included in one complaint with the invoices, etc. The alleged offence was committed as a part and parcel of one and the same transaction. Therefore, the very prosecution of the Petitioner in 17 complaints was legally infirm. If at all, Mr. Bharadwaj would urge, the accused could have....
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.... liability, is factually incorrect and legally unsustainable. An effort was made by Mr. Karia to co-relate the cheques which were the subject matter of 17 distinct complaints with the distinct underlying invoices raised by the complainant. 11. Refuting the submissions of Mr. Bharadwaj that there was no reason to file 17 complaints, Mr. Karia would urge, the demand notice and the respective complaints contain adequate averments in regard to the distinct transactions in discharge of the liability incurred whereunder, separate cheques were drawn and, resultantly, separate complaints were filed. Mr. Karia placed reliance on a decision of the Supreme Court in the case of V.K. Bansal V/s. State of Haryana and Anr. (2013) 7 SCC 211 to bolster up the submission that separate complaints in respect of distinct transactions were in order. 12. Mr. Karia would urge that, it is settled legal position that the sentences in default of payment of fine, cannot run concurrently. Those sentences are required to be suffered independently. Thus, the prayer of the Petitioner to declare that the sentence already undergone by the Petitioner shall be treated as total sentence in default of payment of ....
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....Company, a sum of Rs. 22,68,07,788/-, was due and payable and towards the discharge of the said liability, the accused has drawn distinct cheques referred to in each of the complaints. 15. Likewise, in the complaints, it was alleged that a sum of Rs. 22,68,07,788/- was outstanding towards the goods sold and delivered by the complainant to the accused No. 1, and the cheques drawn towards the payment of the price of the goods sold and delivered were dishonoured on presentment. It could be urged that, though the total outstanding amount was the same, the cheques drawn towards the discharge of the liability in part, in each of the complaints were presented and dishonoured on different dates giving rise to distinct causes of action for lodging separate complaints. 16. Nonetheless, were the courts below required to pose unto themselves the question as to whether, despite finding the accused guilty of the offences punishable under Sections 138 read with Section 141 of the Act, in all the 17 complaints, the accused could have been sentenced to suffer imprisonment on one count of the charge and awarded consolidated compensation on the basis of the aggregate amount covered by the disho....
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....21. In the case of State of Punjab V/s. Madan Lal (2009) 5 SCC 238, where the accused was convicted for the offence punishable under Section 138 of the Act in three complaints, and sentenced to suffer imprisonment, without giving benefit of Section 427 of the Code, the Supreme Court upheld the order of the High Court that the sentence imposed by the Court in all the three complaints shall run concurrently. 22. In the case of V.K. Bansal (supra), the Supreme Court enunciated that, under Section 427(1) the court has the power and discretion to issue a direction but in the very nature of the power so conferred upon the Court the discretionary power shall have to be exercised along the judicial lines and not in a mechanical, wooden or pedantic manner. It is difficult to lay down any straitjacket approach in the matter of exercise of such discretion by the Courts. There is no cut and dried formula for the Court to follow in the matter of issue or refusal of a direction within the contemplation of Section 427(1). Whether or not a direction ought to be issued in a given case would depend upon the nature of the offence or offences committed and the fact-situation in which the question o....
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....nment in default of payment of the fine. (2) The imprisonment awarded under this section may be in addition to a substantive sentence of imprisonment for the maximum term awardable by the Magistrate under section 29." 27. Section 65 of the IPC, 1860 prescribes limit of imprisonment for non-payment of fine. It reads as under : "65. Limit to imprisonment for non-payment of fine, when imprisonment and fine awardable - The term for which the Court directs the offender to be imprisoned in default of payment of a fine shall not exceed one-fourth of the term of imprisonment which is the maximum fixed for the offence, if the offence be punishable with imprisonment as well as fine." 28. A conjoint reading of the aforesaid provisions would indicate that the Magistrate is empowered to award imprisonment in default of payment of fine, as is authorized by law. The proviso to sub-section (1), however, restricts the power of the Magistrate to impose sentence in default of payment of fine. Firstly, it shall not be in excess of the powers of the Magistrate under Section 29. Secondly, where the imprisonment has been awarded as a part of the substantive sentence, default sente....
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....ment in default of payment of compensation by the learned Magistrate was clearly illegal. The learned Additional Sessions Judge also failed to notice the legal infirmity in the sentence in default of payment of compensation imposed by the learned Magistrate. Default Sentence : Consecutive or Concurrent : 33. The legal position on the aspect of the sentences in default in payment of fine running consecutively and not concurrently, is well recognized. To start with, Section 64 of the IPC, 1860 provides that, it shall be competent to the Court which sentences the offender to direct by the sentence that, in default of payment of fine, the offender shall suffer imprisonment for a certain term, which imprisonment shall be in excess of any other imprisonment to which he may have been sentenced or to which he may be liable under a commutation of a sentence. Section 64 of the Penal Code, thus, mandates that the sentence awarded for non-payment of fine, shall be in excess of any other imprisonment to which the accused may have been sentenced. 34. Sub-section (2) of Section 30 of the Code, provides that the imprisonment awarded under the said Section may be in addition to the substan....
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....r in appeal or in revision or in other appropriate judicial proceedings or otherwise. A term of imprisonment ordered in default of payment of fine stands on a different footing. A person is required to undergo imprisonment either because he is unable to pay the amount of fine or refuses to pay such amount. He, therefore, can always avoid to undergo imprisonment in default of payment of fine by paying such amount. It is, therefore, not only the power, but the duty of the court to keep in view the nature of offence, circumstances under which it was committed, the position of the offender and other relevant considerations before ordering the offender to suffer imprisonment in default of payment of fine." (emphasis supplied) 38. Following the aforesaid pronouncement, in the case of Sahejadkhan Mahebubkhan Pathan V/s. State of Gujarat (2013) 1 SCC 570, the Supreme Court interfered with the order of imposition of three years imprisonment in default of payment of fine of Rs. 1.5 Lakhs, for having committed the offences punishable under the NDPS Act, 1985 and reduced it to six months. The Supreme Court reiterated the position in law, as under : "12. It is clear and rei....
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....f the cheque as a negotiable instrument in the commercial transactions. The penal measure primarily subserves the end of compensatory justice rather than retributive or punitive element. Nonetheless, while imposing the compensation, the Court ought to have due regard to the situation in life of the parties, especially that of accused. The circumstances peculiar to the accused are of critical salience while determining the quantum of sentence of imprisonment in default of payment of fine or compensation. The maximum permissible sentence in default of payment of compensation may be legitimate. However, the Court must pose unto itself a question whether that would be reasonable and justifiable in the facts and circumstances of the given case, for there is an essential distinction between the permissibility of the action and justifiability thereof. 41. Applying these principles to the facts of the case, I find it rather difficult to accede to the submission of Mr. Karia that the Petitioner must suffer six months imprisonment in default of payment of compensation in each of the cases. The implications of the submission of Mr. Karia are that the Petitioner shall suffer substantive sen....
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....use of his poverty and consequent inability to meet his contractual liability is appalling. To be poor, in this land of daridra Narayana, is no crime and to 'recover' debts by the procedure of putting one in prison is too flagrantly violative of Art. 21 unless there is proof of the minimal fairness of his wilful failure to pay in spite of his sufficient means and absence of more terribly pressing claims on his means such as medical bills to treat cancer or other grave illness. Unreasonableness and unfairness in such a procedure is inferable from Art.11 of the Covenant. But this is precisely the interpretation we have put on the Proviso to s. 51 C.P.C. and the lethal blow of Art. 21 cannot strike down the provision, as now interpreted." (emphasis supplied) 44. The case of Sanjay Vasudeva (supra), on which reliance was placed by Mr. Bharadwaj, appears to be on all four with the facts of the case at hand. In the said case, the accused therein was convicted in as many as 82 complaints for the offence punishable under Section 138 of the N.I. Act, 1881. Despite aggreging with the correctness of the submission that, none of the complainants have received the compensation awa....