Surinder Singh Deswal @ Col. S. S. Deswal vs Virender Gandhi

REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS.1936-1963 OF 2019

SURINDER SINGH DESWAL @ COL. S.S. DESWAL & ORS. ... APPELLANTS

VERSUS

VIRENDER GANDHI & ANR. ... RESPONDENTS

J U D G M E N T

ASHOK BHUSHAN, J.

These appeals have been filed against a common

judgment of the Punjab and Haryana High Court dated

10.09.2019 dismissing 28 petitions filed by the

appellants under Section 482 of Cr.P.C.

2. Brief facts of the case giving rise to these

appeals are:

Appellant Nos. 1 and 2 are partners of appellant

No.3, M/s. Bhoomi Infrastructure Co., now known as

GLM Infratech Private Limited. Respondent No.1,

Virender Gandhi, who was also a partner of the Firm Signature Not Verified Digitally signed by ARJUN BISHT

retired Date: 2020.01.08 14:57:40 IST Reason: with respect of which Memorandum of

Understanding dated 30.11.2013 was entered into. A 2

cheque No.665643 dated 31.03.2014 drawn on Canara

Bank amounting to Rs.45,84,915/- was issued by the

appellant to respondent No.1 against the part payment

of the retirement dues. Similarly, 63 other cheques

were issued by the appellants in favour of respondent

arising out of the same transaction. On 06.04.2015,

respondent No.1 deposited cheque No.665643 in his

Bank that is Karnataka Bank Ltd., Sector-11,

Panchkula. The cheque was dishonoured and returned

vide memo dated 07.04.2015 with the remarks “funds

insufficient”. Other 63 cheques were also

dishonoured.

3. Respondent No.1 sent the statutory demand notice

under Section 138 of the Negotiable Instruments Act,

1881 (hereinafter referred to as “NI Act”) on

06.05.2015. Complaints were filed by respondent No.1

against the appellants under Section 138 of the NI

Act before the Judicial Magistrate, Ist Class,

Panchkula. In all 28 complaints were filed. The

complaints were decided by Judicial Magistrate vide

his judgment dated 30.10.2018 holding the appellant

Nos.1 and 2 guilty for the offence punishable under 3 Section 138 of the NI Act, who were accordingly

convicted. By order dated 13.11.2018 the appellants

were sentenced to undergo imprisonment for a period

of two years and to pay jointly and severally an

amount equal to the amount involved in the present

case i.e. cheque amount plus 1% of this amount as

interest as well as litigation expenses.

4. The appeal was filed by the appellants against

the judgment dated 30.10.2018 and sentence dated

30.11.2018 in the Court of Sessions Judge, Panchkula.

In the appeal the appellants had filed an application

under Section 389 of Cr.P.C. for suspension of

sentence. The learned trial court has suspended the

sentence of the appellants by order dated 13.11.2018

for 30 days. The Appellate Court vide order dated

01.12.2018 entertained the appeal and suspended the

sentence during the pendency of the appeal, subject

to furnishing of bail bond and surety bond in the sum

of Rs.50,000/- with one surety in the like amount and

also subject to deposit of 25% of the amount of

compensation awarded by the learned trial court in

favour of the complainant. The appellants were 4

directed to deposit the amount within four weeks by

way of demand draft in the name of the Court.

5. The appellants were convicted in all 28 cases and

the total amount to be deposited under the order of

the Appellate Court was, in all cases,

Rs.9,40,24,999/-. The appellants preferred an

application seeking extension of time to deposit the

amount of 25% of the compensation amount. The learned

Sessions Judge allowed the application on 19.12.2018

granting time to deposit the amount till 28.01.2019.

The appellants filed an application under Section 482

Cr.P.C. seeking quashing of the part of the order

dated 01.12.2018 passed by the learned Additional

Sessions Judge, Panchkula, whereby the said Court has

imposed a condition to deposit 25% of the amount of

compensation while suspending the sentence.

6. The High Court vide its judgment dated 24.04.2019

dismissed the petition of the appellants under

Section 482 Cr.P.C. and other connected petitions.

The appellants preferred Special Leave

Petition(Criminal) Nos.4948-4975/2019 before this 5

Court against the judgment dated 24.04.2019 of the

Hight Court of Punjab and Haryana at Chandigarh.

7. This Court vide its judgment dated 29.05.2019

dismissed the criminal appeals arising out of the

SLPs(Criminal). Learned Additional Sessions Judge,

Panchkula in view of the non-compliance of the order

dated 20.07.2019 directed the appellants to surrender

in the trial court within four days. The appellants

were also not present when the case was taken by the

Additional Sessions Judge on 20.07.2019. Another

petition under Section 482 Cr.P.C. was filed by the

appellants challenging the order dated 20.07.2019

passed by the Additional Sessions Judge. The 28

petitions under Section 482 Cr.P.C. filed by the

appellants have been dismissed by the impugned

judgment of the Punjab and Haryana High Court dated

10.09.2019. Aggrieved by which judgment these appeals

have been filed by the appellants.

8. Shri Balbir Singh, learned senior counsel

appearing for the appellants questioning the order of

the Additional Sessions Judge dated 20.07.2019 and

judgment of the High Court submits that by mere non- 6

deposit of 25% of the amount of compensation as

directed on 01.12.2018 cannot result in vacation of

suspension of sentence. Learned counsel submits that

the direction to deposit 25% of the compensation as

directed by the trial court could not have been made

under Section 148 of the NI Act. Section 148 of the

NI Act having come into force on 01.09.2018 could not

have been relied by the Courts below. Since, the

complaint was filed in the year 2015 alleging offence

under Section 138 of the NI Act which was much before

the enforcement of Section 148 of the NI Act. He

further submits that non-deposit of 25% of the amount

of compensation could not lead to vacation of the

order suspending the sentence rather it was open to

the respondents to recover the said amount as per the

procedures prescribed under Section 421 Cr. P.C.

9. Learned counsel for the appellants submits that

this Court in Criminal Appeal No.1160 of 2019 (G.J.

Raja vs. Tejraj Surana) decided on 30.07.2019 has

held the provisions of Section 143A of NI Act to be

prospective only that is to apply with respect to

offence committed after insertion of Section 143A 7

w.e.f. 01.09.2018. He submits that both Sections 143A

and Section 148 inserted in NI Act by amendment Act

20 of 2018, hence Section 148 was not attracted in

the present case which was only prospective and could

have been utilised in offences which were committed

after 01.09.2018. He has also placed reliance on the

judgment of Bombay High Court in Ajay Vinodchandra

Shah vs. State of Maharashtra, (2019) 4 Mah LJ 705

and another judgment of Punjab and Haryana High Court

at Chandigarh dated 18.07.2019 in CRM-M-29187 of

2019(O&M)(Vivek Sahni and another vs. Kotak Mahindra

Bank Ltd.).

10. We have considered the submissions of learned

counsel for the parties and have perused the records.

11. The appellants had challenged the order dated

01.12.2018 passed by the Additional Sessions Judge,

Panchkula by which while entertaining the criminal

appeal of the appellants, Appellate Court has

suspended the substantive sentence of the appellants

subject to deposit 25% of the compensation awarded by

the trial court in favour of the complainant. The 8

petitions under Section 482 Cr.P.C. filed by the

appellants questioning the order dated 01.12,2019

were dismissed by the High Court vide its judgment

dated 24.04.2019 against which judgment the

appellants have also filed SLP(Criminal)Nos.4948-4975

of 2019) which were dismissed by this Court on

29.05.2019. All arguments raised by the appellants

questioning the order dated 01.12.2018 have been

elaborately dealt with by this Court and rejected.

The submissions regarding challenge to the order

dated 01.12.2018 of the learned Additional Sessions

Judge which have been addressed before us have been

considered by this Court and rejected. It is useful

to refer paragraph 8., 8.1 and 9 of the judgment of

this Court which are to the following effect:

“8. It is the case on behalf of the Appellants that as the criminal complaints against the Appellants Under Section 138 of the N.I. Act were lodged/filed before the amendment Act No. 20/2018 by which Section 148 of the N.I. Act came to be amended and therefore amended Section 148 of the N.I. Act shall not be made applicable. However, it is required to be noted that at the time when the appeals against the conviction of the Appellants for the offence Under Section 138 of the N.I. Act were preferred, Amendment Act No. 20/2018 amending Section 148 of the N.I. Act came into force w.e.f.

9 1.9.2018. Even, at the time when the Appellants submitted application/s Under Section 389 of the Code of Criminal Procedure to suspend the sentence pending appeals challenging the conviction and sentence, amended Section 148 of the N.I. Act came into force and was brought on statute w.e.f. 1.9.2018. Therefore, considering the object and purpose of amendment in Section 148 of the N.I. Act and while suspending the sentence in exercise of powers Under Section 389 of the Code of Criminal Procedure, when the first appellate court directed the Appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court, the same can be said to be absolutely in consonance with the Statement of Objects and Reasons of amendment in Section 148 of the N.I. Act.

8.1. Having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction Under Section 138 of the N.I. Act, is conferred with the power to direct the convicted Accused - Appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. By the amendment in Section 148 of the N.I. Act, it cannot be said that any vested right of appeal of the Accused - Appellant has been taken away and/or affected. Therefore, submission on behalf of the Appellants that amendment in Section 148 of the N.I. Act shall not be made applicable retrospectively and more 10

particularly with respect to cases/complaints filed prior to 1.9.2018 shall not be applicable has no substance and cannot be accepted, as by amendment in Section 148 of the N.I. Act, no substantive right of appeal has been taken away and/or affected. Therefore the decisions of this Court in the cases of Garikapatti Veeraya (supra) and Videocon International Limited (supra), relied upon by the learned senior Counsel appearing on behalf of the Appellants shall not be applicable to the facts of the case on hand. Therefore, considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act stated hereinabove, on purposive interpretation of Section 148 of the N.I. Act as amended, we are of the opinion that Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence Under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence Under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the N.I. Act would be frustrated. Therefore, as such, no error has been committed by the learned first appellate court directing the Appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court considering Section 148 of the N.I. Act, as amended.

9. Now so far as the submission on behalf of the Appellants that even considering the language used in Section 148 of the N.I. Act as amended, the appellate Court "may" order the Appellant to deposit such sum which shall be a 11

minimum of 20% of the fine or compensation awarded by the trial Court and the word used is not "shall" and therefore the discretion is vested with the first appellate court to direct the Appellant - Accused to deposit such sum and the appellate court has construed it as mandatory, which according to the learned Senior Advocate for the Appellants would be contrary to the provisions of Section 148 of the N.I. Act as amended is concerned, considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the N.I. Act, though it is true that in amended Section 148 of the N.I. Act, the word used is "may", it is generally to be construed as a "rule" or "shall" and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 of the N.I. Act confers power upon the Appellate Court to pass an order pending appeal to direct the Appellant-Accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the Appellant-Accused Under Section 389 of the Code of Criminal Procedure to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 of the N.I. Act, a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the appellate court for sufficient cause shown by the Appellant. Therefore, if amended Section 148 of the 12 N.I. Act is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 of the N.I. Act, but also Section 138 of the N.I. Act. Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of the dishonoured of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonoured cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque who has to spend considerable time and resources in the court proceedings to realise the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions, the Parliament has thought it fit to amend Section 148 of the N.I. Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Section 138 of the N.I. Act.”

12. This Court having already upheld the order of the

Appellate Court dated 01.12.2018 suspending the

sentence subject to deposit 25% of the amount of

compensation any submission questioning the order of

the Appellate Court directing the suspension of

sentence subject to deposit of 25% of the

compensation amount needs no further consideration.

By dismissal of the criminal appeals of the 13

appellants on 29.05.2019 by this Court the challenge

stands repelled and cannot be allowed to be reopened.

13. The second round of litigation which was

initiated by the appellant by filing application

under Section 482 Cr.P.C. was against the order dated

20.07.2019 passed by the Additional Sessions Judge,

Panchkula by which Additional Sessions Judge held

that the appellant having not complied with the

direction dated 01.12.2018 to deposit 25% of the

amount of compensation, the order of suspension of

sentence shall be deemed to have been vacated. The

order dated 20.07.2019 was an order passed by the

Additional Sessions Judge on account of failure of

the appellant to deposit 25% of the amount of

compensation. The suspension of sentence on

01.12.2018 was subject to the condition of deposit of

25% of the amount of compensation, when the condition

for suspension of sentence was not complied with,

learned Additional Sessions Judge was right in taking

the view that order of suspension of sentence shall

be deemed to have been vacated. Challenge to order

dated 20.07.2019 has rightly been repelled by the 14

High Court by its elaborate and well considered

judgment dated 10.09.2019.

14. Learned counsel for the appellant has placed

reliance on the judgment of this Court dated

30.07.2019 in Criminal Appeal No.1160 of 2019 (G.J.

Raja vs. Tejraj Surana). This Court in the above case

was considering provisions of Section 143A of the

N.I. Act which was inserted by the same Amendment Act

20 of 2018 by which Section 148 of the N.I. Act has

been inserted. This Court took the view that Section

143A is prospective in nature and confined to cases

where offences were committed after the introduction

of Section 143A i.e. after 01.09.2018. In paragraph

22 of the judgment following has been held:

“22. In our view, the applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation.”

15. The judgment of this Court which was delivered in

the case of the present appellants i.e. Criminal

Appeal Nos.917-944 of 2019 (Surinder Singh Deswal @

Col. S.S. Deswal and others vs. Virender Gandhi) (in 15

which one of us M.R.Shah, J was also a member) was

also cited before the Bench deciding the case of G.J.

Raja. This Court in its judgment dated 29.05.2019 has

rejected the submission of the appellants that

Section 148 of N.I. Act shall not be made applicable

retrospectively. This Court held that considering the

Statement of Objects and Reasons of the amendment in

Section 148 of the N.I. Act, on purposive

interpretation of Section 148 of the N.I. Act as

amended, shall be applicable in respect of the

appeals against the order of conviction and sentence

for the offence under Section 138 of the N.I. Act,

even in a case where the criminal complaints for the

offence under Section 138 of the N.I. Act were filed

prior to amendment Act No.20/2018 i.e. prior to

01.09.2018.

16. The Bench deciding G.J. Raja’s case has noticed

the judgment of this Court in the appellants’ case

i.e. Surinder Singh Deswal’s case and has opined that

the decision of this Court in Surinder Singh Deswal’s

case was on Section 148 of the N.I. Act which is a

stage after conviction of the accused and 16

distinguishable from the stage in which the interim

compensation was awarded under Section 143A of the

N.I.Act. When the Bench deciding G.J. Raja’s

case(supra) itself has considered and distinguished

the judgment of this Court in appellants’ own case

i.e. Surinder Singh Deswal’s, reliance by the learned

counsel for the appellants on the judgment of this

Court in G.J. Raja’s case is misplaced. It is useful

to refer to paragraph 23 of the judgment in G.J.

Raja’s case which is to the following effect:

“23. We must, however, advert to a decision of this Court in Surinder Singh Deswal and Ors. v. Virender Gandhi (2019) 8 SCALE 445 where Section 148 of the Act which was also introduced by the same Amendment Act 20 of 2018 from 01.09.2018 was held by this Court to be retrospective in operation. As against Section 143A of the Act which applies at the trial stage that is even before the pronouncement of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the Accused is already found guilty of the offence Under Section 138 of the Act. It may be stated that there is no provision in Section 148 of the Act which is similar to Sub-Section (5) of Section 143A of the Act. However, as a matter of fact, no such provision akin to Sub-section (5) of Section 143A was required as Sections 421 and 357 of the Code, which apply post-conviction, are adequate to take care of such requirements. In that sense said Section 148 depends upon the existing 17

machinery and principles already in existence and does not create any fresh disability of the nature similar to that created by Section 143A of the Act.

Therefore, the decision of this Court in Surinder Singh Deswal (2007) 13 SCC 492 stands on a different footing.”

In view of the above, the judgment of this Court in

the case of G.J. Raja does not help the appellants.

17. The judgment of Punjab and Haryana High Court in

Vivek Sahni and another(supra) which has been relied

by the learned counsel for the appellants has been

noted and elaborately considered by the High Court in

the impugned judgment. In paragraph 14 and 15 of the

impugned judgment of the High Court reasons have been

given for distinguishing the Vivek Sahni’ case.

18. The High Court is right in its opinion that

question No.2 as framed in Vivek Sahni’s case was not

correctly considered. When suspension of sentence by

the trial court is granted on a condition, non-

compliance of the condition has adverse effect on the

continuance of suspension of sentence. The Court

which has suspended the sentence on a condition,

after noticing non-compliance of the condition can 18

very well hold that the suspension of sentence stands

vacated due to non-compliance. The order of the

Additional Sessions Judge declaring that due to non-

compliance of condition of deposit of 25% of the

amount of compensation, suspension of sentence stands

vacated is well within the jurisdiction of the

Sessions Court and no error has been committed by the

Additional Sessions Judge in passing the order dated

20.07.2019.

19. It is for the Appellate Court who has granted

suspension of sentence to take call on non-compliance

and take appropriate decision. What order is to be

passed by the Appellate Court in such circumstances

is for the Appellate Court to consider and decide.

However, non-compliance of the condition of

suspension of sentence is sufficient to declare

suspension of sentence as having been vacated.

20. Insofar as the judgment of the Bombay High Court

in Ajay Vinodchandra Shah (supra) which has been

relied by the learned counsel for the appellant, it

is sufficient to observe that the High Court did not

have benefit of judgment of this Court dated 19

29.05.2019 in Surinder Singh Deswal’s case. The

judgment of the Bombay High Court was delivered on

14.03.2019 whereas judgment of this Court in

appellants’ case is dated 29.05.2019. In view of the

law laid down by this Court in Surinder Singh

Deswal’s case decided on 29.05.2019, the judgment of

Bombay High Court in Ajay Vinodchandra Shah’s case

cannot be said to be a good law insofar as

consequences of non-compliance of condition of

suspension of sentence is concerned.

21. It is further to note that even Bombay High Court

while modifying the direction to deposit 25% of the

amount of total compensation directed the accused to

deposit 20% of the amount of compensation within 90

days.

22. In view of the foregoing discussion, we do not

find any merit in the submission of the appellants.

The appeals are dismissed.

......................J. ( ASHOK BHUSHAN )

......................J. ( M.R. SHAH ) New Delhi, January 08, 2020.