2001 BomCR(Cri) 111 ; 2000 CrLJ 4676 ; 2000 DCR 1 ; 2000 7 SCC 388 ; 2000 SCC(Cri) 1388 ; 2000 6 Supreme 378
Supreme Court of India
(From Andhra Pradesh High Court)
M. Jagannadha Rao & M.B. Shah, JJ.
M/s. Cranex Ltd. & Anr. —Appellants
versus
M/s. Nagarjuna Finance Ltd. & Anr. —Respondents
Criminal Appeal No. 789 of 2000
(Arising out of SLP (Crl.) No. 2224 of 2000)
Decided on 14-9-2000
Counsel for the Parties :
For the Appellants : R. Venugopal Reddy, Sr. Advocate, Mrs. S. Usha Reddy, Advocate.
For the Respondents : A. Subba Rao, Advocate.
Act Referred :NEGOTIABLE INSTRUMENTS ACT : S.141, S.138
(A) This case pertains to the application of Section 138 of the Negotiable Instruments Act, which prescribes criminal penalties for the dishonour of cheques. The proceedings involve a conviction resulting in imprisonment and a fine, where the legal focus shifts to the impact of a subsequent settlement of the money claim during the pendency of a criminal appeal. The court examines the statutory power of the Appellate Court under the Act to reconsider conviction or sentencing when the underlying financial dispute is resolved through the payment of the dishonoured cheque amount, emphasizing that the court maintains discretion to either maintain the conviction or set it aside based on such subsequent developments.
(B) The core legal principle established is that the payment of the disputed cheque amount during the pendency of an appeal against conviction under the Negotiable Instruments Act constitutes a significant subsequent event. Such a settlement allows the Appellate Court to exercise its discretion to modify the sentence, impose a fine instead of imprisonment, or set aside the conviction entirely, especially when the complainant agrees not to press for a criminal penalty upon receipt of the funds.
Facts of the case:
An appellant was convicted under Section 138 of the Negotiable Instruments Act and sentenced to rigorous imprisonment and a fine. While a main appeal against this conviction was pending before the Appellate Court, the appellant pursued interlocutory applications which were dismissed by the trial court and subsequently by the High Court. During the pendency of the current appeal against the High Court's interlocutory order, the parties reached a settlement, and the appellant deposited the full amount of the dishonoured cheque in the trial court.
Findings of Court:
The court observed that the deposit of the cheque amount is a material change in circumstances. It noted that the respondent expressed a willingness to waive the pursuit of conviction or sentencing provided the deposited amount was released. The court found it appropriate to remit the matter back to the Appellate Court to consider these developments when deciding the final fate of the conviction.
Issues:
Whether the subsequent settlement and payment of the dishonoured cheque amount during the pendency of a criminal appeal should be considered by the Appellate Court to modify or set aside the conviction and sentence.
Ratio Decidendi:
In criminal proceedings under Section 138 of the Negotiable Instruments Act, the primary objective is often the recovery of the money. Therefore, if the cheque amount is paid during the appellate stage, the Appellate Court has the jurisdiction to take such subsequent events into account to pass an order it deems fit, including the setting aside of the conviction or the modification of the sentence, in accordance with the law.
Result:
The impugned order of the High Court in the interlocutory proceedings was set aside, and the matter was remanded to the Appellate Court to dispose of the appeal considering the settlement. The respondent was permitted to withdraw the deposited amount.
(A) This case pertains to the application of Section 138 of the Negotiable Instruments Act, which prescribes criminal penalties for the dishonour of cheques. The proceedings involve a conviction resulting in imprisonment and a fine, where the legal focus shifts to the impact of a subsequent settlement of the money claim during the pendency of a criminal appeal. The court examines the statutory power of the Appellate Court under the Act to reconsider conviction or sentencing when the underlying financial dispute is resolved through the payment of the dishonoured cheque amount, emphasizing that the court maintains discretion to either maintain the conviction or set it aside based on such subsequent developments.
(B) The core legal principle established is that the payment of the disputed cheque amount during the pendency of an appeal against conviction under the Negotiable Instruments Act constitutes a significant subsequent event. Such a settlement allows the Appellate Court to exercise its discretion to modify the sentence, impose a fine instead of imprisonment, or set aside the conviction entirely, especially when the complainant agrees not to press for a criminal penalty upon receipt of the funds.
Facts of the case:
An appellant was convicted under Section 138 of the Negotiable Instruments Act and sentenced to rigorous imprisonment and a fine. While a main appeal against this conviction was pending before the Appellate Court, the appellant pursued interlocutory applications which were dismissed by the trial court and subsequently by the High Court. During the pendency of the current appeal against the High Court's interlocutory order, the parties reached a settlement, and the appellant deposited the full amount of the dishonoured cheque in the trial court.
Findings of Court:
The court observed that the deposit of the cheque amount is a material change in circumstances. It noted that the respondent expressed a willingness to waive the pursuit of conviction or sentencing provided the deposited amount was released. The court found it appropriate to remit the matter back to the Appellate Court to consider these developments when deciding the final fate of the conviction.
Issues:
Whether the subsequent settlement and payment of the dishonoured cheque amount during the pendency of a criminal appeal should be considered by the Appellate Court to modify or set aside the conviction and sentence.
Ratio Decidendi:
In criminal proceedings under Section 138 of the Negotiable Instruments Act, the primary objective is often the recovery of the money. Therefore, if the cheque amount is paid during the appellate stage, the Appellate Court has the jurisdiction to take such subsequent events into account to pass an order it deems fit, including the setting aside of the conviction or the modification of the sentence, in accordance with the law.
Result:
The impugned order of the High Court in the interlocutory proceedings was set aside, and the matter was remanded to the Appellate Court to dispose of the appeal considering the settlement. The respondent was permitted to withdraw the deposited amount.
Order
Leave granted.
2. The case involves a settlement of the money claim during the pendency of a criminal appeal arising out of proceedings under Section 138 of the Negotiable Instruments Act. The main appeal, namely, Criminal Appeal No. 59/99, against the conviction is pending before the VIth Additional Metropolitan Sessions Judge, Secunderabad in the matter arising under Section 138 of the Negotiable Instruments Act. That is an appeal against the order dated 8.2.99 of the XVth Metropolitan Magistrate, Hyderabad, sentencing the appellant No. 2, representing the firm, to undergo rigorous imprisonment for 6 months and further to pay a fine of Rs. 10,000/- or in default, to undergo simple imprisonment for a further period of 3 months. There is also a direction against the 2nd appellant representing the 1st appellant Company, to pay a fine of Rs. 10,000/- or in default to undergo simple imprisonment for 3 months. The appeal against the conviction and sentence is pending as aforesaid, before the VIth Additional Metropolitan Sessions Judge, Secunderabad.
3. At that stage, it appears that some interlocutory applications were filed by the appellants in the trial Court and the said applications were dismissed. Against the said order, a revision case No. 91/2000 was filed in the High Court and it was also dismissed. This appeal has been preferred against the said order passed by the High Court in the interlocutory proceedings.
4. During the pendency of the case, there appears to be a settlement of the money-dispute between the parties. On 24.8.2000 this Court passed an order as follows :
“Learned counsel for the petitioners states that the petitioners would deposit the cheque amount (Rs. 5,96,688/-) which was dishonoured within three weeks from today before the XV Metropolitan Magistrate, Hyderabad. In this view of the matter, stand over for three weeks. Application for substituting the name of Mr. S.C. Agrawal as Managing Director of the petitioner No. 1’s firm in place of Mr. Piyus Agrawal, Managing Director is allowed”.
It appears, subsequent to the said order, the appellant has deposited a sum of Rs. 5,96,688/- in the Court of the XV Metropolitan Magistrate, Hyderabad. A Certificate to that effect issued by the said Court has been filed by the counsel for the petitioners, in this Court.
5. In the light of the subsequent developments in the case, we are of the view that the order passed in the Interlocutory application be set aside and the matter be remitted to the Appellate Court where the appeal is pending. We order accordingly.
6. The appellate Court will consider the subsequent events, namely, of the appellant having paid a sum of Rs. 5,976,688/- under a settlement to the 1st respondent and will dispose of the appeal in accordance with law. On merits, it will be open even to set aside the conviction in accordance with law. Otherwise, it has power to convict or direct sentence of imprisonment or fine. The appellate Court can therefore take the subsequent events into account and pass such order as it may deem fit in the appeal. Under Section 138 the Court can, if it is inclined to convict, pass an order of imprisonment or even fine.
7. The impugned order passed by the High Court in the present interlocutory proceedings is set aside and the matter is remanded to the Appellate Court, namely the VIth Additional Metropolitan Sessions Judge, Secunderabad, as stated above.
8. We also record the statement of the learned counsel for the respondent that if the amount deposited is permitted to be withdrawn by the first respondent, then the 1st respondent will not press before the Appellate Court for a conviction or for a sentence be it for imprisonment or fine. In such circumstances, the Appellate Court will consider whether the conviction is to be maintained or an order of imposition of fine is to be passed, in the light of the stand taken by the counsel for the 1st respondent.
9. We direct the Court in which the deposit has been made, to allow the 1st respondent to withdraw the amount accordingly. With the above directions the appeal is disposed of.
Order accordingly
(C.R.)