Case Name: Muskan Enterprises & Anr. v. The State of Punjab & Anr.
Case Number: Criminal Appeal No. 5491 of 2024
Date: December 19, 2024
Quorum: Justice Dipankar Datta
FACTS OF THE CASE
The appellant Muskan Enterprises and the proprietor were convicted by the Judicial Magistrate Amloh under Section 138 of the Negotiable Instruments Act in 1881 for a dishonored cheque. Both were sentenced to two years of rigorous imprisonment and ordered to pay compensation of ₹70,00,000, which is twice the value of the cheque. The appeal from the conviction rested with the Sessions Court, which stayed the sentence, but directed a deposit of 20% of the compensation amount under Section 148 of N.I. Act. The appellants assailed upon this condition with a petition under Section 482 of the Code of Criminal Procedure, 1973, which they later had to withdraw when they could not procure the sought relief because of existing interpretations of Section 148. However, in the following times when the case of Jamboo Bhandari vs. M.P. State Industrial Development Corporation clarified that Section 148 is discretionary in nature, the appellants re-presented the appeal. This second presentation was turned down by the High Court on the ground that re-application was rejected after the initial application was withdrawn.
ISSUE OF THE CASE
- Whether the decision of the High Court in dismissing the second Section 482 Cr.P.C. petition on procedural grounds was correct?
- Whether the discretion given to the appellant court under Section 148 of the N.I. Act had been correctly understood?
LEGAL PROVISIONS
- Section 138 of the Negotiable Instruments Act deals with punishments for dishonor of the cheque due to insufficient funds.
- Section 148 of the Negotiable Instruments Act enables the appellate courts to direct the deposit of at least 20% of the compensation or fine awarded by the trial court during the pendency of an appeal.
- Section 482 of the Criminal Procedure Code confers the heading on the power of the High Court to prevent abuse of process or to bring in justice.
ARGUMENTS
Arguments of the Appellant:
The appellants, therefore, argued that there was a legitimate reason to file the subsequent petition under Section 482 of the Criminal Procedure Code: after Jamboo Bhandari, the legal position changed. According to them, Section 148 of the N.I. Act grants a right to the appellate courts to grant a deposit order according to their discretion, which is contrary to the High Court’s earlier interpretation. Therefore, the petition aimed at obtaining the application of different clarified legal positions in their favor.
Arguments by the Respondent:
The respondents asserted that the High Court acted correctly in dismissing the subsequent petition. They argued that allowing a second petition would be an abuse of process, especially where the appellants withdrew their first petition without first reserving their right to seek a second petition.
ANALYSIS
The Supreme Court reviewed the case Surinder Singh Deswal v. Jamboo Bhandari. The bench agreed that if on the one hand Surinder Singh Deswal endorsed the deposit requirement as being mandatory, on the other, Jamboo Bhandari vested the appellate courts with some degree of discretion in extraordinary situations.
The Court observed that procedural niceties, like the failure to obtain express leave to refile, should not come into the way of substantive justice particularly when the interpretations of acts and rules have largely changed. Further, Section 148 uses both may and shall to make a distinction between one invoking discretion and one invoking obligation, thus indicating a deliberate legislative intent to leave some degree of understanding to exceptional situations.
JUDGEMENT
The Supreme Court overturned the order of the High Court dismissing the appeal and ordered the Sessions Court to reconsider the question of deposit. It stated that before imposing or waiving the condition of deposit, the appellate court should take into account the special facts and circumstances of the case. The judgment reiterated that, while the general practice of the appellate courts should be in favor of deposit, in any case, if such an exercise was necessary, the discretion to waive deposit in exceptional cases shall always rest.
CONCLUSION
This judgment reinforces the nuanced interpretation of Section 148 NI Act, balancing the interests of complainants and appellants. By conferring discretion on the appellate courts, it insulates against procedural rigidity and allows for fact-sensitive justice. The decision is an important precedent for NI Act appellate cases as it grants relief to appellants only in genuinely exceptional circumstances while at the same time safeguarding the rights of the complainants.
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WRITTEN BY SAGORIKA MUKHERJEE
