2019 (4) TMI 1248 - HC - Indian Laws

Dishonor of cheque - liability of accused/petitioners to pay 20% or less of the cheque amount to the complainant - Retrospective effect of amendments in the act u/s 143-A and Section 148 of the Act - only challenge raised by the respective petitioners, in all these petitions, is that since the Amendment Act has been enforced with effect from 02.08.2018, therefore, these provisions cannot be made applicable to the cases, where the trials for offence under Section 138 of the Act were already pending or where the appeals have arisen from such trials, which were pending on the date of the enforcement of these provisions. HELD THAT - It is clear that the dispute between the parties is relating to the applicability of Section 143-A and Section 148 of the Act, introduced vide Amendment dated 02.08.2018, to the cases which were already pending at the stage of the trial; or to the appeals arising from such trials, whether filed before or after the enforcement of the above-said provisions. Another significant aspect to be noted is that the Amendment Act has not specifically made the amendment to be applicable retrospectively. The notification of the amendment also does not specify any other date for the amendment to come in operation. In such a situation, Section 5 of the General Clauses Act would be of some help. This Court finds that all substantive laws have to be prospective in nature and applicability; unless prescribed to be retrospective, whereas all procedural laws have to be applicable to all cases immediately on their coming into operation, including the pending cases. Whether the provisions contained in Section 143-A and Section 148 of the Act are substantive in nature or the procedural one? - HELD THAT - 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 existence or which relates to his being, belongings or the estates. Such rights can be human rights, constitutional rights or statutory rights. Such substantive rights can have variety of facets; depending upon the factual situation in which such right is to be considered. The substantive rights can be governed by the constitutional or statutory provisions. The statutory provisions created by the competent legislature can prescribed certain conditions for crystallizing the substantive right of the person. In such a situation, once the conditions prescribed for crystallizing such right are fulfilled, such substantive right of a person becomes vested right as well. So all substantive rights are not vested rights but all vested rights are substantive rights. A law which essentially deals with forums of adjudication, procedure of adjudication and the mechanism for enforcement of result of such an adjudication, would essentially be procedural in nature. All rights granted by procedural law would be only procedural rights. As a corollary to this, no procedural right can be either substantive or vested right. This Court does not find any substance in argument of learned counsel for the petitioners that since the object and reasons for introducing the amendment relate to giving benefit to the complainant and do not relate to the procedure of the appeal, therefore, it cannot be treated to be a procedural step. All the petitions, wherein the order of the Trial Courts, directing the accused to deposit up to 20% of the cheque amount as interim compensation; are challenged, are allowed.

Summary

Issues Involved:
1. Applicability of Section 143-A of the Negotiable Instruments Act to pending trials.
2. Applicability of Section 148 of the Negotiable Instruments Act to pending appeals.

Detailed Analysis:

Issue 1: Applicability of Section 143-A to Pending Trials

Arguments by Petitioners:
- Petitioners argued that Section 143-A, which imposes an obligation on the accused to pay interim compensation, is substantive and cannot be applied retrospectively to pending cases. They cited various judgments to support that laws imposing new obligations cannot be applied to ongoing cases unless explicitly stated.

Court's Analysis:
- The court examined whether Section 143-A is substantive or procedural. It noted that Section 143-A imposes a substantive obligation on the accused to pay interim compensation, recoverable under Section 421 of Cr.P.C., which can lead to attachment and sale of properties.
- The court emphasized that this section creates a new liability, affecting the substantive rights of the accused. Since the amendment does not explicitly state retrospective application, it cannot be applied to pending trials.
- The court highlighted that Section 143-A does not streamline trial procedures but imposes a standalone liability, making it substantive rather than procedural.

Conclusion:
- Section 143-A of the Act is substantive and cannot be applied retrospectively to pending trials. The orders of the Trial Courts directing the accused to deposit interim compensation are set aside.

Issue 2: Applicability of Section 148 to Pending Appeals

Arguments by Petitioners:
- Petitioners argued that Section 148, which requires the appellant to deposit a minimum of 20% of the fine or compensation during the appeal, is substantive and should not apply to pending appeals. They contended that this provision imposes a new obligation, affecting their rights.

Court's Analysis:
- The court distinguished between substantive rights and procedural mechanisms. It noted that while the right to appeal is substantive, the procedures governing appeals, including conditions for suspension of sentence, are procedural.
- The court observed that Section 148 does not affect the appellant's substantive right to defend or prosecute the appeal. It provides for the return of deposited amounts with interest if the appellant is acquitted.
- The court emphasized that the provision of Section 148 modifies the existing procedure for recovery of fines under Sections 421 and 424 of Cr.P.C., making it more favorable to the appellant by allowing partial deposits.
- The court concluded that Section 148 is procedural and applies to all pending appeals, as it does not impose new substantive obligations but modifies the existing recovery procedure.

Conclusion:
- Section 148 of the Act is procedural and applies to all pending appeals. The orders of the Appellate Courts directing the deposit of 20% or more of the fine or compensation are upheld.

Final Orders:
- Petitions challenging the orders under Section 143-A are allowed, and the respective orders are set aside.
- Petitions challenging the orders under Section 148 are dismissed, and the respective orders are upheld.

Directive:
- The Registrar General is directed to ensure that a copy of this judgment is sent to all judicial officers in Punjab, Haryana, and U.T. Chandigarh dealing with cases under the Negotiable Instruments Act, 1881, to prevent unnecessary litigation.