2024 (1) TMI 328 - SC - Indian Laws

Persistent disregard for judicial directives and a lackadaisical approach to legal and financial obligations - High Court took a firm stance against the appellant s continued failure to fulfil his financial obligations, culminating in the cancellation of his bail and suspension of sentence - HELD THAT - The complainant was entitled to receive a total amount of Rs. 4,63,50,000/-. The undertaking as also the order dated 03.07.2018 clearly mention that both of them will pay the amount equally as agreed by and between them and it further contains a stipulation that in default of the payment by either of them as per their agreed share in the settlement, they shall be held liable and prosecuted as per law. The settlement between the two directors i.e. the appellant and the intervenor is inter se these two only and the complainant is not bound by the same. Complainant s agreement or consent was only to the extent of accepting Rs. 4,63,50,000/- only. He was not a signatory to the agreement which was signed by the two parties. Admittedly, both the appellant and the intervenor were Chairman and Vice-Chairman of the company AGPL and, therefore, were convicted by the Trial Court and their conviction was affirmed by the Appellate Court. There are no illegality in the order passed by the High Court. The appeal is accordingly dismissed with costs quantified at Rs. 5 lakhs to be paid to the respondent No. 2 (Complainant) within four weeks from today. It is clarified that this amount of costs will not be adjusted against the compensation awarded to the respondent No.2 but will be in addition to it.

Summary

Issues involved:
The judgment addresses non-compliance with financial obligations and court orders, cancellation of bail and suspension of sentence, interpretation of settlement terms, and liability for outstanding amounts.

Non-Compliance and Cancellation of Bail:
The Supreme Court discussed the persistent disregard for judicial directives and financial obligations by the appellant, leading to the cancellation of bail and suspension of sentence by the High Court. The appellant and an intervenor were convicted under the Negotiable Instruments Act, with a total liability of Rs. 5 crores. Despite payment schedules and extensions granted by the High Court, the appellant failed to fulfill the agreed amounts, resulting in the cancellation of bail and suspension of sentence.

Interpretation of Settlement Terms:
The settlement agreement between the appellant and the intervenor specified a total payment of Rs. 4,63,50,000 to the complainant, to be equally shared. Disputes arose regarding the actual amounts paid by each party, with the intervenor claiming a 40% liability and the appellant 60%. The High Court observed discrepancies in the payment distribution and emphasized that the total agreed amount had not been fulfilled, leading to the withdrawal of bail and suspension of sentence.

Liability for Outstanding Amounts:
The intervenor argued that the appellant altered the settlement terms from proportional sharing to equal payment, causing confusion and non-compliance. The Court highlighted that the complainant was only entitled to the agreed amount of Rs. 4,63,50,000, irrespective of the internal distribution between the appellant and the intervenor. Emphasizing the failure to pay the agreed sum, the Court upheld the High Court's decision to cancel bail and suspend the sentence, dismissing the appeal and directing the parties to surrender for sentence execution.