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Indian Laws - Case Laws
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2023 (9) TMI 1082
Constitutional validity of The Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013 - Tax (Cess) versus Fee - Concurrent power of Central Government and State Government to legislate - whether the impugned Act, in pith and substance, relates to the fields enumerated in Entries 6, 14, 17, 18, 21 and 25 of List II, Seventh Schedule to the Constitution or whether the same relates to the field of “environment” or “environmental pollution”, which, according to the petitioners, is not covered by any of the fields in Lists II and III, Seventh Schedule to the Constitution but falls exclusively within the residuary Entry i.e. Entry 97 of List I of the Seventh Schedule to the Constitution?
HELD THAT:- Since the levy and the object of the levy is to augment resources to reduce the carbon footprint generated by the petitioners involved in handling etc. specified products and substances, the impugned Act has a direct nexus with subjects like public health, sanitation, water, gas or land. Greater effective means to combat increased carbon footprint or even disincentivising increased carbon footprint would clearly promote public health. The entries in the State list cannot be narrowly or pedantically construed. They have to be liberally and generously construed. Upon their meaningful construction, it would be difficult to agree with the Petitioner’s argument that in pith and substance, the impugned Act is an enactment not “with respect to” the entries in the State List.
The Constitution Bench in State of West Bengal V/s. Kesoram Industries Ltd. & Ors. [2004 (1) TMI 71 - SUPREME COURT], held that ample authority is available for the concept that under Entry 49 in List II the land remains a land without regard to the use to which it is being subjected. It is open for the Legislature to ignore the nature of the user and tax the land. At the same time, it is also permissible to identify, for the purpose of classification, the land by reference to its user.
In pith and substance, the impugned Act imposes a levy upon the handling or consumption or utilization or combustion or movement or transportation of certain products and substances, including hazardous substances, which upon their handling or consumption or utilization or combustion or movement or transportation causes pollution of the lithosphere, atmosphere, biosphere, hydrosphere and other environmental resources of the State of Goa.
Environment of Environment Pollution - Fields relatable exclusively to Residuary Entry 97, Union List? - HELD THAT:- The Court held that in a Federal Constitution like ours where there is a division of legislative subjects, but the residuary power is vested in Parliament, such residuary power cannot be so expansively interpreted, as to whittle down the power of the State legislature. The Court held that that might affect and jeopardize the very federal principle. The federal nature of the Constitution demands that an interpretation which would allow the exercise of legislative power by Parliament pursuant to the residuary powers vested in it to trench upon State legislation and which would thereby destroy or belittle state autonomy must be rejected.
Therefore, unless a clear case of the all-important field or subject of environment or environmental pollution being left out from the entries in the lists is made out, it would be quite unsafe to read this field or subject in the residuary entry. This would not be the appropriate manner of construing the legislative entries. Such a manner of interpretation would run counter to several decisions of the Hon’ble Supreme Court on the question of interpretation of such entries.
Is the impugned act a hybrid legislation? - HELD THAT:- There is no warrant for the broad proposition that all issues relatable to “air pollution” necessarily fall within the residuary Entry 97 of List I. In any case, since the impugned Act is aimed at augmenting the State’s revenues for having programmes and schemes to reduce the carbon footprint or since the impugned Act imposes a levy on the handling or consumption or, utilization or combustion or, movement or transportation of products and substance, which upon their handling, etc. causes pollution of the lithosphere, atmosphere, biosphere, hydrosphere and other environmental resources of the State of Goa, the same legitimately relates to the domain covered by Entry 6, 14, 17, 18, 21 and 25, particularly since these entries have to be construed liberally and broadly and not pedantically.
Once any legislation is found to substantially relate to the entries in the State or Concurrent lists, even some incidental or marginal overlap is of no consequence. In any case, once a field or subject is found to be reasonably related to the entries in the State or Concurrent lists, the Courts must be slow to place such fields or subjects in the residuary entry 97 of the Union list. “Residuary” typically means what is left out.
Clean Energy Cess - HELD THAT:- The clean energy cess, which is nothing but an excise duty, was imposed by the Parliament because the subject of “environment” or “environmental pollution” relates to the residuary Entry 97 of List I. Instead, it is clear that the levy is an excise duty and in 2010, the Parliament had legislative competence to impose such excise duty or a cess which is nothing but an increment on the excise duty. Since the petitioners point out that such levy covered imported goods as well, the levy could also be said to relate to Entry 83 of List I dealing with duties of customs, including export duties.
In any case, what is important is that the clean energy cess imposed by the Finance Act of 2010 can neither be cited as an instance where the Parliament legislated on the subject of “environment” or “environmental pollution” by relying on residuary Entry 97 in List I nor can it be said that the finance Act 2010 to the extent it imposes clean energy cess covers the field relating to the subject matter of the impugned Act.
Double Taxation - HELD THAT:- In AVINDER SINGH VERSUS STATE OF PUNJAB [1978 (9) TMI 171 - SUPREME COURT] the Hon’ble Supreme Court rejected the feeble plea that the levy was bad because of the vice of the double taxation or that the impost was unreasonable because there were heavy prior levies. The Court held that some of these contentions hardly merit consideration but have been mentioned out of courtesy to the counsel. The Court pointed out that there was nothing in Article 265 of the Constitution from which one could spin out the constitutional vice called double taxation.
Arguments based on Article 253, EPA, Air Pollution Act, NGT Act and Occupied Field - HELD THAT:- Several Constitution Bench of the Hon’ble Supreme Court have held that where more than one interpretation is possible or plausible, the interpretation that favours federalism of power and the supremacy of the State within its own sphere must be preferred, and the one that derogates from the same must be eschewed. For all the above reasons, it is found difficult to agree with the Petitioner’s arguments based upon Article 253 and the three Parliamentary legislations.
The Tax versus Fee argument - HELD THAT:- The learned Advocate General did contend that the State is entitled to defend the impugned Act on the basis that the levy was a tax relatable to Entry 49 List Il, Seventh Schedule to the Constitution. He cited some decisions in support of this contention. However, now that it is concluded that the levy imposed by the impugned Act is a fee and that the State had sufficient legislative competence to enact the impugned Act, it is not proposed to examine the issue as to whether the impugned levy can be justified as a "tax" relatable to Entry 49 List Il, Seventh Schedule to the Constitution.
Petition dismissed.
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2023 (9) TMI 1055
Dishonour of cheque - legal and enforceable liability or not - failure to rebut the presumption under Section 139 of the N.I. Act - HELD THAT:- In view of the overwhelming evidence produced at record by the accused-petitioners, their conviction on the part of the Trial Court and upholding of the same by the Appellate Court is absolutely unjustified. No doubt, presumption under Section 139 of the N.I. Act was available in favour of the complainant once the signatures on the cheques were admitted and that the cheques were issued for a legal and enforceable debt or liability, but the accused-petitioners were justified in their action of stopping the payment, inasmuch as the cheques were issued towards salary for the period, for which the complainant did not serve the company of the accused-petitioners and rather, served another company Skylark Securities Pvt. Ltd. Besides, complainant was found to have embezzled the amount payable for the salary of the guards regarding which FIR Ex.D2 was lodged against him.
The impugned judgment of conviction and order of sentence as recorded by the Courts below are set aside. The petitioners stand acquitted of the charges. The present revision petition is hereby allowed.
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2023 (9) TMI 859
Dishonour of Cheque - money lending business - whether a person can be debarred from filing and prosecuting complaint under section 138 of the Act if he is doing business of money lending without holding a valid licence and whether there is apparent conflict between section 3 of Punjab Registration of Money Lenders Act, 1938 and section 138 of the Act?
HELD THAT:- The Delhi Court in DHANJIT SINGH NANDA VERSUS STATE & ANR. [2009 (2) TMI 852 - DELHI HIGH COURT] rejected the argument that the complainant is debarred from recovering loan amount as he is not a registered money lender.
This court in Guddo Devi @ Guddi V Bhupender Kumar [2020 (2) TMI 676 - DELHI HIGH COURT] observed that there is no material to conclude that the respondent was carrying on the business of advancing loans. Merely because the respondent had lent money to three or four persons, did not lead to the inference that the respondent had been carrying out the activity of money lending as a business.
It is acceptable proposition of law that section 3 of Punjab Registration of Money Lenders Act, 1938 does not limit operation of section 138 of the Act and both are independent and mutually exclusive to each other. If a person advances a loan even without having a valid money lending licence or certificate he can institute and prosecute complaint under section 138 of the Act on basis of cheques and he has to satisfy only the mandatory requirements of section 138 of the Act.
The trial court dismissed the complaints at pre-trial stage without giving an opportunity to the petitioner to lead evidence. The IN RE : EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138 OF N.I. ACT 1881. [2021 (4) TMI 702 - SUPREME COURT]as argued and cited by the counsel for the petitioner has held that Section 258 of Cr. P.C. is not applicable to a summons case instituted on a complaint and as such section 258 Cr. P.C does not have any role to play in respect of the complaints filed under Section 138 of the Act. The trial court is not vested with inherent power either to review or recall the order of issuance of process.
Petition allowed.
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2023 (9) TMI 707
infringement of copyright and passing-off - Claiming permanent injunction restraining the respondent from infringing copyright in its artistic label - prayer for a decree of injunction restraining the respondent from manufacturing, selling, offering for sale, advertising, or otherwise dealing in country liquor having the appellant’s trade mark label - HELD THAT:- For establishing goodwill of the product, it was necessary for the appellant to prove not only the figures of sale of the product but also the expenditure incurred on promotion and advertisement of the product. Prima facie, there is no evidence on this aspect. While deciding an application for a temporary injunction in a suit for passing-off action, in a given case, the statements of accounts signed by the Chartered Accountant of the plaintiff indicating the expenses incurred on advertisement and promotion and figures of sales may constitute a material which can be considered for examining whether a prima facie case was made out by the appellant-plaintiff. However, at the time of the final hearing of the suit, the figures must be proved in a manner known to law - Even assuming that the allegation of deceptive similarity in the labels used by the respondent was established by the appellant, one of the three elements which the appellant was required to prove, has not been proved. Therefore, we find that the High Court was justified in staying that particular part of the decree of the Trial Court by which injunction was granted for the action of passing-off.
Infringement of copyright - HELD THAT:- In the facts of the case, it appears that when permission was sought by the respondent to use the impugned labels, the appellant raised objections in writing to the grant of permission to the respondent to use the said labels. It is not as if those objections were not pursued, but there was a positive act on the part of the appellant of withdrawing the said objections by submitting the letters of withdrawal in which, admittedly, it was not mentioned that the withdrawal was conditional. This important factual aspect supports the order of stay granted by the High Court as regards the decree in respect of the infringement of copyright. The objections were withdrawn on 25th April 2016 and the suit was filed on 4th October 2017. A prima facie case of acquiescence by the appellant was made out by the respondent.
There is a huge pendency of suits in the Trial Courts in the State of Maharashtra. If the members of the Bar do not cooperate with the Trial Courts, it will be very difficult for our Courts to deal with the huge arrears. While a trial is being conducted, the members of the Bar are expected to act as officers of the Court. They are expected to conduct themselves in a reasonable and fair manner. The members of the Bar must remember that fairness is a hallmark of great advocacy. If the advocates start objecting to every question asked in the cross-examination, the trial cannot go on smoothly. The trial gets delayed. In the facts of the case, looking at the persistent objections raised by the learned advocate, the Court was required to record a substantial part of the cross-examination in question and answer form which consumed a lot of time of the Court.
The High Court was justified in granting the order of stay pending the final disposal of the appeal. The appeal is, accordingly, dismissed.
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2023 (9) TMI 706
Dishonour of Cheque - legally enforceable debt or not - validity of cheque - cheques in question signed by only one Director of M/s Shalini Securities Private Limited - under what circumstances Amandeep Singh had issued the cheques in question in favour of Lokesh Thakkar particularly when he had resigned as Director from the M/s Shalini Securities Private Limited in the year 2012? - HELD THAT:- M/s Shalini Securities Private Limited and Amandeep Singh at this stage cannot be allowed to take advantage of their acts committed by issuance of the cheques in question in favour of Lokesh Thakkar. Lokesh Thakkar is appearing to be the holder of cheques in question and is entitled for presumption under section 139 of NI Act. It is for M/s Shalini Securities Private Limited to establish on record by leading probable defence that the cheques in question were not issued towards discharge of legally enforceable debt and are not valid instruments in the eyes of law as Amandeep Singh was not having any authority to sign and issue the cheques in question. The issues raised in the present complaint require evidence and cannot be decided in the present petitions.
The counsel for M/s Shalini Securities Private Limited referred the judgment passed by the Supreme Court in MRS. ANITA MALHOTRA VERSUS APPAREL EXPORT PROMOTION COUNCIL (APPAREL EXPORT PROMOTION COUNCIL) [2011 (11) TMI 532 - SUPREME COURT] wherein it was observed that the criminal proceedings for the dishonour of the cheques in question against the non-executive ex-Director who has resigned from the company six years back are liable to be quashed. However, in the present case, the cheques in question were issued by Amandeep Singh from the account of M/s Shalini Securities Private Limited. The issue whether there is any liability against M/s Shalini Securities Private Limited and Amandeep Singh qua the cheques in question can only be decided by evidence during the trial.
The present petitions are dismissed with the cost of Rs. 25,000/- (Rupees Twenty Five Thousand only) each on M/s Shalini Securities Private Limited and Amandeep Singh which is to be paid to Lokesh Thakkar before the trial court on the next date of hearing.
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2023 (9) TMI 705
Dishonour of Cheque - existence of legally recoverable debt or liability - non-reporting of giving of cheques in question as security for transaction of sale of plot - HELD THAT:- Under Section 397 of the Cr.P.C, the Court is vested with the power to call for and examine the record of any inferior Court for the purpose of satisfying itself as to legality and regularity of any proceedings or order made in a case. The object of this provision is to correct the patent defect or an error of jurisdiction or the perversity which has crept in the proceedings.
The High Court, in revision, exercises supervisory jurisdiction of a restricted nature. It cannot re-appreciate the evidence, as Second Appellate Court, for the purposes of determining whether the concurrent finding of fact reached by the learned Magistrate and the learned Additional Sessions Judge was correct.
The Supreme Court BHARAT BARREL & DRUM MANUFACTURING COMPANY VERSUS AMIN CHAND PAYRELAL [1999 (2) TMI 627 - SUPREME COURT], held that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration.
The accused has failed to establish his defence even on preponderance of probability, therefore, there was no occasion to shift onus of proof on the complainant to establish existence of legally recoverable debt or liability. Manoj Kushwaha (PW-1), Hotam Singh (PW-2) and Amrit Lal Kushwaha (CW-1) also stated about availability of funds sufficient to advance the loan, therefore, considering the statutory presumption in favour of holder of cheque absence of documentary evidence to establish financial capacity of the complainant is immaterial.
In opinion of this Court, no patent illegality, perversity or impropriety is made out in the concurrent finding of conviction by learned Trial Court and the First Appellate Court. The sentence imposed by learned trial Court and affirmed by the First Appellate Court is proper and appropriate. Consequently, no interference in concurrent finding of conviction of petitioner for offence punishable under Section 138 of the Negotiable Instruments Act and sentence imposed, is called for in exercise of revisional jurisdiction.
Revision petition dismissed.
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2023 (9) TMI 704
Dishonour of Cheque - territorial jurisdiction - whether an inquiry under Section 202 of the Code of Criminal Procedure is mandatory before issuance of process in a complaint under Section 138 read with Section 141 of the Negotiable Instruments Act when the accused resides outside the territorial jurisdiction of the learned Chief Judicial Magistrate at Kolkata? - HELD THAT:- This Court has already held that Section 202 of the Cr.P.C was introduced in the statute book in order to prevent lodging of false complaint only to cause harassment of innocent persons who reside outside the jurisdiction of the court of the learned Magistrate. When the learned Magistrate on scrutiny of record prima facie came to a decision that process ought to have been issued even against a person who resides outside the jurisdiction of the court of the learned Magistrate and passed an order under Section 204 of the Cr.P.C, it is obvious that the learned Magistrate also took into account the provision under Section 202 of the Cr.P.C.
In SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [2005 (9) TMI 304 - SUPREME COURT], the Hon’ble Supreme Court while construing the provision of Section 141 of the N.I Act, 1881, has noted that the position of a Managing Director or a Joint Managing Director of the company is distinct since persons occupying that position are in charge of and responsible for the conduct of the day to day business of the company. It was observed that though there is a general presumption that the Managing Director and Joint Managing Director are responsible for the act of the company, the director will not be held liable if he was not responsible for the criminal conduct of the company at the time of the commission of offence.
Now to conclude, it is found from the record that the petitioner was arraigned as an accused in the aforementioned cases under Section 138 read with Section 141 of the N.I Act on the ground that he at the relevant point of time was the Managing Director of the company. Secondly, in the petition of complaint it was not stated that the petitioner resides outside the jurisdiction of the learned Magistrate. Thirdly, while issuing process the learned Magistrate adverted to the petition of complaint, evidence of the complainant affirmed under Section 145(1) of the N.I Act and the documents filed by the complainant.
Thus, before issuance of process, the learned Magistrate obviously came to the conclusion that there are prima facie reasons to issue process against the petitioner and lastly, if the impugned order prima facie proves application of mind by the learned Magistrate in respect of compliance of mandatory provision under Section 202 of the Cr.P.C, the order cannot be set aside only on technical ground for absence of the magic words that inquiry under Section 202 was held and the learned Magistrate was satisfied that process should be issued against the accused.
There are no merit in these bunches of criminal revision and accordingly the revisional applications are set aside.
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2023 (9) TMI 703
Dishonour of Cheque - legally enforceable debt or not - present complaint filed only with the sole motive to extort money from the petitioners without any legally enforceable debt against them - respondent had not mentioned or enclosed any document or agreement against which the alleged loan was tendered to the petitioner - HELD THAT:- It is apparent that cheques bearing no 997642 which is basis of present complaint is dated 01.06.2018 while the petitioner no 1 through the petitioner no 2 intimated its banker vide letter dated 27.09.2014 to stop any payment against these cheques and made a complaint to the SHO, Police Station Mehrauli, New Delhi on 27.9.2014 vide NCR No. 1361/2014 dated 01.10.2014 i.e. much prior from alleged dates of issuance of cheque bearing no 997642. However plea of the petitioners that cheque bearing no 997642 which is basis of present complaint was lost in year 2014 much prior to issuance of the cheque in favour of the respondent no 2 can only be established during trial and on basis of the evidence to be led by the petitioners and the respondent no 2.
The proposed defence of the petitioners as detailed cannot be legally considered at time of taking cognizance by the trial court which is obliged to take cognizance merely on basis of allegations as made in complaint and pre summoning evidence if any.
On the basis of pleas as taken in the present petition and arguments advanced by the learned Senior Counsel for the petitioners, the summoning order dated 23.10.2018 cannot be recalled. The petition is devoid of any merit - Petition dismissed.
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2023 (9) TMI 702
Validity of Look-Out Circulars (LOC) issued - cognizable offences or not - curtailing a person's fundamental right to travel under Article 21 - HELD THAT:- Sub-section (6) of Section 212 provides that notwithstanding anything contained in the Code of Criminal Procedure, an offence covered under section 447 of the 2013 Act (which we have also discussed above) shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless the Public Prosecutor has been given an opportunity to oppose the application for such release and where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.
In the present case, as rightly pointed by learned counsel for the petitioners, the stage of investigation within the contemplation of Section 212(1) – (4) of the 2013 Act is not yet over. Thus, as of today, whatever may the allegations against the petitioners or the Company of which they were Directors and guarantors, the same cannot tantamount to a cognizable offence against the petitioners.
Insofar as classification of an account as fraud is concerned, the same was disclosed only subsequently and does not find place in the SFIO request to the Immigration Authority for issuance of LOC.
Whether the high ground of issuance of LOC has been made out at all by the SFIO in its request for issuance of LOC? - HELD THAT:- It has to be kept in mind that the high grounds which are required to be made out for restraining the personal liberty of a person as guaranteed under Article 21 of the Constitution and the right of a person to move within the country under Article 19, a necessary corollary of which is the right to travel abroad, have to be on a much elevated footing than mere pendency of an investigation or allegations of financial frauds against the concerned person - mere paranoia of the authorities whenever a person against whom allegations are levelled seeks to leave the country cannot be sufficient for issuance of LOCs and curtailing the person‟s personal liberty to travel abroad.
No ground has been made out for issuance of LOC against the petitioners and/or restricting them from travelling abroad. - Petition allowed.
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2023 (9) TMI 634
Misappropriation of Fixed Deposits (FDs) furnished as security by RFL and its group companies - Criminal liability of a company - HELD THAT:- The criminal liability of the individuals now attributed to DBS are actions of (1) Anjani Kumar Verma, (2) S. Venkatesh, (3) Pradeep Kumar and (4) Parthsarathi Mukherjee. They were all officials of LVB. Their individual responsibility and accountability in criminal law, is and remains unaffected by the amalgamation. Therefore, there is in fact, no involvement of DBS Bank, revealed in the charge sheet filed by the Delhi Police. In completely ignoring these aspects and proceeding on a rather superficial basis, the High Court, in our considered opinion fell into error.
There is no gainsaying that the power to quash a criminal investigation or proceedings should not be lightly exercised. Yet, to refuse recourse to that power, in cases that require or may demand it, is being blind to justice, which the courts can scant afford to be. In the present context, the public’s confidence in the banking industry was at stake, when RBI stepped in, imposed the moratorium and asked DBS to take over the entire functioning, management assets and liabilities of the erstwhile LVB. To permit prosecution of DBS for the acts of LVB officials (who are in fact, facing criminal charges) would result in travesty of justice.
The impugned judgment is accordingly set aside; the appeal by DBS is allowed.
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2023 (9) TMI 633
Dishonour of Cheque - inquiry under Section 202 of the Code of Criminal Procedure, 1973 not held - respondent was having its office outside the jurisdiction of the Court of the learned Magistrate - HELD THAT:- The Trial Court is directed to proceed from the stage of Section 202 of the CRPC. While doing so, the learned Magistrate will be guided by the direction issued by the Constitution Bench which says that For the conduct of inquiry under Section 202 of the Code, evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses.
Appeal allowed in part.
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2023 (9) TMI 560
Dishonour of Cheque - grant of relief subject to condition of appellants depositing 20% of the amount of compensation - HELD THAT:- When an accused applies under Section 389 of the Cr.P.C. for suspension of sentence, he normally applies for grant of relief of suspension of sentence without any condition. Therefore, when a blanket order is sought by the appellants, the Court has to consider whether the case falls in exception or not.
In these cases, both the Sessions Courts and the High Court have proceeded on the erroneous premise that deposit of minimum 20% amount is an absolute rule which does not accommodate any exception - The learned counsel appearing for the appellants, at this stage, states that the appellants have deposited 20% of the compensation amount. However, this is the matter to be examined by the High Court.
The impugned orders of the High Court set aside - the revision petitions filed by the appellants before the High Court restored - appeal allowed.
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2023 (9) TMI 510
Seeking grant of anticipatory bail - HELD THAT:- Although a counter affidavit has been filed, nothing has come to light which may persuade this Court to take a view, different from the view taken while passing the aforesaid order, nor the learned A.G.A. has pointed out violation of any of the conditions of interim anticipatory bail committed by the applicant.
Application allowed.
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2023 (9) TMI 444
Dishonour of Cheque - jurisdiction to entertain a complaint - cheque was presented for collection through State Bank of India, Chennithala branch, Alappuzha District, within the jurisdiction of Judicial First Class Magistrate Court-1, Chengannur - complainant at present residing within the jurisdiction of Chengannur Court - Section 142(2)(a) or (b) of the NI Act.
When the payee or holder in due course presents a cheque through an account maintained by the payee or holder in due course in a bank within the jurisdiction of a court, whether the court, where the cheque was presented for collection, has jurisdiction to entertain the complaint, alleging commission of offence under Section 138 of the NI Act?
HELD THAT:- As per the decision in Dashrath Rupsingh Rathod v. State of Maharashtra and Anr. reported in [2014 (8) TMI 417 - SUPREME COURT], the Apex Court, while overruling the ratio of the decision in K.Bhaskaran v. Sankaran Vaidhyan Balan reported in [1999 (9) TMI 941 - SUPREME COURT], held An interpretation should not be imparted to S.138 which will render it as a device of harassment i.e. by sending notices from a place which has no casual connection with the transaction itself, and/or by presenting the cheque(s) at any of the banks where the payee may have an account.
Indubitably, Section 142 of the NI Act was amended and Section 142-A was introduced with effect from 15.06.2015, to clarify the jurisdictional issue and to address the crisis of transfer of cases as per the ratio in Dashrath Rupsingh’s case [2014 (8) TMI 417 - SUPREME COURT].
The word ‘delivered’ used in Section 142(2)(a) of the NI Act has no significance and significance must be given to the text ‘for collection through an account’. That is to say, delivery of the cheque takes place where the cheque was issued and presentation of the cheque will be through the account of the payee or holder in due course, and the said place is decisive to determine the question of jurisdiction. Therefore, challenge raised by the learned counsel for the petitioners referring definition of the word ‘delivered’ contemplated under Section 46 of the NI Act could not succeed.
This petition is found to be meritless and is accordingly dismissed.
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2023 (9) TMI 443
Dishonour of Cheque - security cheque or not - acquittal of accused - holder of cheque on the date of presentation viz. 31.12.2004.
Security cheque or not? - Whether the learned Magistrate committed error in recording finding that the complainant was having custody of the cheque on the date when the transaction was entered upon between the parties? - HELD THAT:- On evaluation of the cross-examination of the complainant, it has come on record that the date, amount and name in disputed cheque was entered by the accused. Such admission of part of complainant indicate the date “31.12.2004” being entered by accused - Even otherwise, if one looks at provisions of Section 138(a) of the Act, it prescribes the date inscribed on cheque as the date on which cheque was drawn. The same is provided for the purpose of determining validity of the cheque. However, the fact remains that the issuance of cheque in light of the aforesaid provisions shows as “31.12.2004”.
Period of limitation - Whether the complainant be treated as “holder of cheque” on the date of presentation viz. 31.12.2004, to attract the offence under Section 138 of the N.I. Act? - HELD THAT:- In the present case, at no stage, evidence has been adduced by the complainant to show that within the prescribed period of limitation, the debt was acknowledged by the accused in writing, which is required under Sub-Section (3) of Section 25 of the Indian Contract Act.
The period of limitation of three years is to be computed as provided under Article 19 of the Limitation Act, which provides for the money payable within three years from the date of loan. The date on which loan was advanced, makes the present transaction time barred as on 31.12.2004. Admittedly, the date of loan as emerged on record is 15.12.1998 and by applying the prescribed period of three years, as per Article 19 of the Limitation Act, would come to an end on 15.12.2001, whereas the disputed cheque bears the date 31.12.2004. In absence of any document being brought on record by the complainant that the debt was acknowledged during the prescribed period of limitation, the cheque was time barred.
In light of the decision of the Hon’ble Supreme Court in the case of Sasseriyil Joseph [2001 (9) TMI 1177 - SC ORDER], the same cannot be treated “as legally enforceable debt” or other “liability” as appeared in the Explanation attached to Section 138 of the N.I. Act.”
The appeal is found to be devoid of any merit and hence, the same stands dismissed.
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2023 (9) TMI 442
Dishonour of Cheque - insufficient funds - notice not served upon to the applicants / Directors of the company - HELD THAT:- It appears that complainant issued demand notice and the same was served to the accused no.1 Company on 29/11/2018. However, in spite of the notices issued to accused No. 2 to 5 addressed on same postal address of accused No. 1 Company, returned unserved to the accused No. 2 to accused no.5 by the postal department with an endorsement “Not Delivered Unclaimed“ on 29/11/2018, hence the legal demand notice to accused No. 2 to 5 may be considered as deemed service under Section 22 of General Clauses Act. All the accused failed to clear their cheque value and neglected to make the payments to the Complainant. It appears from the record that the cheque has been dishonoured with remarks of “Funds Insufficient” and the accused have not complied with the legal demand notice.
At this stage, in a recent decision of the Hon’ble Supreme Court in case of Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra and Ors., [2021 (4) TMI 1244 - SUPREME COURT], is required to be referred to. After taking into consideration the earlier decision on exercising the powers under Section 482 of the Code of Criminal Procedure including the decision of State of Haryana V. Bhanaj Lal, [1990 (11) TMI 386 - SUPREME COURT] - In view of the finding given by the Apex Court in case of Neeharika Infrastructure Pvt. Ltd., it transpires that the power of quashing of criminal proceedings should be exercised very sparingly and with circumspection and that too in rarest of the rare cases and it was not justified for the Court in embarking upon an inquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the inherent powers do not confer any arbitrary jurisdiction on the Court to act according to its whims and fancies.
It appears from the order of issuance of summons passed by learned trial court on 04.09.2019 that under the court inquiry under Section 202 of the Code of Criminal Procedure, the complainant has been heard wherein he has stated that when the offence was committed by the accused no.2 to 5, at that time time they were responsible Directors and involved in the day to day affairs of the company, therefore, offence is made out against them and requested to issue process against them under Section 141 of the NI Act and while considering the complaint as well as documentary evidences produced during the inquiry under Section 202 of the Code, the learned trial court has passed order of issuing process against the accused no.1 to 5.
Thus, no case is made out to quash the criminal proceedings at this stage while exercising the powers under Section 482 of the Code of Criminal Procedure. No interference is required in the order passed by learned trial court vide order dated 04.09.2019 regarding issuance of process against the accused no.1 to 5 and accordingly, present application stands rejected.
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2023 (9) TMI 407
Whether, by enacting the Amendment and Validation Act of 1997, the Himachal Pradesh State Legislature has validly removed the basis of the judgment of the Division Bench of the High Court dated 27 March, 1997? - Non-inclusion within its scope, the activity of the appellants in providing gratis transport facilities for their employees and their children, as the charging provision contained therein, namely, Section 3 (1) and the Explanation thereto were couched in very ambiguous terms - legislative competence of the Himachal Pradesh Legislative Assembly to enact the Act of 1955 and the Amendment and Validation Act of 1997.
Taxability under Section 3(1-A) of the Amendment and Validation Act of 1997 - activity of the appellants of providing gratis transport facilities for their employees and their children.
HELD THAT:- The power of a legislature to legislate within its field, both prospectively and to a permissible extent, retrospectively, cannot be interfered with by Courts provided it is in accordance with the Constitution. It would be permissible for the legislature to remove a defect in an earlier legislation, as pointed out by a constitutional court in exercise of its powers by way of judicial review. This defect can be removed both prospectively and retrospectively by a legislative process and previous actions can also be validated. However, where a legislature merely seeks to validate the acts carried out under a previous legislation which has been struck down or rendered inoperative by a Court, by a subsequent legislation without curing the defects in such legislation, the subsequent legislation would also be ultra-vires. Such instances would amount to an attempt to ‘legislatively overrule’ a Court’s judgment by a legislative fiat, and would therefore be illegal and a colourable legislation.
Separation of powers, as crystalised under the Indian Constitution, is characterised by division of power and functions between the legislature, executive and the judiciary, which are the three co-equal organs of the State. The doctrine also necessarily postulates that each institution has some power to regulate the functions of the others; this is in the form of the ancillary principle of “checks and balances.” The role of the judiciary in galvanising our constitutional machinery characterised by institutional checks and balances, lies in recognising that while due deference must be shown to the powers and actions of the other two branches of the government, the power of judicial review may be exercised to restrain unconstitutional and arbitrary exercise of power by the legislature and executive organs - Simply setting at naught a decision of a court without removing the defects pointed out in the said decision, would sound the death knell for the rule of law. The rule of law would cease to have any meaning if the legislature is at liberty to defy a judgment of a court by simply passing a validating legislation, without removing the defects forming the substratum of the judgment by use of a non-obstante clause as a technique to do so.
Thus, by enacting the Amendment and Validation Act of 1997, the Himachal Pradesh State Legislature has validly removed the basis of the judgment of the Division Bench of the High Court dated 27 March, 1997.
Legislative competence of the Himachal Pradesh Legislative Assembly to enact the Act of 1955 and the Amendment and Validation Act of 1997, which are stated to be enacted on the strength of Article 246, read with Entry 56 of List II of the Seventh Schedule of the Constitution of India - HELD THAT:- This argument appears to be a formal one as the High Court did not have an occasion to consider the aspect of legislative competence vis-à-vis the impugned Act - The import of the Act of 1955, as amended by the Amendment and Validation Act of 1997, could be gathered from the Preamble which provides that it has been enacted to provide for levying a tax on passengers and goods carried by road in motor vehicles. It is therefore clear that tax is sought to be imposed on passengers and goods, carried by road in motor vehicles. It is a no brainer that such a tax falls within the legislative field governed by Entry 56 of List II of the Seventh Schedule of the Constitution, which pertains to “taxes on goods and passengers carried by road and inland water ways.” Simply for the reason that notices have been issued to the owners or assessment orders have been passed against the owners of the vehicles, it cannot be said that the tax is levied on the motor vehicles. If the persons carried happen to be employees of the owners of the buses, such employees should pay the tax - there are no substance in the contention of the appellants that the tax was sought to be imposed on ‘motor vehicles’ and therefore, the same is outside the legislative competence of the State Legislature for Himachal Pradesh. It is clarified that the tax is on passengers and goods and the same has to be paid by the owners of the motor vehicles whose responsibility it is to pay. Therefore, there is no substance in the argument concerning legislative competence of the State Legislature in enacting the Act of 1955 or the Amendment and Validation Act of 1997.
Appeal dismissed.
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2023 (9) TMI 406
Dishonour of Cheque - quantum of fine - whether courts can impose more than twice the cheque amount, as fine, by way of interest or otherwise, for the offence punishable under Section 138 of the NI Act? - HELD THAT:- Going by the statutory restriction, the maximum sentence that can be imposed for commission of offence under Section 138 of the N.I.Act is imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque or with both. The trial court imposed double the cheque amount as fine, taking note of the fact that cheque was issued during 2015, the same cannot be held as excessive and the said reason is justifiable.
But as far as grant of interest at the rate of 9% to double the cheque amount from the date of judgment on failure to pay the fine amount ordered not paid within sixty days, is not legally permissible since the statute permits imposition of fine which may extend to twice the cheque amount and not beyond double the cheque amount. To put it correctly, no amount in excess of double the cheque amount could be imposed as fine. Thus, it appears that the learned Magistrate exceeded the statutory limit and granted 9% interest to the fine amount as in the case of a civil court decree, thereby the amount of fine exceeded the statutory limit, by imposing default clause.
However, it is made clear that the courts can impose double the cheque amount as fine or lesser sum, by adding interest thereof, or to compensate the complainant otherwise, by quantifying the amount, but on any contingency the fine amount shall not exceed twice the cheque amount. Therefore, the sentence is modified, so as to maintain the same within the statutory limit.
The conviction stands confirmed and the sentence stands modified, whereby the accused/revision petitioner is sentenced to undergo imprisonment for a day till rising of the court and to pay a fine of Rs.2,05,220/- and the said amount shall be given as compensation to the complainant under Section 357(1)(b) of the Cr.P.C. In default of payment of fine, the accused shall undergo imprisonment for a period of four months - this revision petition is allowed in part.
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2023 (9) TMI 405
Dishonour of Cheque - suppression of material facts - details of the transaction are not stated either in the notice or in the compliant - HELD THAT:- The law is clear on the point that the whole purpose of the revisional jurisdiction is to preserve power in the court to do justice in accordance with the principles of criminal jurisprudence and, therefore, it would not be appropriate for the High Court to re-appreciate the evidence and come to its own conclusion on the same when the evidence had already been appreciated by the Magistrate as well as the Sessions Judge in appeal, unless any glaring feature is brought to the notice of the court which would otherwise tantamount to gross miscarriage of justice. To put it otherwise, if there is nonconsideration of any relevant materials, which would go to the root of the matter or any fundamental violation of the principle of law, then only the power of revision would be made available.
In fact, nothing substantiated in this revision petition to interfere with the concurrent findings of conviction. However, the sentence requires modification to ensure payment of the cheque amount.
The conviction imposed by the Courts below stands confirmed. Consequently, the accused is sentenced to undergo simple imprisonment for a day till raising of the Court and to pay fine of Rs.10,00,000/-. Fine, if realized, the same shall be given as compensation to the complainant under Section 357(1)(b) of Cr.P.C. In default of payment of fine, the accused shall undergo default imprisonment for a period of eight months - this revision petition succeeds in part and is accordingly allowed in part by modifying the sentence.
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2023 (9) TMI 349
Dishonour of Cheque - legally recoverable debt or not - rebuttal of presumption as incorporated under Section 139 of the NI Act - HELD THAT:- This Court keeping in perspective the nature of the proceedings arising under the NI Act and also keeping in view that the cheque itself is a promise to pay even if the debt is barred by time has in that circumstance kept in view the provision contained in Section 25(3) of the Contract Act and has indicated that if the question as to whether the debt or liability being barred by limitation was an issue to be considered in such proceedings, the same is to be decided based on the evidence to be adduced by the parties since the question of limitation is a mixed question of law and fact - this Court was of the view that entertaining a petition under Section 482 CrPC to quash the proceedings at the stage earlier to the evidence would not be justified.
The provision would indicate that in respect of a promissory note payable at a fixed time, the period of limitation being three years would begin to run when the fixed time expires. Therefore, in the instant case, the time would begin to run from the month of December, 2016 and the period of limitation would expire at the end of three years thereto i.e. during December, 2019. In that light, the cheque issued for Rs.10,00,000/- which is the subject matter herein is dated 28.04.2017 which is well within the period of limitation. The complaint in CC No.681 of 2017 was filed in the Court of the Chief Metropolitan Magistrate on 11.07.2017. So is the case in the analogous complaints. Therefore, in the instant case not only the amount was a legally recoverable debt which is evident on the face of it, the complaint was also filed within time. Hence there was no occasion whatsoever in the instant case to exercise the power under Section 482 to quash the complaint.
The order impugned is accordingly set aside - Appeal allowed.
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