2024 (1) TMI 628 - HC - Indian Laws

Dishonour of Cheque - Seeking waiver of deposit of 20% amount of compensation - whether there exist exceptional circumstances to exempt the petitioner from depositing the 20% of the fine, as directed by the learned Trial Court by way of order on sentence, during the pendency of Criminal Appeal filed by the petitioner against his conviction under Section 138 of NI Act? - HELD THAT - This Court notes that in the application filed before the learned Sessions Court by the petitioner under Section 148 of NI Act seeking waiver of deposit of 20% of fine amount, only two circumstances were raised before the learned Sessions Court, which were claimed as exceptional in nature. The first exceptional circumstance was the pendency of petition filed by the petitioner under the Provincial Insolvency Act, and the second exceptional circumstance was the medical condition of the petitioner. Before this Court, one additional circumstance has been claimed as exceptional i.e. the pendency of consumer complaints filed by the complainant before the NCDRC against the insurance company, allegedly seeking the same amount as the amount in question in the present case. This Court also notes that in the impugned order dated 20.01.2020, though the learned Sessions Court has dealt with the argument regarding pendency of insolvency petition, it has not given any finding on the second exceptional circumstance i.e. the medical condition of the petitioner. However, it also appears from the perusal of impugned order that the arguments in this regard were not addressed before the learned Sessions Court by the counsel for petitioner, though this ground was mentioned in the application filed under Section 148 of NI Act. This Court is of the opinion that the present case be remanded back to the learned Sessions Court/Appellate Court for deciding afresh, as to whether the three exceptional circumstances being raised by the petitioner herein fall within the category of exceptional circumstances so as to warrant waiver of condition to deposit 20% of fine amount during the pendency of appeal against conviction under Section 138 of NI Act. The petitioner shall also be at liberty to bring any other exceptional circumstance to the notice of the learned Sessions Court. The present petition alongwith pending application is disposed of.

Summary

Issues Involved:
1. Quashing of the order directing deposit of Rs. 1,20,00,000/- within 30 days under Section 148 of the Negotiable Instruments Act, 1881.
2. Consideration of exceptional circumstances for waiving the deposit requirement.

Summary:

Issue 1: Quashing of the Order
The petitioner sought quashing of the order dated 20.01.2020, passed in C.A. No. 174/2019, which directed the petitioner to deposit Rs. 1,20,00,000/- within 30 days under Section 148 of the Negotiable Instruments Act, 1881 (NI Act). The petitioner was convicted by the learned Metropolitan Magistrate for the offense under Section 138 of the NI Act and was sentenced to six months of simple imprisonment along with a compensation payment of Rs. 6 crores. The petitioner's appeal led to the suspension of the sentence, but the Sessions Court dismissed the application seeking waiver of the deposit of 20% of the compensation amount.

Issue 2: Consideration of Exceptional Circumstances
The petitioner argued that the Sessions Court failed to consider exceptional circumstances warranting the waiver of the deposit. These included the petitioner's financial and health conditions and the pendency of insolvency proceedings. The petitioner cited the Supreme Court's decision in Jamboo Bhandari v. M.P. State Industrial Development Corporation, which states that the imposition of a 20% deposit is not an absolute rule and can be waived under exceptional circumstances. The petitioner's counsel highlighted three main points:
1. Financial hardship due to insolvency proceedings.
2. The pendency of consumer complaints against the insurance company seeking the same amount.
3. The petitioner's severe health issues, including Multiple Sclerosis.

Court's Decision:
The High Court noted that the Sessions Court had considered the insolvency proceedings but did not address the petitioner's health condition adequately. The High Court also recognized the additional argument regarding the consumer complaints, which was not presented before the Sessions Court.

The High Court, referencing the Supreme Court's decision in Jamboo Bhandari, held that the case should be remanded back to the Sessions Court to reconsider whether the exceptional circumstances justify waiving the deposit requirement. The Sessions Court is directed to decide the issue within two months, considering all arguments and any additional exceptional circumstances the petitioner may present.

The petition was disposed of with these directions, and the judgment was to be forwarded to the concerned Sessions Court for further action.