AI Structured Summary
Not yet generated for this judgment
Judgment
Badar Durrez Ahmed, J.—The petitioner is aggrieved by the judgment dated 18.09.2006 delivered by the learned Additional Sessions Judge, New Delhi in Criminal Appeal No. 41/2005. The learned Additional Sessions Judge affirmed the judgment delivered by the learned Metropolitan Magistrate dated 05.07.2005 and the order on sentence dated 14.07.2005 whereby the petitioner along with the other accused i.e., Good Value Marketing Company Limited (hereinafter referred to as the said "Company") were convicted u/s 138 read with Section 141 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the said "Act"). The said company was sentenced to pay a fine of Rs. 5,000/- and the petitioner was sentenced to simple imprisonment for one year and also to pay a compensation of Rs. 4 crores to the complainant society (Air Force Group Insurance Society) and in default the petitioner was required to further undergo three months simple imprisonment. The main grievance of the petitioner is that the petitioner has been convicted and sentenced in this case when, according to him, he was not a summoned accused and that he has suffered conviction and sentence in a trial in which, according to the petitioner, he was not even an accused. It was contended on behalf of the petitioner that this has resulted in gross miscarriage of justice.
Before the aforesaid grievance of the petitioner can be examined, it would be necessary to set out the sequence of events that have taken place in connection with this case. On 12.03.1999 a complaint was filed on behalf of the said society u/s 138 of the said Act. The complaint disclosed that, on the representation of the said company, the said society invested a sum of Rs. 2 crores for a period of 36 months through a draft dated 05.01.1996. It is alleged that the said company issued a cheque for Rs. 9.5 lakhs as well as a cheque for Rs. 1,14,521/- towards interest and a third cheque for a sum of Rs. 2 crores as return of the principal amount. It was further alleged that on presentation all the three cheques were returned unpaid with the remarks "refer to drawer". A notice was sent on 30.01.1999 to pay up the amount of the dishonoured cheques. Despite due service of the notice, the accused failed to pay the cheque amounts within 15 days and accordingly, the complaint was filed.
It is pertinent to note that the complaint indicated the accused to be:
M/s. Good Value Marketing Co. Ltd.
Through its Chairman
Shri Dilip S Dahanukar
311, Merchant Chambers
Hill Road, Bandra, Bombay-400050
Dr. Tushar D. Pimpale
Director
M/s. Good Value Marketing Co. Ltd.
31 I, Merchant Chambers
Hill Road, Bandra, Bombay-400050.
In the body of the complaint, the accused No. 1 and accused No. 2 were described as follows:--
That accused No. 1, M/s. Good Value Marketing Co. Ltd., is a limited company under the Companies Act, 1956 having its registered office at 311, Merchant Chambers, Hill Road, Bandra, Bombay-400050. Accused No. 2 is a Director of M/s Good Value Marketing Company Ltd. Accused No. 1 and along with Chairman is responsible for day to day functioning of the company accused No. 1.
In paragraph 13 of the complaint, the following averment is made:
That the complainant, therefore submits that the act of the accused No. 1 Chairman and Director, accused No. 2 and other defaulting officers have rendered themselves liable for prosecution u/s 138 of Negotiable Instruments Act.
A reading of the aforesaid extract from the complaint indicates that there is some confusion with regard to the role of the petitioner. He has, on the basis of the cause title of the complaint, apparently been named as representing the said company However, a reading of paragraph 2 of the complaint indicates that the petitioner, who was the Chairman of the said company, was specifically alleged to be responsible for the day-to-day functioning of the said company. Paragraph 13 of the complaint has referred to the acts of not only the accused No. 1 but also the Chairman and accused No. 2 and other defaulting officers. Therefore, it appears that there was some confusion in the mind of the complainant with regard to the question of making the petitioner an accused independent of the said company. However, it does become apparent from a reading of the complaint that the grievance of the society was not only against the said company and, initially against the accused No. 2 but also against the petitioner being the Chairman of the said company and allegedly being responsible for the day-to-day functioning of the said company.
By an order dated 30.05.2000 the accused were directed to be summoned for 09.05.2001. The notice/summons was consequently issued on 28.06.2000 for 09.05.2001. The same was issued to the said company through its Chairman Dilip S Dhanukar i.e., (the petitioner). The same was received as per the endorsement on the said notice, on 01.08.2000. An application u/s 319 of the Code of Criminal Procedure, 1973 was apparently moved by the complainant society on 11.04.2002 for specifically summoning the petitioner. It appears that no formal order was passed on that application. It must also be noted that the society decided to drop proceedings against Dr Tushar D Pimpale who was arrayed as accused No. 2 in the complaint filed by the society. By an order dated 08.11.2002, the proceedings against the said Dr Tushar D Pampale were dropped and proceedings were directed to continue only against accused No. 1. It is interesting to note that on 14.10.2003 an application was moved by the accused Dilip S Dhanukar for discharge u/s 245(2) of the Code. That application was later rejected by the learned Metropolitan Magistrate on 25.02.2004 and he specifically observed that there was no ground for recall of the summoning order dated 30.05.2000. However, in the said order, the learned Metropolitan Magistrate observed that there was sufficient material on record to proceed against the accused u/s 138 of the said Act and held:- "Accordingly, application of the accused No. 1 is dismissed. "Significantly, at the beginning of the order, it is recorded as under:
By this order I shall dispose of an application filed by the accused through Dilip S Dhanukar for discharge u/s 245(2) of Cr.P.C.
This makes it clear that the learned Metropolitan Magistrate was also proceeding on the basis that the petitioner was, in fact, the accused No. 1 and that there was no difference between him and the said company. There is nothing on record to indicate that any proceeding for setting aside the order dated 25.02.2004 passed by the learned Metropolitan Magistrate was taken by the petitioner. The position, therefore, is that the petitioner accepted the fact that the proceedings would continue against him as his application for discharge was not allowed. A notice u/s 251 of the Code was framed and served upon the accused. Since, the notice has a great bearing on the ultimate result of this case, it would be relevant to set it out in its entirety. The same reads as under:
Notice u/s 251 Cr.P.C.
It is alleged against you accused No. 1 company, M/s Good Value Marketing Ltd. (being represented through director and Chairman Dilip S Dhanukar) that you issued three cheques bearing No. 552063, 552064 and 552065 dated 31.12.1998, 11.01.1999 and 11.01.1999 respectively each for a sum of Rs. 9,50,000/-, 1,14,521/- and for two crores respectively drawn on State Bank of Bikaner and Jaipur P.M. Road Bombay to the complainant in discharge of your liability and you accused Dilip S Dhanukar being the Chairman and Director of accused No. 1 had signed the above mentioned cheques, and you are also in charge and responsible for day to day business of accused No. 1 Company. All the above mentioned three cheques were dishonoured on presentation due to reason of "refer to drawer". Thereafter a legal notice dated 30.10.1999 was issued to you by registered post within the prescribed time and despite service of the same you failed to make the payment within the period of 15 days from the receipt of said notice and thereby committed an offence U/s. 138 of Negotiable Instrument Act which is within in my cognizance.
I hereby direct you to be tried by this court for the said offence.
Sd/
M.M./New Delhi
01.03.2004.
(Underlining added).
Consequent upon the said notice, an order was passed on 01.03.2004 itself to the following effect:
01.03.2004
Present: AR of the complainant J. Singh with counsel for complainant.
Accused No. 1''s Director Dalip Dhanukar with counsel.
From the material on record prima facie case U/S 138 Negotiable Instruments Act is made out against Accused No. 1. Notice U/S 251 Cr.P.C. framed, accordingly, to which the Director of Accused No. 1 pleads not guilty and claims trial. Further, Director of Accused No. 1 company has admitted being signatory of three cheques but has denied receiving of Legal Notice dated 30.01.1999.
Put the matter for CE and complainant is permitted to lead evidence by affidavit and supply the advance copy to the counsel for the Accused No. 1 at least 10 days before the next date of hearing.
Now put up the matter for cross examination of the complainant on 20.04.2004.
Sd/
M.M./New Delhi
01.03.04
A reading of the order passed on 01.03.2004 as set out above again indicates the confusion that has persisted with regard to the petitioner. The petitioner has not been separately shown as an accused but as the Director of accused No. 1 and he has pleaded not guilty. It is significant to note that in the notice u/s 251, the charge is against the said company as well as against the petitioner as an accused being the Chairman and Director of the said company. The allegation is that the petitioner had signed the cheques in question and that he was also in-charge and responsible for the day-to-day business of the said company. In the order dated 01.03.2004, it is significantly recorded that the petitioner had admitted being the signatory of the three cheques in question though he denied receiving the legal notice dated 30.01.1999.
It is pertinent to note that the application for discharge which had been filed prior to the service of the notice u/s 251 CrPC had remained pending and was dismissed by the learned Metropolitan Magistrate after the order dated 01.03.2004 was passed. As noted above, the said application for discharge was rejected on 20.05.2004. This indicates that throughout this period, the petitioner was being regarded as an accused also along with the company.
On 20.09.2004 the statement u/s 313 read with Section 281 CrPC of Dilip S Dhanukar (i.e., the petitioner) was recorded. The said statement reveals that all the incriminating evidence had been put to the him. In particular, it was put to him that the said company was being represented by him and that he had approached the complainant in October, 1995 for the investment for a period of three years. It was further put to the petitioner that he was the director and Chairman of the accused company and was in-charge of the day-to-day affairs of the said company. It was also put to the accused that the three cheques in question were issued by him and were duly signed by him. The petitioner stated that he wished to lead defence evidence. He further stated that a false complaint had been filed against the said company and that he was not the paid director of the company. He further stated that he was not running the day-to-day affairs of the company. According to him, there was a full time paid director Dr. Tushar D Pimpale for running the affairs of the company on day-to-day basis.
The Section 313 CrPC statement of the pet itioner clearly indicates that he was made aware of the totality of circumstances as also the role that was ascribed to him in the said offence. Significantly, the petitioner had earlier admitted that the three cheques in question had been signed by him. There was no denial of this fact in the said statement. The petitioner was aware of the allegations against him and specific to him as distinct from that against the said company. It is because of this awareness that the petitioner in the said statement specifically stated that he was neither in-charge of the said company nor was he running the day-to-day affairs of the company. It is, therefore, clear that the petitioner was aware that he could be convicted u/s 138 read with Section 141 of the said Act, in case, it was established that he was in-charge of the affairs of the company.
An examination of the impugned judgment dated 18.9.2006 indicates that the learned Additional Sessions Judge had exhaustively dealt with all the points raised by the petitioner. The petitioner had specifically submitted that he has been convicted without being impleaded as a party in the complaint or there being any averment or allegations in the evidence. It was also submitted on behalf of the petitioner that no notice u/s 251 was given to him in his individual capacity and despite that he has been convicted and sentenced and, therefore, such conviction and sentence would be opposed to the principles of natural justice as no fair and reasonable opportunity had been provided to him to defend himself. The learned Additional Sessions Judge, rejecting the plea of the petitioner, found that the petitioner was admittedly the chairman of the said company. He further found that it was specifically mentioned in the complaint in paragraph 2 thereof that the petitioner being the chairman of the company was responsible for the day-to-day functioning of the said company. He also noted that merely being a director of the company, it was not sufficient to make such a person liable u/s 141 of the said Act. Having noted this, the learned Additional Sessions Judge observed that the petitioner was admittedly the signatory of the cheques in question and that in S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, it was specifically observed by the Supreme Court that so far as the signatory of the cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and would be covered u/s 141(2) of the said Act. Reference was also made to a decision of this court in the case of Aruna Bansal v. State and Anr., 2006 V AD (Delhi) 303 wherein it was held:
Cheque in question admittedly signed by said Sanjay and whether he was Managing Director or a Director in-charge of day-to-day affairs of company would be additional point in favour of the petitioner. Mere fact that he was signatory of cheque would bring him within the ambit of Section 141 (2).
The learned Additional Sessions Judge after relying upon the said two decisions observed that keeping in view the fact that there was a specific averment in the complaint that the petitioner was in charge of and responsible for the day-to-day affairs of the company coupled with the fact that he was also a signatory of the cheques in question, the petitioner would clearly be within the ambit of Section 141(2) of the said Act and that he could not be acquitted on this ground alone.
It was also urged before the learned Additional Sessions Judge, as it was urged before me, that the notice u/s 251 of the Code was not given to the petitioner. After examining the said notice u/s 251, the learned Additional Sessions Judge came to the conclusion that the notice was, in fact, given to the accused (petitioner) to which he pleaded not guilty. A reference to the said notice u/s 251 which has been set out in extenso earlier clearly indicates that the petitioner was also put to notice being the Chairman and Director of the said company and also having signed the said cheques. He was notified that he was in-charge and responsible for the day-to-day business of the said company. Therefore, the learned Additional Sessions Judge, in my view, correctly appreciated the factual position and came to the conclusion that the notice u/s 251 CrPC had reference to the petitioner also. The plea of the petitioner was rightly rejected.
It was also contended on behalf of the petitioner that although a notice u/s 138 of the said Act was given to the said company, no notice was served on him. The learned Additional Sessions Judge after referring to the decision in the case of Dilip Kumar Jaiswal Vs. Debapriya Banerjee, observed that service of notice on the company was also service on its directors. On the question of merits of the matter also, the learned Additional Sessions Judge concurred with the view taken by the learned Metropolitan Magistrate and found that there was a debt and liability for the discharge of which the cheques were given. It was also found, as a question of tact, that the cheques on presentation were dishonoured. The endorsement "refer to drawer" contained in the dishonour memos clearly indicated that the said company did not maintain sufficient funds for the clearance of the cheques. The learned Metropolitan Magistrate had considered this aspect of the matter in detail and relied upon the decision of the Supreme Court in the case of M/s. Electronics Trade and Technology Development Corpn. Ltd., Secunderabad Vs. M/s. Indian Technologists and Engineers (Electronics) Pvt. Ltd. and another, to conclude that the cheque returned by the bank with the endorsement "refer to drawer" would amount to dishonour within the meaning of Section 138 of the said Act. Paragraph 6 of the said decision reads as under:
It would thus be clear that when a cheque is drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person out of the account for the discharge of the debt in whole or in part or other liability is returned by the bank with the endorsement like (1) in this case, "refer to the drawer" (2) "instructions for stoppage of payment" and (3) "stamp exceeds arrangement", it amounts to dishonour within the meaning of Section 138 of the Act. On issuance of the notice by the payee or the holder in due course after dishonour, to the drawer demanding payment within 15 days from the date of the receipt of such a notice, if he does not pay the same, the statutory presumption of dishonest intention, subject to any other liability, stands satisfied.
Both the courts below, after examining the facts and law on the subject, had acquitted the accused in respect of cheque No. 552062 which was for the amount of Rs. 9.5 lacs on account of the fact that the legal notice was not issued within the prescribed period of 15 days. As regards the other two cheques i.e., for the amount of Rs. 11,45,521/- and Rs. 2 crores, the notices were sent in time and, therefore, all the other ingredients of Section 138 having been satisfied the accused, which comprise of the said company and the present petitioner, were convicted and sentenced as mentioned above.
I have heard the learned counsel for the parties at length and I have also examined the written submissions submitted by the counsel for the petitioner as well as counsel for the respondent/complainant. The essential grievance of the petitioner, apart from the issue of merits, is that the petitioner has been convicted and sentenced without being summoned as an accused. This, according to him, has resulted in gross miscarriage of justice. While, it is true that the proceedings conducted pre-trial and the trial itself could have been formalized in a better manner, it does not mean that because there is some irregularity in the proceedings, the petitioner would be entitled to an order of acquittal. It has been noted above that the notice u/s 251 clearly set out the accusation against the said company as also against the petitioner. Consequent upon the service of the notice u/s 251, the petitioner pleaded not guilty. The section 313 CrPC statement of the petitioner also makes it clear that he was fully aware of the entire extent of the case against him. In the order dated 01.03.2004 referred to above, the learned Metropolitan Magistrate had recorded the admission of the petitioner that the cheques in question had been signed by him.
The question, therefore, that arises is whether the petitioner can be brought within the ambit of Section 141(2) of the said Act. The learned Additional Sessions Judge had correctly placed reliance on the decision of the Supreme Court in SMS Pharmaceuticals Ltd. (supra) in concluding that the petitioner did fall within the ambit of Section 141(2) of the said Act. In SMS Pharmaceuticals Ltd. (supra) the following three questions were referred for determination:
(a) Whether for purposes of Section 141 of the Negotiable Instruments Act, 1881, it is sufficient if the substance of the allegation read as a whole fulfil the requirements of the said section and it is not necessary to specifically state in the complaint that the person accused was in charge of, or responsible for, the conduct of the business of the company.
(b) Whether a director of a company would be deemed to be in charge of, and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary.
(c) Even if it is held that specific averments are necessary, whether in the absence of such averments the signatory of the cheque and or the managing directors or joint managing director who admittedly would be in charge of the company and responsible to the company for conduct of its business could be proceeded against.
Question (c) is relevant for the purposes of the present case. It has been answered by the Larger Bench in SMS Pharmaceuticals Ltd. (supra) in the following manner:
(c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable u/s 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of an responsible for the conduct of business of the company. Therefore, they get covered u/s 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.
(underlining added)
This decision makes it absolutely clear that even where specific averments are not made in the complaint that the person accused was in charge of, or responsible for the conduct of the business of the company, the signatory of the cheque in question would clearly be responsible for the incriminating act and would be covered under sub-section (2) of Section 141 of the Act. In the present case, the petitioner admitted that he was the signatory of the cheques which were dishonoured. This clearly brought him within the ambit of Section 141(2) of the Act. So, once the offence u/s 138 is made out on merits, the petitioner cannot escape his liability because he is covered u/s 141(2) of the said Act in view of the clear dictum of the Supreme Court in the case of SMS Pharmaceuticals Ltd. (supra).
Furthermore, while deciding this case, the provisions of Sections 464 and 465 of the Code of Criminal Procedure, 1973 cannot be lost sight of. The said provisions read as under:
Effect of omission to frame, or absence of, or error in, charge. - (1) No finding, sentence or order by a court of competent jurisdiction shall be deemed invalid merely on the ground that no charge was framed or on the ground of any error, omission or irregularity in the charge including any misjoinder of charges, unless in the opinion of the court of appeal, confirmation or revision, a failure of justice has in fact been occasioned thereby.
(2) If the court of appeal, confirmation or revision is of opinion that a failure of justice has in fact been occasioned, it may-
(a) in the case of an omission to frame a charge, order that a charge be framed and that the trial be recommenced from the point immediately after the framing of the charge;
(b) in the case of an error, omission or irregularity in the charge, direct a new trial to be had upon a charge framed in whatever manner it thinks fit:
Provided that if the court is of opinion that the facts of the case are such that no valid charge could be preferred against the accused in respect of the facts proved, it shall quash the conviction.
Finding or sentence when reversible by reason of error, omission or irregularity. - (1) Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a court of competent jurisdiction shall be reversed or altered by a court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution unless in the opinion of that court, a failure of justice has in fact been occasioned thereby.
(2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings.
A Constitution Bench of the Supreme Court in the case of Willie (William) Slaney Vs. The State of Madhya Pradesh, with regard to the provisions of Sections 225, 232, 535 and 537 of the Code of Criminal Procedure, 1898 which correspond to Sections 215, 464(2), 464 and 465 of the 1973 Code, held as under:
Now, as we have said, Sections 225, 232, 535 and 537(a) between them, cover every conceivable type of error and irregularity referable to a charge that can possibly arise, ranging from cases in which there is a conviction with no charge at all from start to finish down to cases in which there is a charge but with errors, irregularities and omissions in it. The Code is emphatic that ''whatever'' the irregularity it is not to be regarded as fatal unless there is prejudice.
It is the substance that we must seek. Courts have to administer justice and justice includes the punishment of guilt just as much as the protection of innocence. Neither can be done if the shadow is mistaken for the substance and the goal is lost in a labyrinth of unsubstantial technicalities. Broad vision is required, a nice balancing of the rights of the State and the protection of society in general against protection from harassment to the individual and the risks of unjust conviction.
Every reasonable presumption must be made in favour of an accused person; he must be given the benefit of every reasonable doubt. The same broad principles of justice and fair play must be brought to bear when determining a matter of prejudice as in adjudging guilt. But when all is said and done what we are concerned to see is whether the accused had a fair trial, whether he knew what he was being tried for, whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself.
If all these elements are there and no prejudice is shown the conviction must stand whatever the irregularities whether traceable to the charge or to a want of one.
In the same decision, the Constitution Bench also indicated what is the extent to which the procedure prescribed under the Code of Criminal Procedure can be taken so as to meet the ends of justice. It cannot be better stated then the words used by the Supreme Court:
Before we proceed to set out our answer and examine the provisions of the Code, we will pause to observe that the Code is a code of procedure and, like all procedural laws, is designed to further the ends of justice and not to frustrate them by the introduction of endless technicalities. The object of the Code is to ensure that an accused person gets a full and fair trial along certain well-established and well-understood lines that accord with our notions of natural justice.
If he does, if he is tried by a competent court, if he is told and clearly understands the nature of the offence for which he is being tried, if the case against him is fully and fairly explained to him and he is afforded a full and fair opportunity of defending himself, then, provided there is ''substantial'' compliance with the outward forms of the law, mere mistakes in procedure, mere inconsequential errors and omissions in the trial are regarded as venal by the Code and the trial is not vitiated unless the accused can show substantial prejudice. That, broadly speaking, is the basic principle on which the Code is based.
Now here, as in all procedural laws, certain things are regarded as vital. Disregard of a provision of that nature is fatal to the trial and at once invalidates the conviction. Others are not vital and whatever the irregularity they can be cured; and in that event the conviction must stand unless the Court is satisfied that there was prejudice. Some of these matters are dealt with by the Code and wherever that is the case full effect must be given to its provisions.
In State of Madhya Pradesh Vs. Bhooraji and Others, the Supreme Court, with reference to the provision of Section 465 of the Code, held as under:
Section 465 of the Code falls within Chapter XXXV under the caption "Irregular Proceedings". The Chapter consists of seven sections starting with Section 460 containing a catalogue of irregularities which the legislature thought were not enough to axe down concluded proceedings in trials or enquiries. Section 461 of the Code contains another catalogue of irregularities which in the legislative perception would render the entire proceedings null and void. It is pertinent to point out that the former catalogue contains the instance of a Magistrate, who is not empowered to take cognizance of offence, taking cognizance erroneously and in good faith. The provision says that the proceedings adopted in such a case, though based on such erroneous order, "shall not be set aside merely on the ground of his not being so empowered".
It is useful to refer to Section 462 of the Code which says that even proceedings conducted in a wrong sessions division are not liable to be set at naught merely on that ground. However, an exception is provided in that section that if the court is satisfied that proceedings conducted erroneously in a wrong sessions division "has in fact occasioned a failure of justice" it is open to the higher court to interfere. While it is provided that all the instances enumerated in Section 461 would render the proceedings void, no other proceedings would get vitiated ipso facto merely on the ground that the proceedings were erroneous. The court of appeal or revision has to examine specifically whether such erroneous steps had in fact occasioned a failure of justice. Then alone the proceedings can be set aside. Thus the entire purport of the provisions subsumed in Chapter XXXV is to save the proceedings linked with such erroneous steps, unless the error is of such a nature that it had occasioned a failure of justice.
We have to examine Section 465(1) of the Code in the above context. It is extracted below:
(1) Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a court of competent jurisdiction shall be reversed or altered by a court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution, unless in the opinion of that court, a failure of justice has in fact been occasioned thereby.
A reading of the section makes it clear that the error, omission or irregularity in the proceedings held before or during the trial or in any enquiry were reckoned by the legislature as possible occurrences in criminal courts. Yet the legislature disfavoured axing down the proceedings or to direct repetition of the whole proceedings afresh. Hence, the legislature imposed a prohibition that unless such error, omission or irregularity has occasioned "a failure of justice" the superior court shall not quash the proceedings merely on the ground of such error, omission or irregularity.
What is meant by "a failure of justice" occasioned on account of such error, omission or irregularity? This Court has observed in Shamnsaheb M. Multtani v. State of Karnataka, (2001) 2 SCC 577 thus: (SCC p. 585, para 23)
We often hear about ''failure of justice'' and quite often the submission in a criminal court is accentuated with the said expression. Perhaps it is too pliable or facile an expression which could be fitted in any situation of a case. The expression ''failure of justice'' would appear, sometimes, as an etymological chameleon (the simile is borrowed from Lord Diplock in Town Investments Ltd. v. Deptt. of the Environment). The criminal court, particularly the superior court should make a close examination to ascertain whether there was really a failure of justice or whether it is only a camouflage.
In Dalbir Singh Vs. State of U.P., the Supreme Court, with reference to Section 464 CrPC observed as under:
There are a catena of decisions of this Court on the same lines and it is not necessary to burden this judgment by making reference to each one of them. Therefore, in view of Section 464 CrPC, it is possible for the appellate or revisional court to convict an accused for an offence for which no charge was framed unless the court is of the opinion that a failure of justice would in fact occasion. In order to judge whether a failure of justice has been occasioned, it will be relevant to examine whether the accused was aware of the basic ingredients of the offence for which he is being convicted and whether the main facts sought to be established against him were explained to him clearly and whether he got a fair chance to defend himself. We are, therefore, of the opinion that Sangaraboina Sreenu Vs. State of Andhra Pradesh, was not correctly decided as it purports to lay down as a principle of law that where the accused is charged u/s 302 IPC, he cannot be convicted for the offence u/s 306 IPC.
In Radha Mohan Singh @ Lal Saheb and Others Vs. State of U.P., the Supreme Court again, with reference to the provision of Section 464 CrPC, observed as under:
In view of Section 464 CrPC it is possible for the appellate or revisional court to convict an accused for an offence for which no charge was framed unless the court is of the opinion that failure of justice would in fact occasion. In order to judge whether a failure of justice has been occasioned it will be relevant to examine whether the accused was aware of the basic ingredients of the offence for which he is being convicted and whether the main facts sought to be established against him were explained to him clearly and whether he got a fair chance to defend himself.
The thread of reasoning running through these decisions is that procedure and technicalities cannot override the object of securing justice. Where such procedure or lack of following any procedure prescribed under the Code does not result in a failure of justice, a conviction or a sentence based on such an irregular proceedings cannot be set at naught. I find that the grievances of the petitioner in the present case are not of the nature of a fundamental illegality but merely of a curable irregularity which could be cured by invoking the provision of Section 464 and or Section 465 CrPC. The only thing to be examined is whether there has been a failure of justice occasioned by the irregular proceedings. As pointed out in the aforesaid decisions as also in Kamalanantha and Others Vs. State of Tamil Nadu, to determine whether or not there has been a failure of justice, it is the duty of the court to see whether the accused had a fair trial, whether he knew what he was being tried for, whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself. In the present case, it is apparent that the petitioner had a fair trial. There may have been irregularities such as in the format of the complaint or the summoning order but the petitioner had a fair trial. He had full opportunity to defend himself and indeed he led evidence by producing four defence witnesses. The petitioner knew exactly what he was being tried for. This is amply demonstrated by the wording employed in the Section 251 CrPC notice as well as the Section 313 CrPC statement made by the petitioner. The facts sought to be established against him were clearly known to him and he had a full and fair chance to defend himself. Therefore, in the present case, it cannot be said that the irregularities resulted in any failure of justice.
As regards the merits of the matter, I find that the Courts below have discussed the same threadbare. As a revisional court, the scope of interference is limited. The reasoning adopted by the courts below in returning the findings on merits does not suffer from any grave infirmity as would warrant any interference by this court.
On the question of sentence, the learned counsel for the petitioner submitted that a lenient view ought to have been taken. Firstly, because the primary offender is the company and the petitioner is implicated only on the basis of section 141 of the said Act. The company has been saddled with a fine of only Rs. 5000/- whereas the petitioner has been sentenced to undergo simple imprisonment of one year and is also required to pay a sum of Rs. 4 crores to the complainant society by way of compensation and, in default, to undergo further simple imprisonment for 3 months. Secondly, it was urged, the petitioner has undergone a coronary by-pass surgery and he is due for another such surgery. The medical condition of the petitioner also ought to have been kept in mind. Thirdly, it was submitted that before the courts below directed payment of compensation of Rs. 4 crores, they ought to have considered the justness of the claim, the loss or injury suffered by the complainant and the capacity of the petitioner to pay the amount awarded as compensation. The learned counsel placed reliance on Sarwan Singh and Others Vs. State of Punjab, and Mangilal Vs. State of Madhya Pradesh,
In reply, the learned counsel for the Respondent submitted that the sentences have been appropriately framed and are clearly within the provisions of Sections 138 and 141 of the said Act. As regards the medical condition of the petitioner and his impending by-pass surgery, the submission on behalf of the Respondent was that the medical certificate produced by the petitioner was not trustworthy (though there is nothing on record to show that the same is not genuine) and that, in any event, the petitioner could have had the surgery in the last seven years when he was facing trial.
The sentence given to the petitioner can be split into two parts. The first is the sentence simplicitor of one year of simple imprisonment and the second part is the compensation of Rs. 4 crores payable to the complainant and the in-default sentence of 3 months simple imprisonment. Insofar as the first part is concerned, I am of the view that, taking into account the fact that the petitioner has faced trial for over seven years and his health condition is not good, his period of imprisonment should be reduced from one year to six months simple imprisonment. There is another circumstance which has enabled me to come to this view. It must be remembered that initially the complaint was also directed against accused No. 2 (Dr Tushar D Pimpale). He was shown as the person who was incharge of the day-to-day affairs of the company. The petitioner''s Section 313 CrPC statement also indicates this. DW 4 had also stated that the petitioner was an unpaid director of the company. Thus, it is clear that the complaint as originally instituted also included Dr. Pimpale as an accused on the ground that he alongwith the petitioner was responsible for the day-to-day functioning of the company. The words used in the complaint were:
Accused No. 2 is a Director of M/s Good Value Marketing Company Ltd. Accused No. 1 and along with Chairman is responsible for day-to-day functioning of the company accused No. 1.
So, it was not as if the petitioner was the sole person sought to be implicated. It is another matter that the petitioner, because he signed the cheques in question, falls under the purview of Section 141(2) of the said Act. But, it is also a fact that Dr Pimpale was dropped as an accused on an application moved by the complainant. Since Dr. Pimpale was dropped at the instance of the complainant and it cannot be held that the petitioner was the sole director responsible for the day to day affairs of the company, I feel that the entire burden of imprisonment cannot fall on the petitioner. It is in these circumstances that I have arrived at the conclusion that the period of imprisonment ought to be reduced to six months.
Coming to the question of compensation, it is settled that the same can be awarded by resorting to Section 357(3) of the Code. (See: K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, There is a distinction between compensation out of a fine and compensation de hors the fine. u/s 138 of the said Act, the offence is liable to be punished with imprisonment for a term which may extend to one as it was prior 6.2.2003. Now, it is 2 years. year or with fine which may extend to twice the amount of the cheque, or with both. This liability to punishment has to be read in conjunction with the powers of the Metropolitan Magistrate in passing a sentence. Section 29(2) of the Code stipulates that:-
(2) The Court of a Magistrate of the first class may pass a sentence of imprisonment for a term not exceeding three years, or of fine not exceeding [five thousand] as it was prior to 23.6.2006. Now, it is ten thousand rupees. rupees, or of both.
By virtue of section 29(4) of the Code, the powers of a Metropolitan Magistrate would be the same as that of a Magistrate of the first class. This case was tried by a Metropolitan Magistrate. Therefore, the maximum fine that could be imposed by him was Rs. 5000/- (as it stood at the relevant time). He has done that in the case of the company. So, if the Metropolitan Magistrate were to utilize the fine that could be imposed by him for compensating the complainant, it would have to be u/s 357(1) of the Code and would, therefore, be limited to the maximum fine that could be imposed i.e., Rs. 5000/-. But, to alleviate the grievance of the complainant, the Magistrate, without imposing a fine, resorted to the provisions of section 357(3) of the Code. This is the view taken by the Supreme Court in K Bhaskaran (supra) as under:-
The trial in this case was held before a Judicial Magistrate of the First Class who could not have imposed a fine exceeding Rs. 5000/- besides imprisonment. The High Court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit.
It is true, if a judicial Magistrate of the First Class were to order compensation to be paid to the complainant from out of the fine realised the complainant will be the loser when the cheque amount exceeded the said limit. In such a case a complainant would get only the maximum amount of rupees five thousand.
However, the Magistrate in such cases can alleviate the grievance of the complainant by making resort to Section 357(3) of the Code. It is well to remember that this Court has emphasised the need for making liberal use of that provision Hari Kishan Vs. Sukhbir Singh and Others, No limit is mentioned in the sub-section and therefore, a Magistrate can award any sum as compensation. Of course, while fixing the quantum of such compensation the Magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus, even if the trial was before a Court of a Magistrate of the First Class in respect of a cheque which covers an amount exceeding Rs. 5000 the court has power to award compensation to be paid to be complainant.
In this backdrop, let us see what is provided in section 357(3) of the Code:
(3) When a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment order the accused person to pay, by way of compensation such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced
Of course, as pointed in K. Bhaskaran (supra), there is no limit on the compensation that may be awarded under this provision, but such compensation must be relateable to the "loss or injury" suffered by the injured/complainant. Before a court awards compensation u/s 357(3) various factors have to considered. The Supreme Court in Sarwan Singh and Others Vs. State of Punjab, observed:
In awarding compensation it is necessary for the court to decide whether the case is a fit one in which compensation has to be awarded. If it is found that compensation should be paid, then the capacity of the accused to pay a compensation has to be determined. In directing compensation, the object is to collect the fine and pay it to the person who has suffered the loss. The purpose will not be served if the accused is not able to pay the fine or compensation for, imposing a default sentence for nonpayment of fine would not achieve the object. If the accused is in a position to pay the compensation to the injured or his dependents to which they are entitled to, there could be no reason for the court not directing such compensation. When a person, who caused injury due to negligence or is made vicariously liable is bound to pay compensation it is only appropriate to direct payment by the accused who is guilty of causing an injury with the necessary mens rea to pay compensation for the person who has suffered injury.
In Mangilal (supra), the Supreme Court, following Hari Kishan Vs. Sukhbir Singh and Others, and Sarwan Singh (supra) held:-
The power of the court to award compensation to victims u/s 357 is not ancillary to other sentences but is in addition thereto. In Hari Singh v. Sukhbir Singh it was observed that the power u/s 357 is a measure of responding appropriately to crime as well as reconciling the victim with the offender. It is, to some extent, a recompensatory measure to rehabilitate to an extent the beleaguered victims of the crime; a modern constructive approach to crimes and a step forward in our criminal justice system. In Sarwan Singh v. State of Punjab it was held that in the awarding compensation, the court has to decide whether the case is a fit one in which compensation has to be awarded. If it is found that the compensation should be ordered to be paid, then while arriving at the quantum to be paid, courts are obliged to keep into account the capacity of the accused to pay the compensation besides taking into consideration also the nature of the crime in each case, the justness of the claim for compensation and the need for it in the context of the victim or members of the family of the victim and other relevant circumstances. If any, in so fixing or apportioning the amount of compensation. As noted above, the mode of application of the fine is indicated in sub-section (1) of Section 357. Sub-section (3) contains an independent and distinct power to award compensation.
Thus, before a court awards compensation u/s 357(3) of the Code it must first consider whether it is a fit case for awarding compensation. To arrive at the quantum of compensation to be paid, the court must examine the justness of the claim, the extent of "loss or injury" suffered by the complainant, the ability of the accused to pay the compensation sought to be fixed, and, in cases of vicarious liability the necessity to fix the burden on the accused who had the necessary mens rea. It is true that section 138 of the said Act, itself indicates that the fine can extend to upto twice the amount of the cheque. But, that by itself does not mean that in every case compensation of double the amount of the cheque has to be awarded. It may be so awarded if the above mentioned factors are examined by the court and upon a proper application of mind the court arrives at that quantum of compensation.
In the present case I find that there is no discussion on these aspects and the courts below have arrived at the figure of Rs. 4 crores, it appears, by simply doubling the amount of the initial deposit of Rs. 2 crores. Before such a heavy compensation can be foisted upon the petitioner and, its compliance sought to be imposed by the in-default sentence of 3 months simple imprisonment, the court ought to have considered the aspects outlined above. I would have taken a decision invoking section 357(4) of the Code but there was no material placed before me with regard to the "loss or injury" suffered by the complainant nor with regard to the petitioners'' ability to pay. I, therefore, deem it appropriate that this issue be remanded to the learned Additional Sessions Judge to enable the parties to place the relevant material to enable him to take a decision in terms of the parameters indicated above. In the result, the conviction of the petitioner is upheld. The sentence is reduced to six months simple imprisonment and the order qua compensation and in-default sentence is set aside. For the limited issue of passing an appropriate order on compensation in the light of the directions given above, this matter is remanded to the learned Additional Sessions Judge. It is made clear that I have not expressed any opinion on the quantum or the order of compensation passed by the court below.
With these directions, this revision petition is disposed of.