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Friday, April 15, 2016

Since the settlement indicated above have been accepted by the parties, the same is recorded as a part of this judgment and order. The appellant shall pay the decretal amount with interest calculated at the rate of 12% per annum (in place of 18% per annum) from 20th June, 1992 with adjustment of Rs.20,00,000/- already paid in 2003, in two installments payable in three months and six months time respectively. On such payment the sentence imposed upon the appellant shall stand reduced to the period already undergone along with fine of Rs.1,00,000/-. The decree of the Special Court, Mumbai in Civil Suit No. 6 of 2002 will be treated to have been satisfied by the appellant on his making the payment of the settlement amount indicated above. In case the settlement amount is not paid by the appellant in the manner and to the extent indicated above, then after six months this order shall stand recalled and the appellant shall surrender to serve out the remaining period of sentence of RI for six months as per the judgment under appeal which shall then stand confirmed by this Court. The Appeal is disposed of accordingly.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.1664 OF 2005

Pallav Sheth                                       …..Appellant

      Versus

Canara Bank                                  …..Respondent



                               J U D G M E N T


SHIVA KIRTI SINGH, J.

This is an appeal under Section 10 of the Special Court (Trial  of  Offences
Relating to Transactions in Securities)  Act,  1992,  directed  against  the
final judgment and order dated 17.10.2005 of the Special  Judge  in  Special
Case No. 1 of 2002.
In view of nature of the order proposed to be passed in this appeal,  it  is
not necessary to go into the details of the evidence.  It would  suffice  to
notice that there was no serious dispute raised on behalf of  the  appellant
that he was liable to pay the  agreed  price  of  Rs.83,00,000/-  for  20000
shares which  were  not  returned  to  the  respondent-bank.   In  fact  the
appellant had admitted the liability and issued cheques to meet it  but  the
cheques were not honored.  The defence of the appellant that such  liability
was only a civil liability without any criminal intention was  not  accepted
by the learned Special Court.  After discussing the  relevant  materials  it
held that dishonest misappropriation of those shares  on  the  part  of  the
accused is writ large.  While rejecting the  defence  of  the  accused  that
there was no criminal intention on his part in  not  paying  the  amount  of
Rs.83,00,000/-, the learned Judge, Special Court  in  paragraph  23  of  the
judgment under  appeal  has  given  lucid  account  of  relevant  facts  for
reaching at such conclusion.  Para 23 runs as follows:
“23.  In this view of the matter, I do not find  merit  in  the  submissions
made on behalf of the accused.  Dishonest intention is quite  clear  and  it
is since beginning of the transaction.  It is on the representation  of  the
accused that 20000 shares alongwith blank share transfer forms, duly  signed
by the Authorised Officer, were  delivered  to  the  representative  of  the
accused, against post dated  cheques,  that  was  also  as  per  the  market
practice. What is pertinent to be noted is that the cheque was  post  dated,
the transaction took place on 2nd April, 1992. The delivery  of  the  shares
and blank share transfer forms against the post dated  cheque  was  made  on
5.6.1992, the cheque was post dated of 20.06.1992. Before the  due  date  of
the cheque, the accused had called the Complainant’s witness Sriram-PW2  and
requested them  to  present  the  cheque  for  encashment  a  little  later.
Accordingly,  the  cheque  came  to  be  presented  on  29.6.1992.  It   was
dishonoured.  Again,  the  accused   requested   to   present   the   cheque
subsequently and  on  such  subsequent  presentation  also  the  cheque  was
dishonoured. Then he happened to promise to issue Pay order, which he  never
issued. He then delivered two cheques, one for Rs. 50,00,000/-  and  another
for Rs.33,00,000/-, both were dishonoured, not once but twice. This  conduct
of the accused shows a clear dishonest intention of misappropriation of  the
shares or its sell consideration.”
Since we were inclined to agree with  the  aforesaid  view  of  the  learned
Special Court on the basis whereof the  appellant  has  been  convicted  for
offence under Section 409 of the Indian Penal Code and sentenced  to  suffer
RI for six months and to pay fine of Rs.1,00,000/- only and  in  default  to
suffer RI for further three months, a  suggestion  was  made  by  Mr.  Rajiv
Dutta,  learned  senior  advocate  for  the  appellant,  on  the  basis   of
instructions received, that respondent bank should file a chart showing  the
amount payable by the appellant after deducting the amount that has  already
been paid and/or after taking into consideration the  adjustment  of  shares
already made.  In the light of such pro settlement stand on  behalf  of  the
appellant, an order to that effect was passed on 24th February, 2016.
On the next and final date of hearing a chart showing the amount payable  by
the appellant to the bank  was  produced  by  Ms.  Radhika  Gautam,  learned
counsel for the respondent bank.  As per the original  chart  Rs.58,10,000/-
is the principal amount decreed against  the  appellant  vide   order  dated
3.5.2007 passed by the Special Court, Mumbai in Civil Suit No.  6  of  2002.
It further transpires that interest has also been allowed  at  the  rate  of
18% per annum from 20th June, 1992.  After adjusting Rs.20,00,000/- paid  by
the appellant in 2003 by way of part settlement,  the  balance  amount  with
same rate of interest till 29th February, 2016 has resulted into  an  amount
of Rs.2,86,17,424 payable by the appellant to the Bank as on 29th  February,
2016.
On hearing counsel for  both  the  parties,  we  found  good  chances  of  a
settlement between the parties if a substantial amount could be paid to  the
bank by the appellant so as to virtually meet the entire decretal  liability
within a reasonable period of time. On behalf  of  the  appellant  a  strong
plea was made for working out such settlement but with a further  plea  that
in the larger interest of justice and considering his  precarious  financial
condition, the rate of interest may be reduced to a reasonable rate such  as
12% per annum.
On  our  persuasion,  learned  counsel  for  the  respondent-Bank   obtained
instructions and conveyed that the respondent-bank was willing  for  such  a
settlement.  It was also made clear that a reasonable rate  of  interest  as
may be determined by this Court will be acceptable to the respondent-Bank.
On recalculation with rate of interest at 12% per annum  and  adjustment  of
Rs.20,00,000/-  already  made,  according  to  learned   counsel   for   the
respondent-bank the total amount payable by the appellant  as  on  29.2.2016
would be Rs.2,03,10,400/- only.  Learned senior counsel  for  the  appellant
has conveyed acceptance but pleaded that the appellant be given  six  months
time to pay the decretal amount due  to  the  Bank  with  modified  rate  of
interest at the 12% per annum.  It was accepted on behalf of  the  appellant
that the entire dues calculated at the rate of 12% per annum shall  be  paid
in two installments, first one payable by end of three months and the  final
by end of six months from today.
In the aforesaid facts and circumstances, in the special  facts  and  larger
interest of justice this appeal is disposed of in the following terms:
Since the settlement indicated above have been accepted by the parties,  the
same is recorded as a part of this judgment and order.
The appellant shall pay the decretal amount with interest calculated at  the
rate of 12% per annum (in place of 18% per annum) from 20th June, 1992  with
adjustment of Rs.20,00,000/- already  paid  in  2003,  in  two  installments
payable in three months and six months time respectively.  On  such  payment
the sentence imposed upon the appellant shall stand reduced  to  the  period
already undergone along with fine of Rs.1,00,000/-.
The decree of the Special Court, Mumbai in Civil Suit No. 6 of 2002 will  be
treated to have been satisfied by the appellant on his  making  the  payment
of the settlement amount indicated above.
In case the settlement amount is not paid by the  appellant  in  the  manner
and to the extent indicated above, then after six months  this  order  shall
stand recalled and the appellant shall surrender to serve out the  remaining
period of sentence of RI for six months as per  the  judgment  under  appeal
which shall then stand confirmed by this Court.
The Appeal is disposed of accordingly.



                       .…………………………………….J.
                             [DIPAK MISRA]


                       ……………………………………..J.
                       [SHIVA KIRTI SINGH]
New Delhi.
April 13, 2016.
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