* Author
[2024] 1 S.C.R. 241 : 2024 INSC 16
Case Details
Satish P. Bhatt
v.
The State of Maharashtra & Anr
(Criminal Appeal No.42 of 2024)
03 January 2024
[Vikram Nath* and Rajesh Bindal, JJ.]
Issue for Consideration
The High Court took a firm stance against the appellant’s continued
failure to fulfil his financial obligations, culminating in the cancellation
of his bail and the order of suspension of sentence. Whether the
High Court was justified.
Headnotes
Judicial Directives – Disregard for – The High Court cancelled
the order of suspension of sentence and bail granted to the
appellant and intervenor (petitioner before the High Court) as
they violated the undertaking given before the High Court and
further violated the condition in an order granting extension
of time to comply – Propriety:
Held: Before the High Court the appellant and the intervenor filed
an undertaking based on a settlement on 03.07.2018 according to
which it was agreed that a total sum of Rs.4,63,50,000/- (Out of
the said amount Rs.73,50,000/- was already paid and remaining
amount of Rs.3,90,00,000/- was to be paid in instalments) would
be paid to the complainant-respondent no.2 – Based on the said
undertaking an interim protection was granted by suspending the
sentence of imprisonment and they were directed to be released
on bail on furnishing a personal bond – However, there was a
failure to fulfil financial obligations – Appellant and intervenor
made submissions before the Supreme Court regarding, who is
to pay how much amount – The Court not inclined to go into the
said question – The fact remains that the total amount agreed
to be paid has not been paid and as per the order of the High
Court, the revisionists (appellant and intervenor) being in default in
payment of the agreed amount, the interim protection granted by
way of bail and suspension of sentence, would stand withdrawn
without reference to the Court – No infirmity in the impugned
order of the High Court – The appeal is accordingly dismissed
242 [2024] 1 S.C.R.
DIGITAL SUPREME COURT REPORTS
with costs quantified at Rs. 5 lakhs to be paid to the respondent
No. 2 (Complainant). [Paras 7, 8, 17, 19]
List of Keywords
Disregard for judicial directives; undermining judicial efficacy.
Other Case Details Including Impugned Order and
Appearances
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.42 of
2024.
From the Judgment and Order dated 23.07.2019 of the High Court
of Judicature at Bombay in CRLAP No.244 of 2019.
Appearances:
Atul Babasaheb Dakh, Diganta Gogoi, Bitu Kumar Singh, Advs. for
the Appellant.
Aaditya Aniruddha Pande, Siddharth Dharmadhikari, Bharat Bagla,
Sourav Singh, Aditya Krishna, Siddharth Sangal, Ms. Richa Mishra,
Chirag Sharma, Ms. Nilanjani Tandon, Ms. Harshita Agrawal, Manoj
K. Mishra, Ghanshyam Upadhyay, A. Baskar, J.K. Mishra, Umesh
Dubey, Vishal, Ms. Madhulika, Advs. for the Respondents.
Judgment / Order of The Supreme Court
Judgment
Vikram Nath, J.
1. The facts of this case bring to light a situation marked by a persistent
disregard for judicial directives and a lackadaisical approach to legal
and financial obligations. The behaviour of the Petitioner stands
as a testament to how an individual’s nonchalant attitude towards
financial responsibilities and court orders can undermine the essence
of judicial efficacy.
2. The High Court took a firm stance against the appellant’s continued
failure to fulfil his financial obligations, culminating in the cancellation
of his bail and suspension of sentence. This decision, reflecting the
frustration of the legal system with repeated non-compliance, sets
the stage for our deliberation.
3. Leave granted.
[2024] 1 S.C.R. 243
SATISH P. BHATT v. THE STATE OF MAHARASHTRA & ANR
4. The present appeal assails the correctness of the judgment and
order dated 23.07.2019 passed by the High Court of Judicature at
Bombay cancelling the order of suspension of sentence and bail
granted to the appellant as also the intervenor (petitioner before
the High Court) vide order dated 03.07.2018 as they violated the
undertaking given before the High Court on 03.07.2018 and recorded
in the order of even date and further violated the condition contained
in paragraph 3 of the order dated 20.03.2019 granting extension
of time to comply.
5. The appellant-Satish P.Bhatt and the intervenor Vishwanath
Ramakrishna Nayak were Chairman-cum-Managing Director and
Vice-Chairman of a company by the name of M/s.Astral Glass
Private Limited (in short the AGPL). The company AGPL as also
the appellant and the intervenor were convicted for offence under
Section 138 of the Negotiable Instruments Act, 18811
vide judgment
and order of the Trial Court dated 26.08.2011 in three separate cases
and were awarded sentence of ten months with total liability of Rs.5
crores cumulatively in all the three cases. The operative portion of
the conviction and sentence as recorded by the Trial Court in one
of the cases is reproduced hereunder:
“I) Accused No.2 Mr.Satish Padamanath Bhat,
aged 54 years and accused no.3 Mr.Vishwanath
Ramakrsishna Nayak, aged 50 years both r/o.Borivali
(E), Mumbai-400 066 are hereby convicted vide
provisions under Section 255(2) of Cr.P.C. for offence
under Section 138 of Negotiable Instruments Act and
they are sentenced to suffer Simple Imprisonment for
10 (ten) months each.
II) Both accused shall also to pay in total Rs.1,10,00,000/-
(Rupees one crore and ten lakhs only) as compensation
to Complainant vide provisions under Section 357(3)
of Cr.P.C. within 3 months. In default to suffer further
Simple imprisonment for 6 (six) months each.
III) Cash security of Rs.3000/- of accused no.2 shall
stand continued till appeal period is over and P.R.
bond of accused no.3 stands cancelled….”
1 NI Act
244 [2024] 1 S.C.R.
DIGITAL SUPREME COURT REPORTS
6. Three appeals jointly filed by the appellant, the intervenor as also
AGPL were dismissed by the Sessions Court vide common judgment
and order dated 30.01.2014. The Sessions Court granted a month’s
time to surrender in order to undergo the sentence.
7. Aggrieved by the same, they preferred three revisions before the
High Court as originally there were three complaints. Before the High
Court the appellant and the intervenor filed an undertaking based on
a settlement on 03.07.2018 according to which it was agreed that
a total sum of Rs.4,63,50,000/- would be paid to the complainantrespondent no.2. Out of the said amount Rs.73,50,000/- had already
been paid before the appeal Court. As such, the remaining amount
of Rs.3,90,00,000/- was to be paid in installments. The payment
schedule was also laid down in paragraphs 6 and 7 whereas
paragraph 5 mentioned amount of settlement. Paragraph 8 of the
settlement mentioned that the said amount would be paid equally
by the appellant and the intervenor. However, in default of payment
by either of them as per their agreed share in the settlement they
would be held liable and would be prosecuted as per law.
8. Based on the undertaking, the learned Single Judge of the High
Court passed an order on the same day i.e. 03.07.2018 and granted
interim protection by suspending the sentence of imprisonment and
they were directed to be released on bail on furnishing a personal
bond in the sum of Rs.25,000/- with one or more sureties in the like
amount. The Court further directed that no further extension shall be
granted for payment of the settled amount and fixed 8th October,
2018 for reporting compliance.
9. As per the undertaking, Rs.2 crores was to be paid on or before
30th September, 2018, in addition to Rs.25 lakhs which was paid on
the date of passing of the order. Remaining amount of Rs. 1 crore
65 lakhs was to be paid on or before 15th March, 2019. Thereafter
the matter was taken up by the High Court on 20th March, 2019 by
which time they had paid only Rs.82 lakhs. Further time was sought
to pay the balance amount till 20th April, 2019. The counsel for the
complainant pointed out that the amount due was Rs.1,69,10,000/-.
The High Court on 20.03.2019 extended the time for payment of
Rs.1,69,10,000/- till 20th April, 2019 and further provided that if
the said amount was not paid then the order granting bail and also
suspending the sentence shall stand cancelled forthwith without
further reference to Court.
[2024] 1 S.C.R. 245
SATISH P. BHATT v. THE STATE OF MAHARASHTRA & ANR
10. Thereafter it appears that the present appellant Satish P.Bhatt filed
a criminal application in the pending revision on 16th April, 2019
stating that he had paid his share of Rs.1,95,00,000/- being 50% of
Rs.3,90,00,000/- as mentioned in the order dated 3rd July, 2018 and,
therefore, he may be absolved of the charges and acquitted. On the
said application, notice was issued to the complainant on 19th June,
2019 fixing 10th July, 2019. On that date, it was adjourned to 16th
July, 2019. Thereafter on 16th July it was adjourned to 23rd July,
2019. On 23rd July, 2019, the High Court passed the impugned order
cancelling the suspension of sentence and bail granted vide order
dated 3rd July, 2018 for non-compliance of the undertaking and in
view of the order dated 20th March, 2019 wherein while extending
the time it was observed that in case of default, the bail order and the
suspension of sentence order would stand automatically withdrawn
without reference to the Court.
11. Learned counsel for the appellant has sought to argue that out of
Rs.3,90,00,000/- his half share would amount to Rs.1,95,00,000/-
which has duly been paid and, therefore, the order of the High Court
cancelling his bail and suspension of sentence was not warranted
and deserves to be set aside.
12. On the other hand, learned counsel for the complainant has submitted
that as of date there is still an outstanding amount of Rs.83,10,000/-
and has, therefore, claimed that the complainant would be entitled
to receive Rs.83,10,000/- along with compound interest @ 12% p.a.
from 15th March, 2019 till actual payment is made along with costs
against the appellant as also the intervenor.
13. The intervenor has also filed his response and according to him the
partnership between the appellant and the intervenor was in the ratio
of 60:40 and that they had actually agreed to pay the settled amount
of Rs.4,63,50,000/- in that proportion as per their shares in the firm.
It is also his case that the amount of Rs.73,50,000 had been paid by
him alone prior to 03.07.2018 during the time when the appeal was
pending before the Sessions Court and, therefore, he was entitled
to adjustment of the said amount. Further his case is that out of the
settled amount to be paid to the complainant i.e. Rs.4,63,50,000/-
his share being 40%, the amount liable to be paid by him would be
Rs.1,85,00,000/-. As he had paid Rs.73,50,000 earlier he was liable
to pay a further amount of Rs.1,11,90,000/-. According to him, he
246 [2024] 1 S.C.R.
DIGITAL SUPREME COURT REPORTS
has paid the said amount of Rs.1,11,90,000/- after the order dated
03.07.2018. The outstanding amount of Rs.83,10,000/- falls in the
share of the appellant whose total liability being 60% of the settled
amount would come to Rs.2,78,10,000/- and he having paid only
Rs.1,95,00,000/- there is a shortfall of Rs.83,10,000/- which the
appellant should pay.
14. It is further submitted that the intervenor is being unnecessarily
suffering because of remaining amount not being paid by the
appellant. It is also the case of the intervenor that as per the e-mails
exchanged between them which have been duly placed on record
prior to the undertaking dated 03.07.2018, it was decided and agreed
between them that the amount would be paid as per their respective
shares i.e. in the ratio of 60:40. The said exchange of e-mails and
the draft settlement was also shared with the lawyer and the same
was duly accepted. The intervenor was not dealing with the lawyer
directly and it was the appellant who was dealing with the lawyer.
The appellant has mischievously and fraudulently altered the words
“as per the respective shares” by substituting it with “equally”. The
intervenor was hurriedly made to sign the undertaking on the date
it was being filed i.e. 03.07.2018 and he trusted the appellant and
the lawyer who was appearing for both of them. It is further stated
that the intervenor has also filed before the High Court by way of a
modification application to deal with this aspect of the matter, which
application is still pending.
15. We have perused the undertaking dated 03.07.2018 as also the order
dated 03.07.2018 and also the subsequent orders passed by the High
Court. It is apparent from the same that the complainant was entitled
to receive a total amount of Rs.4,63,50,000/-. The undertaking as
also the order dated 03.07.2018 clearly mention that both of them
will pay the amount equally as agreed by and between them and it
further contains a stipulation that in default of the payment by either
of them as per their agreed share in the settlement, they shall be
held liable and prosecuted as per law.
16. The settlement between the two directors i.e. the appellant and the
intervenor is inter se these two only and the complainant is not bound
by the same. Complainant’s agreement or consent was only to the
extent of accepting Rs.4,63,50,000/- only. He was not a signatory to
the agreement which was signed by the two parties. Admittedly, both
[2024] 1 S.C.R. 247
SATISH P. BHATT v. THE STATE OF MAHARASHTRA & ANR
the appellant and the intervenor were Chairman and Vice-Chairman
of the company AGPL and, therefore, were convicted by the Trial
Court and their conviction was affirmed by the Appellate Court.
17. We are not inclined to go into this question as to who is to pay how
much amount. The fact remains that the total amount agreed to
be paid has not been paid and as per the order of the High Court
dated 20.03.2019 the revisionists being in default in payment of the
agreed amount, the interim protection granted by way of bail and
suspension of sentence, would stand withdrawn without reference
to the Court. We find no infirmity in the impugned order.
18. There is a protection provided by this Court vide order dated
26.08.2019 regarding stay of arrest, as a result of which the appellant
and the intervenor have still not undergone the sentence. On the
other hand, the complainant has still not reaped not only the fruits
of the order dated 03.07.2018 but also of the order of the Trial Court
dated 26.08.2011. He agreed to receive a much lesser amount than
he was entitled to under the order of the Trial Court. He has been
litigating since 2007 almost 16 years by now.
19. We, accordingly, do not find any illegality in the order passed by the
High Court. The appeal is accordingly dismissed with costs quantified
at Rs. 5 lakhs to be paid to the respondent No. 2 (Complainant) within
four weeks from today. It is clarified that this amount of costs will not
be adjusted against the compensation awarded to the respondent
No.2 but will be in addition to it.
20. It is further directed that the appellant and the intervenor to surrender
within a period of four weeks from today to undergo the sentence. If
they do not surrender, the High Court to take appropriate coercive
measures to get the sentence executed. The revisions before the
High Court are still pending. The High Court will proceed to decide
the revisions as also pending applications if any and ensure that the
undertaking is fully complied with and the complainant is suitably
compensated for the further harassment caused.
21. Pending application(s), if any, stand disposed of.
Headnotes prepared by: Ankit Gyan Result of the case: Appeal
dismissed.
