Insured Claim suit against non - delivery - the insured goods while in transit -non-delivery of goods - Trial court decreed the suit - High court reversed the decree held that “the liability of the Insurance Company is excluded when the ship owners are declared as insolvent.” as per clause 4 - Apex court set aside the High court order and held that mere notice of abandon the vessel as the value of repairs costs more than insured does not amount to bankruptcy unless any order was filed under their country laws - in the absence of record , it should not be presumed as bankruptcy as per clause 4 and much more in the absence of unseasworthiness to the knowledge of the plaintiff under clause 5 and when the insurance covered for non-delivery of goods , the defendant is liable to pay the insured claim along with interest and as such allowed the appeal by restoring the trial court judgement = Insured Claim suit against non - delivery - METAL POWDER COMPANY LTD. ... APPELLANT (S) VERSUS ORIENTAL INSURANCE CO. LTD. ... RESPONDENT (S) =2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41393

 Insured Claim suit against non - delivery - the insured goods while in transit -non-delivery of goods - Trial court decreed the suit - High court reversed the decree held that “the  liability  of
the Insurance Company is excluded when  the  ship  owners  are  declared  as
insolvent.” as per clause 4 - Apex court set aside the High court order and held that mere notice of abandon the vessel as the value of repairs costs more than insured does not amount to bankruptcy unless any order was filed under their country laws - in the absence of record , it should not be presumed as bankruptcy  as per clause 4 and much more  in the absence of unseasworthiness to the knowledge of the plaintiff under clause 5 and when the insurance covered for non-delivery of goods , the defendant is liable to pay the insured claim along with interest and as such allowed the appeal by restoring the trial court judgement = 

The plaintiff had purchased 15.06 metric tonnes of yellow  phosphorous  from
M/s. Metallgeseliachaft AG, Frankfurt, West Germany under  Invoice  No.  410
64821 dated 06.06.1983 for a value of US$ 23,946 C&F.   
The  said  commodity
was booked through M.V. “Palam Trader” to be delivered at  Bombay  Port  and
from the Bombay Port to the plaintiff’s factory at Maravankulam.  
The  goods
were insured for a sum  of  Rs.  2,65,000/-  under  Insurance  Policy  dated
24.06.1983 with the Divisional Office of the defendant-insurance company  at
Madurai.  The policy specifically included and covered amongst  other  risks
“loss due to non-delivery of the goods at Maravankulam.”     
While in transit the  ship  caught  fire  on  18.10.1983.   
The  first
intimation of the mishap was communicated to the plaintiff on 05.01.1984  by
Richard Hoggs International Limited, Greece who appear to be the  agents  of
the owners of the vessel “Palm Trader”.  
By the  aforesaid  intimation,  the
plaintiff was informed that the estimate of the cost of repairs to the  ship
are much higher than the ship’s  insured  value  and,  therefore,  the  ship
owners consider the  vessel  as  a  total  loss  and  had  given  notice  of
abandonment of the ship to the underwriters. 
The aforesaid facts  were  very
promptly communicated to the defendant insurance company  by  the  plaintiff
on 06.01.1984 which was followed by a claim to indemnify the  plaintiff  for
the value of the goods insured i.e. Rs. 2,65,000/-.  Thereafter, it  appears
that the defendant repudiated its liability  on  15.07.1985  on  the  ground
that the ship was abandoned by its owners due to bankruptcy and,  therefore,
the claim made by the plaintiff was covered  by  an  exclusion  clause  i.e.
Clause 4.6 of the Institute Cargo Clauses which formed a part of  the  terms
and conditions of the Insurance Policy.  Clause  4.6  is  to  the  following
effect:

           “4.6 Loss damage or expense arising from insolvency or financial
                 default of the owners managers charterers or  operators  of
                 the vessel.”
The learned Trial Court decreed the plaintiff’s suit for an amount  of
Rs. 3,38,053/- inclusive of interest  at  18%  per  annum  upto  30.09.1985.
Aggrieved, the Insurance Company filed a regular  first  appeal  before  the
Madras High Court which was allowed  by  the  impugned  judgment  and  order
dated 28.04.2006 on the ground that as per the terms and conditions  of  the
policy, the plaintiff was not entitled to its claim  as  “the  liability  of
the Insurance Company is excluded when  the  ship  owners  are  declared  as
insolvent.”  Aggrieved, the present appeal has been filed by the plaintiff.
=

   Under the Policy the risks covered are :

           “All  risks”  Marine,  theft,  pilferage,  non-delivery,   civil
           commotion, strikes, riots, breakage, damage, dentage, etc.”

11.    ‘Non-delivery’  being  a  specific  risk  covered  by  the  Insurance
Policy, the failure to deliver the cargo, as agreed,  would  clearly  amount
to loss of the subject matter insured.  
The situations in which the  insurer
could avoid  its  liability  are  contemplated  by  the  exclusion  clauses.
Clause 4.6 which was sought to be invoked by the defendant insurer  excludes
the liability of the insurer for loss or damage arising from the  insolvency
or financial default of the owners  etc.   
Insolvency  or  bankruptcy  would
always be  a  matter  of  authoritative  determination  under  the  relevant
municipal laws of a  country  and  certainly  not  a  matter  of  individual
perceptions and opinions.  
 No  material  to  establish  the  insolvency  or
bankruptcy of the owners is available on record.  
In fact, in  the  earliest
communication i.e. dated 05.01.1984, the plaintiff  was  informed  that  the
repair cost of the vessel having exceeded the insured value, the owners  had
decided to abandon the ship.  The said act on  the  part  of  owners  cannot
have the effect of their being adjudged  as  insolvents,  which  Clause  4.6
contemplates. 
The subsequent communication of the insurer  dated  14.10.1985
(Exbt. D-3), relied upon by the defendant, is a mere assertion  made  by  it
that the owners have become bankrupt.  
The same is  neither  conclusive  nor
determinative of the question and appears to have been made by  the  insurer
only to attract Clause 4.6.  
In the absence of any  material  whatsoever  to
show that Clause 4.6 can be attracted to the present case,  the  finding  to
the said effect, recorded by the High Court, cannot be sustained.

12.   Insofar as Clause 5.1 is concerned the same ex facie is not  attracted
inasmuch as no question of unseaworthiness of the vessel, much  less,  prior
knowledge of the plaintiff of such unseaworthiness can and  does  not  arise
in the present case so as to exclude the loss and  damage  suffered  by  the
plaintiff from the purview of the Insurance Cover as contemplated by  Clause
5.1.

13.   In view of the above, we  set  aside  the  judgment  and  order  dated
28.04.2006 passed by the High Court of Madras and restore the  judgment  and
decree dated 28.04.1989 passed by the learned  Trial  Court.   Consequently,
the appeal is  allowed.   If  the  amount  has  not  been  paid  till  date,
naturally, the same will carry interest at the rate awarded by  the  learned
Trial Court, namely, 18% per annum till date of payment.    
2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41393
P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA
                  NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL  NO. 481 OF 2009


METAL POWDER COMPANY LTD.         ...   APPELLANT (S)

                                   VERSUS

ORIENTAL INSURANCE CO. LTD.       ...   RESPONDENT (S)


                               J U D G M E N T

RANJAN GOGOI, J.


1.    This is a plaintiff’s appeal against a decree of reversal made by  the
High Court of Madras by its judgment and order dated 28.04.2006.

2.    The facts, which are not in dispute, are as follows:-

      The plaintiff is a company engaged in  the  manufacture  and  sale  of
metal  powders  and  red  phosphorous  having  its  manufacturing  unit  and
administrative office  at  Maravankulam,  Thirumangalam,  Madurai  District.
The plaintiff had purchased 15.06 metric tonnes of yellow  phosphorous  from
M/s. Metallgeseliachaft AG, Frankfurt, West Germany under  Invoice  No.  410
64821 dated 06.06.1983 for a value of US$ 23,946 C&F.   The  said  commodity
was booked through M.V. “Palam Trader” to be delivered at  Bombay  Port  and
from the Bombay Port to the plaintiff’s factory at Maravankulam.  The  goods
were insured for a sum  of  Rs.  2,65,000/-  under  Insurance  Policy  dated
24.06.1983 with the Divisional Office of the defendant-insurance company  at
Madurai.  The policy specifically included and covered amongst  other  risks
“loss due to non-delivery of the goods at Maravankulam.”

3.    While in transit the  ship  caught  fire  on  18.10.1983.   The  first
intimation of the mishap was communicated to the plaintiff on 05.01.1984  by
Richard Hoggs International Limited, Greece who appear to be the  agents  of
the owners of the vessel “Palm Trader”.  By the  aforesaid  intimation,  the
plaintiff was informed that the estimate of the cost of repairs to the  ship
are much higher than the ship’s  insured  value  and,  therefore,  the  ship
owners consider the  vessel  as  a  total  loss  and  had  given  notice  of
abandonment of the ship to the underwriters. The aforesaid facts  were  very
promptly communicated to the defendant insurance company  by  the  plaintiff
on 06.01.1984 which was followed by a claim to indemnify the  plaintiff  for
the value of the goods insured i.e. Rs. 2,65,000/-.  Thereafter, it  appears
that the defendant repudiated its liability  on  15.07.1985  on  the  ground
that the ship was abandoned by its owners due to bankruptcy and,  therefore,
the claim made by the plaintiff was covered  by  an  exclusion  clause  i.e.
Clause 4.6 of the Institute Cargo Clauses which formed a part of  the  terms
and conditions of the Insurance Policy.  Clause  4.6  is  to  the  following
effect:

           “4.6 Loss damage or expense arising from insolvency or financial
                 default of the owners managers charterers or  operators  of
                 the vessel.”

4.    Following the repudiation of its claim  legal  notice  was  issued  on
behalf of the plaintiff and as the same was not responded  to  the  suit  in
question was filed  claiming  the  value  of  the  goods  insured  i.e.  Rs.
2,65,000/- alongwith interest @ 18% per annum calculated from 21.03.1984  to
30.09.1985 which was quantified at Rs.73,053/-.

5.    The claim made by the plaintiff was resisted by the defendant  Insurer
by relying on the  exclusion  clause,  noticed  above.    According  to  the
defendant the ship was abandoned by  its  owners  on  account  of  financial
difficulties in meeting the cost of repairs.  The claim  was  also  resisted
by the defendant on the ground that there was no  damage  to  the  cargo  in
transit and in fact the defendant  had  arranged  with  a  third  party  for
transporting the cargo to its destination at an additional cost of  US$  900
to be paid by the plaintiff  which  offer  was,  however,  rejected  by  the
plaintiff.

6.    The learned Trial Court decreed the plaintiff’s suit for an amount  of
Rs. 3,38,053/- inclusive of interest  at  18%  per  annum  upto  30.09.1985.
Aggrieved, the Insurance Company filed a regular  first  appeal  before  the
Madras High Court which was allowed  by  the  impugned  judgment  and  order
dated 28.04.2006 on the ground that as per the terms and conditions  of  the
policy, the plaintiff was not entitled to its claim  as  “the  liability  of
the Insurance Company is excluded when  the  ship  owners  are  declared  as
insolvent.”  Aggrieved, the present appeal has been filed by the plaintiff.

7.    We have heard Mr. V. Prabhakar, learned  counsel  for  the  plaintiff-
appellant and Mr. M.K. Dua,  learned  counsel  for  the  defendant-Insurance
Company.

8.    Learned counsel for the appellant has strenuously urged that there  is
no material on record to  hold  that  the  owners  of  the  ship  have  been
adjudged as insolvent or bankrupt so as to attract exclusion clause  4.6  of
the Insurance Policy under which the liability of the  insurer  is  excluded
in case of loss or damage arising from the insolvency or  financial  default
of the owners etc. of the vessel.   Referring  to  the  communication  dated
05.01.1984 learned counsel has submitted that the reason for abandonment  of
the ship by the owners is that the estimate of the cost of repairs are  much
higher than the insured value of the ship.   It  is  pointed  out  that  the
letter dated 14.10.1985 (Exbt.D-37) relied upon by  the  defendant  to  show
financial default and bankruptcy of  the  owners  of  the  vessel  does  not
contain any basis to support the contention advanced.  Learned  counsel  has
further pointed out that the risks covered  by  the  Policy  included  ‘non-
delivery of the goods at Maravankulam’ and the  cargo  not  having  been  so
delivered, the defendant is clearly liable.  It is also contended  that  the
alleged arrangement made by the insurer to have the goods transported  by  a
third party on payment of additional cost of US$ 900 by  the  plaintiff  was
outside the scope of  the  agreement  between  the  parties  and  hence  was
rightly rejected by the plaintiff.

9.    On the other hand, learned counsel for the insurer has contended  that
under the Policy, the risk covered was in respect of the loss and damage  to
the subject matter insured.   It is pointed out that  in  the  present  case
the cargo which was insured was in perfect condition and no loss  or  damage
was caused to it.  Learned counsel has also relied  on  Clause  5.1  of  the
Institute Cargo Clauses (A), which formed a part of the insurance  agreement
between the parties, to contend that the  loss  or  damage  claimed  by  the
plaintiff is not covered by the policy.

10.   Under the Policy the risks covered are :

           “All  risks”  Marine,  theft,  pilferage,  non-delivery,   civil
           commotion, strikes, riots, breakage, damage, dentage, etc.”

11.    ‘Non-delivery’  being  a  specific  risk  covered  by  the  Insurance
Policy, the failure to deliver the cargo, as agreed,  would  clearly  amount
to loss of the subject matter insured.  The situations in which the  insurer
could avoid  its  liability  are  contemplated  by  the  exclusion  clauses.
Clause 4.6 which was sought to be invoked by the defendant insurer  excludes
the liability of the insurer for loss or damage arising from the  insolvency
or financial default of the owners  etc.   Insolvency  or  bankruptcy  would
always be  a  matter  of  authoritative  determination  under  the  relevant
municipal laws of a  country  and  certainly  not  a  matter  of  individual
perceptions and opinions.   No  material  to  establish  the  insolvency  or
bankruptcy of the owners is available on record.  In fact, in  the  earliest
communication i.e. dated 05.01.1984, the plaintiff  was  informed  that  the
repair cost of the vessel having exceeded the insured value, the owners  had
decided to abandon the ship.  The said act on  the  part  of  owners  cannot
have the effect of their being adjudged  as  insolvents,  which  Clause  4.6
contemplates. The subsequent communication of the insurer  dated  14.10.1985
(Exbt. D-3), relied upon by the defendant, is a mere assertion  made  by  it
that the owners have become bankrupt.  The same is  neither  conclusive  nor
determinative of the question and appears to have been made by  the  insurer
only to attract Clause 4.6.  In the absence of any  material  whatsoever  to
show that Clause 4.6 can be attracted to the present case,  the  finding  to
the said effect, recorded by the High Court, cannot be sustained.

12.   Insofar as Clause 5.1 is concerned the same ex facie is not  attracted
inasmuch as no question of unseaworthiness of the vessel, much  less,  prior
knowledge of the plaintiff of such unseaworthiness can and  does  not  arise
in the present case so as to exclude the loss and  damage  suffered  by  the
plaintiff from the purview of the Insurance Cover as contemplated by  Clause
5.1.

13.   In view of the above, we  set  aside  the  judgment  and  order  dated
28.04.2006 passed by the High Court of Madras and restore the  judgment  and
decree dated 28.04.1989 passed by the learned  Trial  Court.   Consequently,
the appeal is  allowed.   If  the  amount  has  not  been  paid  till  date,
naturally, the same will carry interest at the rate awarded by  the  learned
Trial Court, namely, 18% per annum till date of payment.


                                       ...…………………………CJI.
                                        [P. SATHASIVAM]


                                  .........………………………J.
                                        [RANJAN GOGOI]

                                                       …..........……………………J.
                                        [N.V. RAMANA]

NEW DELHI,
APRIL 7, 2014.
-----------------------
8

SEC. 138 OF N.I.ACT - whether the post-dated cheques issued by the appellants (hereinafter referred to as ‘purchasers’) as an advance payment in respect of purchase orders could be considered in discharge of legally enforceable debt or other liability, and, if so, whether the dishonour of such cheques amounts to an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the N.I. Act’). The Delhi High Court in the impugned order has held that to be so. - APEX COURT HELD THAT if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability.If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. = M/s. Indus Airways Pvt. Ltd. & Ors. … Appellants Versus M/s. Magnum Aviation Pvt. Ltd. & Anr. … Respondents = 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41392

    SEC. 138 OF N.I.ACT - whether  the  post-dated  cheques  issued  by   the appellants (hereinafter referred to as ‘purchasers’) as an  advance  payment in respect of purchase orders could be considered in  discharge  of  legally enforceable debt or other liability, and, if so, whether  the  dishonour  of such cheques amounts to an offence  under  Section  138  of  the  Negotiable Instruments Act, 1881 (for short, ‘the N.I. Act’).  The Delhi High Court  in
the impugned order has held that to be so. - APEX COURT HELD THAT  if a cheque is issued as an  advance  payment  for  purchase  of  the goods and for any reason purchase  order  is  not  carried  to  its  logical conclusion either because of its cancellation or otherwise and  material  or goods for which purchase order was placed is not supplied by  the  supplier, in our considered view, the cheque cannot be said to have been drawn for  an existing debt or liability.If  at
the time of entering into a contract, it is one of  the  conditions  of  the contract that the purchaser has to pay the amount in advance  and  there  is breach of such condition then purchaser may have to make good the loss  that might have occasioned to the seller but that  does  not  create  a  criminal liability under Section 138.   = 

   whether  the  post-dated  cheques  issued  by   the
appellants (hereinafter referred to as ‘purchasers’) as an  advance  payment
in respect of purchase orders could be considered in  discharge  of  legally
enforceable debt or other liability, and, if so, whether  the  dishonour  of
such cheques amounts to an offence  under  Section  138  of  the  Negotiable
Instruments Act, 1881 (for short, ‘the N.I. Act’).  The Delhi High Court  in
the impugned order has held that to be so. = 

   19.         The above reasoning of the Delhi High Court  is  clearly  flawed
inasmuch as it failed to keep in mind the  fine  distinction  between  civil
liability and criminal liability under Section 138 of the N.I. Act.  
 If  at
the time of entering into a contract, it is one of  the  conditions  of  the
contract that the purchaser has to pay the amount in advance  and  there  is
breach of such condition then purchaser may have to make good the loss  that
might have occasioned to the seller but that  does  not  create  a  criminal
liability under Section 138. 
For a criminal liability to be made  out  under
Section 138, there should be legally enforceable  debt  or  other  liability
subsisting on the date of drawal of the cheque. 
We are unable to accept  the
view of the Delhi High Court that the issuance  of  cheque  towards  advance
payment at the time of  signing  such  contract  has  to  be  considered  as
subsisting liability and dishonour of such  cheque  amounts  to  an  offence
under Section 138 of the N.I.  Act.   
The  Delhi  High  Court  has  traveled
beyond the scope of Section 138 of the N.I. Act by holding that the  purpose
of enacting Section 138 of the  N.I.  Act  would  stand  defeated  if  after
placing orders and  giving  advance  payments,  the  instructions  for  stop
payments are issued and orders are cancelled.  
In  what  we  have  discussed
above, if a cheque is issued as an  advance  payment  for  purchase  of  the
goods and for any reason purchase  order  is  not  carried  to  its  logical
conclusion either because of its cancellation or otherwise and  material  or
goods for which purchase order was placed is not supplied by  the  supplier,
in our considered view, the cheque cannot be said to have been drawn for  an
existing debt or liability.

20.         In our opinion, the view taken by Andhra Pradesh High  Court  in
Swastik Coaters2, Madras High Court in Balaji Seafoods4, Gujarat High  Court
in Shanku Concretes3 and Kerala High Court in Ullas5  is  the  correct  view
and accords with the scheme of Section 138 of the N.I. Act.

21.         The view taken by Delhi High Court is  plainly  wrong  and  does
not deserve acceptance.

22.         Criminal Appeal is, accordingly, allowed; the impugned  judgment
of Delhi High Court is set aside; and the order of  the  Sessions  Judge  is
restored.

2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41392
R.M. LODHA, SHIVA KIRTI SINGH
                                                   REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION


                    CRIMINAL  APPEAL NO.     830  OF 2014
                 (Arising out of SLP (Crl.) No.9752 of 2010)




M/s. Indus Airways Pvt. Ltd. & Ors.                      … Appellants

                                   Versus

M/s. Magnum Aviation Pvt. Ltd. & Anr.                    … Respondents


                                  JUDGMENT



R.M. LODHA, J.


            Leave granted.

2.          The only question that arises for consideration in  this  appeal
by  special  leave  is,  whether  the  post-dated  cheques  issued  by   the
appellants (hereinafter referred to as ‘purchasers’) as an  advance  payment
in respect of purchase orders could be considered in  discharge  of  legally
enforceable debt or other liability, and, if so, whether  the  dishonour  of
such cheques amounts to an offence  under  Section  138  of  the  Negotiable
Instruments Act, 1881 (for short, ‘the N.I. Act’).  The Delhi High Court  in
the impugned order has held that to be so.

3.          The brief facts are these:  On 19.02.2007  and  26.02.2007,  the
purchasers placed two purchase orders for supply of certain  aircraft  parts
with respondent No.1, M/s. Magnum Aviation Pvt. Ltd.  (hereinafter  referred
to as ‘supplier’).  In respect of  these  purchase  orders,  the  purchasers
also  issued  two  post-dated  cheques  dated  15.03.2007  for  a   sum   of
Rs.34,57,164/- and  20.03.2007  for  a  sum  of  Rs.15,91,820/-.   The  said
cheques were issued by way of advance payment for the purchase orders.   One
of the terms and conditions of the contract  was  that  the  entire  payment
would be given to the supplier in  advance.   The  supplier  says  that  the
advance payment was made by the purchasers as it had to  procure  the  parts
from abroad.

4.          These cheques got dishonoured when they were  presented  on  the
ground that the purchasers had stopped payment.

5.          It is not in dispute that the  supplier  received  letter  dated
22.03.2007  from  the  purchasers  cancelling  the   purchase   orders   and
requesting the supplier to return both the cheques.

6.          The supplier sent response to the  letter  dated  22.03.2007  on
23.03.2007 asking the purchasers as to when the supplier could  collect  the
payment.    Thereafter, on 12.04.2007, the supplier sent  a  notice  to  the
purchasers and then filed a complaint against the purchasers  under  Section
138 of the N.I. Act  before  the  Court  of  Additional  Chief  Metropolitan
Magistrate, New Delhi.

7.          On  22.05.2007,  the  concerned  Additional  Chief  Metropolitan
Magistrate took cognizance of the alleged offence and issued summons to  the
purchasers.

8.          The  purchasers  challenged  the  order  issuing  summons  in  a
revision petition under Section 397 of the Code of Criminal Procedure,  1973
(for short, ‘Code’).  The  Additional  Sessions  Judge,  after  hearing  the
parties, allowed the revision  petition  vide  order  dated  02.09.2008  and
quashed the process issued by the Additional Chief Metropolitan Magistrate.

9.          The supplier challenged the order  of  the  Additional  Sessions
Judge in a petition under Section 482 of the Code  before  the  High  Court.
The High Court allowed the petition, set aside the order of  the  Additional
Sessions Judge and restored the order of the Additional  Chief  Metropolitan
Magistrate issuing process to the purchasers.

10.         The Delhi High Court following  its  earlier  decision  in  Mojj
Engineering[1] held that the issuance of a cheque at  the  time  of  signing
such contract has to be  considered  against  a  liability,  as  the  amount
written in the cheque is payable by the person on the date mentioned in  the
cheque.

11.         Section 138 of the N.I. Act is as follows:
           “138. Dishonour of cheque for insufficiency, etc., of  funds  in
           the account.  - Where any cheque drawn by a person on an account
           maintained by him with a banker for payment  of  any  amount  of
           money to another  person  from  out  of  that  account  for  the
           discharge, in whole or in part, of any debt or other  liability,
           is returned by the bank unpaid, either because of the amount  of
           money standing to the credit of that account is insufficient  to
           honour the cheque or that it exceeds the amount arranged  to  be
           paid from that account by an agreement made with that bank, such
           person shall be deemed to have committed an offence  and  shall,
           without prejudice to  any  other  provisions  of  this  Act,  be
           punished with imprisonment for a term which may be  extended  to
           two years, or with fine which may extend to twice the amount  of
           the cheque, or with both:


                 Provided that nothing  contained  in  this  section  shall
           apply unless –


           (a) the cheque has been presented to the bank within a period of
           six months from the date on which it  is  drawn  or  within  the
           period of its validity, whichever is earlier;


           (b) the payee or the holder in due course of the cheque, as  the
           case may be, makes a demand for the payment of the  said  amount
           of money by giving a notice in writing, to  the  drawer  of  the
           cheque, within thirty days of the receipt of information by  him
           from the bank regarding the return of the cheque as unpaid; and


           (c) the drawer of such cheque fails to make the payment  of  the
           said amount of money to the payee or, as the case may be, to the
           holder in due course of the cheque, within fifteen days  of  the
           receipt of the said notice.


           Explanation. - For the purposes of this section, "debt or  other
           liability" means a legally enforceable debt or other liability.”

12.         The interpretation of the expression ‘for discharge of any  debt
or other liability’ occurring in Section 138 of the N.I. Act is  significant
and decisive of the matter.

13.         The explanation appended to Section 138 explains the meaning  of
the expression ‘debt or other liability’ for the  purpose  of  Section  138.
This expression  means  a  legally  enforceable  debt  or  other  liability.
Section 138 treats dishonoured cheque as an offence, if the cheque has  been
issued in discharge of any debt or other liability. The  explanation  leaves
no manner of doubt that to attract  an  offence  under  Section  138,  there
should be legally enforceable debt or  other  liability  subsisting  on  the
date of drawal of the cheque. In  other  words,  drawal  of  the  cheque  in
discharge of existing or past adjudicated liability  is  sine  qua  non  for
bringing an offence under Section 138. If a cheque is issued as  an  advance
payment for purchase of the goods and for any reason purchase order  is  not
carried to its logical conclusion either  because  of  its  cancellation  or
otherwise, and material or goods for which purchase order was placed is  not
supplied, in our considered view, the cheque cannot be  held  to  have  been
drawn for an exiting debt or liability. The payment by cheque in the  nature
of advance payment indicates that at the time of  drawal  of  cheque,  there
was no existing liability.

14.         In Swastik Coaters[2] , the single Judge of the  Andhra  Pradesh
High Court while considering the explanation to Section 138 held:
           “……..Explanation to Section 138 of  the  Negotiable  Instruments
           Act clearly makes it clear that the cheque shall  be  relateable
           to an enforceable liability or debt and as on the  date  of  the
           issuing of the cheque there was no  existing  liability  in  the
           sense that the title in the property had not passed  on  to  the
           accused since the goods were not delivered. ……..”


15.         The Gujarat High  Court  in  Shanku  Concretes[3]  dealing  with
Section 138 of the N.I. Act held that to attract Section  138  of  the  N.I.
Act, there must be subsisting liability or debt on the date when the  cheque
was delivered.  The very fact that the payment was  agreed  to  some  future
date and there was no debt or liability on  the  date  of  delivery  of  the
cheques would take the case out of the purview of Section 138  of  the  N.I.
Act.    While holding so, Gujarat High Court  followed  a  decision  of  the
Madras High Court in Balaji Seafoods[4].

16.         In Balaji Seafoods4, the Madras High Court held:

           “Section 138 of the Negotiable Instruments Act  makes  it  clear
           that where the cheque drawn by a person on an account maintained
           by him with a banker for payment  of  any  amount  of  money  to
           another person from out of that account for  the  discharge,  in
           whole or in part, of any debt or other liability, is returned by
           the bank unpaid, either because of the amount of money  standing
           to the credit of that account  is  insufficient  to  honour  the
           cheque or that it exceeds the amount arranged to  be  paid  from
           that account by an agreement made with that  bank,  such  person
           shall be deemed to have committed an offence under  Section  138
           of the Act. The explanation reads that for the purposes of  this
           section, ‘debt or other liability’ means a  legally  enforceable
           debt or liability.”

17.         The Kerala High Court in Ullas[5] had an  occasion  to  consider
Section 138 of the N.I. Act. In that case, the post-dated cheque was  issued
by the accused along with the order for  supply  of  goods.  The  supply  of
goods was not made by the complainant.  The  accused  first  instructed  the
bank to stop payment against the cheque and then requested  the  complainant
not to present the cheque as he had not supplied the goods. The  cheque  was
dishonoured. The single Judge of the  Kerala  High  Court  held,  “………Ext.P1
cheque cannot be stated to be one issued in discharge of  the  liability  to
the tune of the amount covered  by  it,  which  was  really  issued,  as  is
revealed by Ext. D1, as the price amount for 28  numbers  of  mixies,  which
the complainant had not supplied. …..”

18.         The reasoning of the Delhi High Court in the impugned  order  is
as follows:
           “8.   If at the time of entering into a contract it  is  one  of
           the conditions of the contract that the purchaser has to pay the
           amount in advance then advance payment is  a  liability  of  the
           purchaser. The seller of the items would not have  entered  into
           contract unless the advance payment was made to him. A condition
           of advance payment is normally put by the seller for the  reason
           that the purchaser may not later on retract and refuse  to  take
           the goods either manufactured  for  him  or  procured  for  him.
           Payment of cost of  the  goods  in  advance  being  one  of  the
           conditions of the contract becomes liability of  the  purchaser.
           The purchaser who had issued the cheque could have been asked to
           make payment either by draft or in cash. Since giving cheque  is
           a mode of payment like any other mode of payment, it is normally
           accepted as a payment. The issuance of a cheque at the  time  of
           signing such contract has to be considered against  a  liability
           as the amount written in the cheque is payable by the person  on
           the  date  mentioned  in  the  cheque.  Where  the   seller   or
           manufacturer, on the basis of cheques issued,  manufactures  the
           goods or procures the goods from outside, and has acted upon the
           contract, the liability of  the  purchaser  gets  fastened,  the
           moment the seller or manufacturer acts  upon  the  contract  and
           procures the goods. If for  any  reason,  the  seller  fails  to
           manufacture the goods or procure the  goods  it  is  only  under
           those circumstances that no liability is created. However, where
           the goods or raw material has been procured for the purchaser by
           seller or goods have been manufactured by the seller, it  cannot
           be said that the cheques were not issued against the  liability.
           I consider that if  the  liability  is  not  construed  in  this
           manner, the sole purpose of making dishonour of the cheque as an
           offence stands defeated.  The  purpose  of  making  or  enacting
           Section 138 of the N.I. Act was to enhance the acceptability  of
           cheque in settlement of commercial transactions, to infuse trust
           into commercial transactions and to make a cheque as a  reliable
           negotiable instrument and to see that the  cheques  of  business
           transactions are not  dishonoured.  The  purpose  of  Negotiable
           Instrument Act is to make an orderly statement of rules  of  law
           relating to negotiable instruments and to ensure that mercantile
           instruments should be equated with goods passing from  one  hand
           to other. The sole purpose of the Act would  stand  defeated  if
           after placing orders  and  giving  advance  payments,  the  stop
           payments are issued and orders are cancelled on  the  ground  of
           pricing  of   the   goods   as   was   done   in   this   case.”



19.         The above reasoning of the Delhi High Court  is  clearly  flawed
inasmuch as it failed to keep in mind the  fine  distinction  between  civil
liability and criminal liability under Section 138 of the N.I. Act.   If  at
the time of entering into a contract, it is one of  the  conditions  of  the
contract that the purchaser has to pay the amount in advance  and  there  is
breach of such condition then purchaser may have to make good the loss  that
might have occasioned to the seller but that  does  not  create  a  criminal
liability under Section 138. For a criminal liability to be made  out  under
Section 138, there should be legally enforceable  debt  or  other  liability
subsisting on the date of drawal of the cheque. We are unable to accept  the
view of the Delhi High Court that the issuance  of  cheque  towards  advance
payment at the time of  signing  such  contract  has  to  be  considered  as
subsisting liability and dishonour of such  cheque  amounts  to  an  offence
under Section 138 of the N.I.  Act.   The  Delhi  High  Court  has  traveled
beyond the scope of Section 138 of the N.I. Act by holding that the  purpose
of enacting Section 138 of the  N.I.  Act  would  stand  defeated  if  after
placing orders and  giving  advance  payments,  the  instructions  for  stop
payments are issued and orders are cancelled.  In  what  we  have  discussed
above, if a cheque is issued as an  advance  payment  for  purchase  of  the
goods and for any reason purchase  order  is  not  carried  to  its  logical
conclusion either because of its cancellation or otherwise and  material  or
goods for which purchase order was placed is not supplied by  the  supplier,
in our considered view, the cheque cannot be said to have been drawn for  an
existing debt or liability.

20.         In our opinion, the view taken by Andhra Pradesh High  Court  in
Swastik Coaters2, Madras High Court in Balaji Seafoods4, Gujarat High  Court
in Shanku Concretes3 and Kerala High Court in Ullas5  is  the  correct  view
and accords with the scheme of Section 138 of the N.I. Act.

21.         The view taken by Delhi High Court is  plainly  wrong  and  does
not deserve acceptance.

22.         Criminal Appeal is, accordingly, allowed; the impugned  judgment
of Delhi High Court is set aside; and the order of  the  Sessions  Judge  is
restored.


                                                            …..………………………….J.
       (R.M. Lodha)


                                        …..………………………….J. (Shiva Kirti Singh)

New Delhi,
April 7, 2014.
-----------------------
[1]    M/s. Mojj Engineering Systems Limited and others v. M/s. A.B. Sugars
Ltd. [154 (2008) Delhi Law
         Times 579]
[2]    M/s. Swastik Coaters Pvt. Ltd v. M/s. Deepak Brothers and others;
[1997 Cri. L.J. 1942 (AP)]
[3]    Shanku Concretes Pvt. Ltd. and others v. State of Gujarat and
another; [2000 Cri. L.J.1988 (Guj.)]
[4]    M/s. Balaji Seafoods Exports (India) Ltd. and another v. Mac
Industries Ltd.; [1999 (1) CTC 6]
[5]    Supply House, Represented by Managing Partner v. Ullas, Proprietor
Bright Agencies and another;
         [2006 Cri. L.J. 4330 (Kerala)]

-----------------------
10

Section 120-B IPC read with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act and Sections 420/471 IPC - Sec.482 of Cr.P.C.- as the parties out side compromised and asked to apply Nikhil Merchant and Gian Singh case to them - High court dismissed the writ and Apex court held that neither Nikhil Merchant (supra) nor Gian Singh (supra) can be understood to mean that in a case where charges are framed for commission of non-compoundable offences or for criminal conspiracy to commit offences under the PC Act, if the disputes between the parties are settled by payment of the amounts due, the criminal proceedings should invariably be quashed. What really follows from the decision in Gian Singh (supra) is that though quashing a non-compoundable offence under Section 482 CrPC, following a settlement between the parties, would not amount to circumvention of the provisions of Section 320 of the Code the exercise of the power under Section 482 will always depend on the facts of each case. = GOPAKUMAR B. NAIR ... APPELLANT (S) VERSUS C.B.I. & ANR. ... RESPONDENT (S)= 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41390

Section  120-B  IPC  read with Section  13(2)  read  with  Section  13(1)(d)   of  the  Prevention  of Corruption Act and Sections 420/471 IPC - Sec.482 of Cr.P.C.- as the parties out side compromised and asked to apply Nikhil Merchant and Gian Singh case to them - High court dismissed the writ and Apex court held that  neither Nikhil Merchant (supra) nor Gian Singh (supra) can  be understood to mean that in a case where charges are  framed  for  commission
of non-compoundable offences or for criminal conspiracy to  commit  offences under the PC Act, if  the  disputes  between  the  parties  are  settled  by payment of the amounts due, the criminal proceedings  should  invariably  be quashed. What really follows from the decision  in  Gian  Singh  (supra)  is that though quashing a non-compoundable  offence  under  Section  482  CrPC, following  a  settlement  between  the  parties,   would   not   amount   to circumvention of the provisions of Section 320 of the Code the  exercise  of the power under Section 482 will always depend on the facts  of  each  case. =

   neither Nikhil Merchant (supra) nor Gian Singh (supra) can  be
understood to mean that in a case where charges are  framed  for  commission
of non-compoundable offences or for criminal conspiracy to  commit  offences
under the PC Act, if  the  disputes  between  the  parties  are  settled  by
payment of the amounts due, the criminal proceedings  should  invariably  be
quashed. 
What really follows from the decision  in  Gian  Singh  (supra)  is
that though quashing a non-compoundable  offence  under  Section  482  CrPC,
following  a  settlement  between  the  parties,   would   not   amount   to
circumvention of the provisions of Section 320 of the Code the  exercise  of
the power under Section 482 will always depend on the facts  of  each  case.
Furthermore, in the exercise of such power, the note of caution  sounded  in
Gian Singh (supra) (para 61) must be kept in mind.  This, in  our  view,  is
the correct ratio of the decision in Gian Singh (supra).

14.   The aforesaid principle of law may now be applied to the facts of  the
present case.  At the very  outset  a  detailed  narration  of  the  charges
against the  accused-appellant  has  been  made.   The  appellant  has  been
charged with the offence of criminal conspiracy to commit the offence  under
Section 13(1)(d).  
He  is  also  substantively  charged  under  Section  420
(compoundable  with  the  leave  of  the  Court)  and  Section   471   (non-
compoundable).  
A careful consideration of  the  facts  of  the  case  would
indicate that unlike  in  Nikhil  Merchant  (supra)  no  conclusion  can  be
reached that the substratum of the charges against the accused-appellant  in
the present case is one of cheating nor are the facts similar  to  those  in
Narendra Lal Jain (supra) where the accused was charged under Section  120-B
read with Section 420 IPC only.  The offences are  certainly  more  serious;
they are not private in nature.  
The  charge  of  conspiracy  is  to  commit
offences under the Prevention of Corruption Act.  The accused has also  been
charged for commission of the substantive offence  under  Section  471  IPC.
Though the  amounts  due  have  been  paid  the  same  is  under  a  private
settlement between  the  parties  unlike  in  Nikhil  Merchant  (supra)  and
Narendra Lal Jain (supra) where the compromise was a part of the  decree  of
the Court. 
There is no acknowledgement on  the  part  of  the  bank  of  the
exoneration of the criminal liability of the  accused-appellant  unlike  the
terms of compromise decree in the aforesaid two cases.  
In the  totality  of
the facts stated above, if the High  Court  has  taken  the  view  that  the
exclusion spelt out in Gian Singh (supra) (para 61) applies to  the  present
case and on that basis had come to  the  conclusion  that  the  power  under
Section 482 CrPC should not be exercised to quash the criminal case  against
the accused, we cannot find any justification to  interfere  with  the  said
decision.  
The appeal filed by the accused is, therefore, dismissed and  the
order dated 25.06.2013 of the High Court, is affirmed.

2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41390
P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA
                          REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION
        CRIMINAL APPEAL  NO.          831                     OF 2014
       (Arising out of Special Leave Petition (Crl.) No. 8914 OF 2013)


GOPAKUMAR B. NAIR                        ...  APPELLANT (S)

                                   VERSUS

C.B.I. & ANR.                                  ...  RESPONDENT (S)


                               J U D G M E N T

RANJAN GOGOI, J.

1.    Leave granted.

2.    The appellant is the second accused (hereinafter referred  to  as  ‘A-
2’) in CC No. 48 of 2011 (RC 27(A)/2004) in the Court of the  Special  Judge
(SPE/CBI),  Thiruvananthapuram.   He  is  aggrieved  by  the  refusal  dated
25.06.2013 of the High Court of  Kerala  to  quash  the  aforesaid  criminal
proceeding  lodged  by  the  respondent-Central  Bureau   of   Investigation
(hereinafter for short ‘CBI’).

3.    The allegations made against the accused-appellant in  the  FIR  dated
30.11.2004 are to the effect that the accused-appellant alongwith  one  T.K.
Rajeev Kumar  (A-1),  Branch  Manager,  Indian  Overseas  Bank,  Killippalam
Branch, Trivandrum and C. Sivaramakrishna Pillai (A-3) (since deceased)  had
entered into a criminal conspiracy to obtain undue pecuniary  advantage  for
themselves.  Specifically,  it  was  alleged  that  in  furtherance  of  the
aforesaid criminal conspiracy the accused-appellant dishonestly applied  for
a car loan of Rs. 5 lakhs and opened a bank  account  bearing  No.  1277  on
24.08.2002  without  proper  introduction.   Thereafter,  according  to  the
prosecution,  the  accused-appellant  furnished  a  forged   agreement   for
purchase of a second hand Lancer Car  bearing  No.  KL-5L-7447  showing  the
value thereof as Rs. 6.65 lakhs though the accused-appellant  had  purchased
the said vehicle for Rs. 5.15 lakhs only.  It is further alleged  that  A-1,
by abusing his official position as Branch Manager,  dishonestly  sanctioned
Rs. 5 lakhs towards car loan without prerequisite sanction  inspection.   It
is also alleged that  A-1,  who  did  not  have  the  authority  to  do  so,
sanctioned education loan of Rs.4 lakhs under the Vidyajyothi Scheme to  the
accused-appellant for undergoing a course on  Digital  Film  Making  at  SAE
Technology College, Thiruvananthapuram.  According to the  prosecution,  the
accused-appellant  had  submitted  two  forged  receipts  of  the  aforesaid
college showing payment of Rs. 1,60,000/- as  fees  which  amount  was  duly
released in his favour though  he  had  actually  paid  Rs. 47,500/- to  the
college and had attended the course only for three days.

4.    It is the further case of the  prosecution  that  A-1,  without  being
authorised to do so, sanctioned cash credit facility of   Rs.  17  lakhs  to
one  M/s.  Focus  Infotainments  of  which  the  accused-appellant  is   the
proprietor and in this regard had obtained inflated value of the  collateral
security offered by  the  accused-appellant  from  deceased  accused,   A-3.
According to the prosecution in the valuation report submitted  by  A-3  the
value of the property offered as a collateral security by A-2 was  shown  at
Rs.17,34,675/- though  the  subsequent  valuation  thereof  by  an  approved
valuer was for Rs.8,56,600/-.  The prosecution had also alleged  that  after
sanction of the said loan, A-1 wiped out the  over  draft  facility  of  Rs.
13,94,000/-  given  to  the  accused-appellant  without  any  authority   by
transferring the said amount from the cash  credit  account  which  was  not
only against the banking procedure  but  had  also  caused  undue  pecuniary
advantage to the accused-appellant to the extent  of  Rs.  23,57,887/-.   On
the aforesaid facts, commission of offences under  Section  120-B  IPC  read
with Section  13(2)  read  with  Section  13(1)(d)   of  the  Prevention  of
Corruption Act and Sections 420/471 IPC was alleged insofar as the  accused-
appellant is concerned.

5.    Based on the  aforesaid  allegations  RC  Case  No.  27(A)/2004  dated
21.7.2005 was registered wherein chargesheet  had  been  filed  against  the
accused-appellant under the aforesaid sections of the Indian Penal  Code  as
well as the PC Act.  It is not in dispute that charges under  the  aforesaid
provisions of law have been framed  against  the  accused-appellant  in  the
court of the Special Judge (SPE/CBI), Thiruvananthapuram on 29.07.2013.

6.    Shri H.P. Raval, learned Senior Counsel  appearing  for  the  accused-
appellant had contended that all amounts due to the bank from  the  accused-
appellant has been tendered in full in an out of  court  settlement  between
the parties.  An acknowledgement dated 30.3.2009 has been issued  on  behalf
of the bank to the aforesaid effect wherein it is also stated that the  bank
has no further claims and charges against the accused-appellant in  view  of
the compromise reached.  Placing reliance on the decisions of this Court  in
Nikhil Merchant  vs. Central Bureau  of  Investigation  and  Another[1]  and
Gian Singh vs. State of Punjab and Another[2] and a recent pronouncement  in
CBI, ACB, Mumbai vs. Narendra Lal Jain & Ors.[3] Shri  Raval  had  contended
that in view of the settlement arrived at between the bank and the  accused-
appellant, the High Court ought to have exercised its  power  under  Section
482  Cr.P.C.  to  quash  the  criminal  proceedings  against  the   accused-
appellant.  Shri Raval has taken  the  Court  through  the  details  of  the
allegations made and the  charges  framed  to  contend  that  the  same  are
identical with those in Nikhil Merchant (supra).  The  charges  against  the
accused in both the cases are  identical;  the  same  has  been  quashed  in
Nikhil Merchant (supra) which decision has been endorsed by a  larger  Bench
in Gian Singh (supra) and  also  in  Narendra  Lal  Jain  (supra).   It  is,
therefore, contended that  the  criminal  proceeding  against  the  accused-
appellant is liable to be quashed and the impugned order passed by the  High
Court set aside.

7.    On the contrary, Shri Sidharth Luthra,  learned  Additional  Solicitor
General has submitted that the decision in Nikhil Merchant (supra) turns  on
its own facts and what has been approved in Gian  Singh  (supra)  is  merely
the principle of law laid down in  Nikhil  Merchant  (supra),  namely,  that
quashing a non-compoundable offence under  Section  482  Cr.P.C.,  following
the settlement between the parties, does not amount to  a  circumvention  of
the  provisions  of  Section  320  of  the  Code  of   Criminal   Procedure.
Notwithstanding the above, according to  Shri  Luthra,  whether  a  criminal
proceeding should or should not be interdicted midway  would  really  depend
on the facts of each case.  Shri Luthra has also drawn our attention to  the
observations made in para 61 of the judgment in Gian Singh  (supra)  wherein
this Court had carved out an exception by observing that,

      “heinous and serious offences of mental  depravity  or  offences  like
      murder, rape, dacoity, etc. cannot be fittingly  quashed  even  though
      the victim or victim’s  family  and  the  offender  have  settled  the
      dispute.  Such offences are not private in nature and have  a  serious
      impact on society.  Similarly, any compromise between the  victim  and
      the offender in relation to the offences under special  statutes  like
      the Prevention of Corruption Act or the offences committed  by  public
      servants while working in that  capacity, etc.; cannot provide for any
      basis for quashing criminal proceedings involving such offences.”

According to Shri Luthra in view of the  above  and  having  regard  to  the
charges framed in the present case the High Court  was  fully  justified  in
declining to quash the criminal proceeding against the accused.

8.    Insofar as the judgment in Narendra Lal  Jain  (supra)  is  concerned,
Shri Luthra has pointed out that in  the  aforesaid  case  the  accused  was
charged for the offence under Section 120B read with Section 420 of the  IPC
whereas in the present case the charges against  the  accused-appellant  are
under Section 120-B read with Section 13(2) read with  Section  13(1)(d)  of
the Prevention of Corruption Act and Section 420/471  of  the  Indian  Penal
Code.  It is submitted that the offences under the Prevention of  Corruption
Act and Section 471 of Indian Penal Code are not compoundable.

9.    We have also heard Shri P. Suresh Kumar, learned  senior  counsel  for
the respondent No.2-bank who had admitted the payment of the  entire  amount
due from the accused-appellant under the transaction in  question.   Learned
counsel has, however, submitted that in  written  acknowledgment  issued  by
the Bank there is no mention regarding  any  ‘settlement’  of  the  criminal
case against the accused-appellant insofar as the bank is concerned.

10.   The charges framed against the accused-appellant, it may be  repeated,
are under Section 120-B IPC  read  with  Section  13(2)  read  with  Section
13(1)(d) of the PC Act and Sections 420/471 of the IPC.  It is true that  in
Nikhil Merchant (supra) the charges framed against  the  accused  were  also
under Sections 120-B read with Section 5(2) and 5(1)  (d)  of  the  PC  Act,
1947 (Section 13(2) read with 13(1)(d) of the PC  Act,  1988)  and  Sections
420, 467, 468, 471 of the Indian Penal Code.  However, in  para  28  of  the
judgment in Nikhil Merchant (supra) on a consideration of  the  totality  of
the facts and circumstances in which the charges were  brought  against  the
accused this Court had come to the following conclusion:-
      “28. The basic intention of the accused in this case appears  to  have
      been to misrepresent the financial status of the Company, M/s  Neemuch
      Emballage Ltd., Mumbai, in order to avail of the credit facilities  to
      an extent to which the Company was not entitled. In other  words,  the
      main intention of the Company and its officers was to cheat  the  Bank
      and induce it to part with additional amounts of credit to  which  the
      Company was not otherwise entitled.”


      The Court, thereafter, took into account the  fact  that  the  dispute
between the parties had been settled/compromised and such compromise  formed
a part of the decree passed in the suit filed by the  bank.   After  holding
that the power under Section 482 Cr.P.C. to quash a criminal proceeding  was
not contingent on the provisions of Section 320  of  the  Code  of  Criminal
Procedure, and taking into account the conclusion recorded  in  para  28  of
the judgment, as noticed above, the Court ultimately concluded that  in  the
facts of the case (Nikhil Merchant) it  would  be  justified  to  quash  the
criminal proceeding.  In this regard, it  is  important  to  note  that  the
Court in Nikhil Merchant (supra)  had  come  to  the  conclusion  that  “the
dispute involved herein has  overtones  of  a  civil  dispute  with  certain
criminal overtones.”

11.   The decisions in Nikhil Merchant (supra) as  well  as  in  some  other
cases namely B.S. Joshi  vs.  State  of  Haryana[4]  and  Manoj  Sharma  vs.
State[5] were referred to a larger  Bench  in  Gian  Singh  (supra)  for  an
authoritative pronouncement as to whether in the said cases this  Court  had
“indirectly  permitted  compounding  of  non-compoundable  offences”.    The
larger Bench hearing the matter in its judgment2 took the view that the,
      “Quashing  of  offence  or  criminal  proceedings  on  the  ground  of
      settlement between an offender and victim is not  the  same  thing  as
      compounding  of  offence.  ……..  Strictly  speaking,  the   power   of
      compounding of  offences  given  to  a  court  under  Section  320  is
      materially different from the quashing of criminal proceedings by  the
      High   Court   in   exercise   of    its    inherent    jurisdiction.”
      [Para 57]

Eventually, in para 61 the note of caution  insofar  as  heinous  and  grave
offences and offences under special laws, as already  noticed,  was  sounded
and it was held that Nikhil Merchant  (supra),  B.S.  Joshi   vs.  State  of
Haryana (supra) and Manoj Sharma vs. State (supra) were correctly decided.

12.   Reference of a case to a larger Bench necessarily  has  to  be  for  a
reconsideration of the principle of law on which the case has  been  decided
and not the merits of the decision. The decision rendered by  any  Bench  is
final inter-parte, subject to the power of review and  the  curative  power.
Any other view  would  have  the  effect  of  conferring  some  kind  of  an
appellate  power  in  a  larger  Bench  of  this  Court  which   cannot   be
countenanced.  However, the principle of law on which the decision based  is
open to reconsideration by a larger Bench in an  appropriate  case.   It  is
from the aforesaid perspective that the reference in Gian Singh (supra)  has
to be understood, namely, whether quashing of a non-compoundable offence  on
the basis of a compromise/settlement of  the  dispute  between  the  parties
would be permissible and would not amount to overreaching the provisions  of
Section 320 of the Code  of  Criminal  Procedure.   In  fact,  this  is  the
question that was referred to the larger Bench in  Gian  Singh  (supra)  and
not the merits of the decision in Nikhil Merchant (supra).

13.   The decision in Gian Singh (supra) holding the  decision  rendered  in
Nikhil Merchant (supra) and other cases to be correct is  only  an  approval
of the principle of law enunciated in the said decisions i.e.  that  a  non-
compoundable offence can also be quashed  under  Section  482  CrPC  on  the
ground of a settlement between the offender and the victim.  It  is  not  an
affirmation, for there can be  none,  that  the  facts  in  Nikhil  Merchant
(supra) justified/called for the due application of the aforesaid  principle
of law. Also, neither Nikhil Merchant (supra) nor Gian Singh (supra) can  be
understood to mean that in a case where charges are  framed  for  commission
of non-compoundable offences or for criminal conspiracy to  commit  offences
under the PC Act, if  the  disputes  between  the  parties  are  settled  by
payment of the amounts due, the criminal proceedings  should  invariably  be
quashed. What really follows from the decision  in  Gian  Singh  (supra)  is
that though quashing a non-compoundable  offence  under  Section  482  CrPC,
following  a  settlement  between  the  parties,   would   not   amount   to
circumvention of the provisions of Section 320 of the Code the  exercise  of
the power under Section 482 will always depend on the facts  of  each  case.
Furthermore, in the exercise of such power, the note of caution  sounded  in
Gian Singh (supra) (para 61) must be kept in mind.  This, in  our  view,  is
the correct ratio of the decision in Gian Singh (supra).

14.   The aforesaid principle of law may now be applied to the facts of  the
present case.  At the very  outset  a  detailed  narration  of  the  charges
against the  accused-appellant  has  been  made.   The  appellant  has  been
charged with the offence of criminal conspiracy to commit the offence  under
Section 13(1)(d).  He  is  also  substantively  charged  under  Section  420
(compoundable  with  the  leave  of  the  Court)  and  Section   471   (non-
compoundable).  A careful consideration of  the  facts  of  the  case  would
indicate that unlike  in  Nikhil  Merchant  (supra)  no  conclusion  can  be
reached that the substratum of the charges against the accused-appellant  in
the present case is one of cheating nor are the facts similar  to  those  in
Narendra Lal Jain (supra) where the accused was charged under Section  120-B
read with Section 420 IPC only.  The offences are  certainly  more  serious;
they are not private in nature.  The  charge  of  conspiracy  is  to  commit
offences under the Prevention of Corruption Act.  The accused has also  been
charged for commission of the substantive offence  under  Section  471  IPC.
Though the  amounts  due  have  been  paid  the  same  is  under  a  private
settlement between  the  parties  unlike  in  Nikhil  Merchant  (supra)  and
Narendra Lal Jain (supra) where the compromise was a part of the  decree  of
the Court. There is no acknowledgement on  the  part  of  the  bank  of  the
exoneration of the criminal liability of the  accused-appellant  unlike  the
terms of compromise decree in the aforesaid two cases.  In the  totality  of
the facts stated above, if the High  Court  has  taken  the  view  that  the
exclusion spelt out in Gian Singh (supra) (para 61) applies to  the  present
case and on that basis had come to  the  conclusion  that  the  power  under
Section 482 CrPC should not be exercised to quash the criminal case  against
the accused, we cannot find any justification to  interfere  with  the  said
decision.  The appeal filed by the accused is, therefore, dismissed and  the
order dated 25.06.2013 of the High Court, is affirmed.

                                                           ...…………………………CJI.
                                         [P. SATHASIVAM]


                                                        .........………………………J.
                                         [RANJAN GOGOI]



                                                        .........………………………J.
                                         [N.V. RAMANA]
NEW DELHI,
APRIL 7, 2014.
-----------------------
[1]    (2008) 9 SCC 677
[2]    (2012) 10 SCC 303
[3]    2014 (3) SCALE 137
[4]    (2003) 4 SCC 675
[5]    (2008) 16 SCC 1
2      Gian Singh Vs. State of Punjab & Anr. (2012) 10 SCC 303

-----------------------
14

Accident claim - M.V. Act - Liability of Requisition department - State of Assam - Accident occurred before release the vehicle to the original owner - High court failed to take notice sec. 5 of Assam Act and exempted state government from liability to pay compensation - Apex court set aside the high court order and held that Therefore, Respondent No. 1 was squarely covered under the definition of “owner” as contained in Section 2(30) of the 1988 Act. The High Court failed to appreciate the underlying legislative intention in including in the definition of “owner” a person in possession of a vehicle either under an agreement of lease or agreement of hypothecation or under a hire-purchase agreement to the effect that a person in control and possession of the vehicle should be construed as the “owner” and not alone the registered owner. The High Court further failed to appreciate the legislative intention that the registered owner of the vehicle should not be held liable if the vehicle was not in his possession and control. The High Court also failed to appreciate that Section 146 of the 1988 Act requires that no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy meeting the requirements of Chapter XI of the 1988 Act and the State Government has violated the statutory provisions of the 1988 Act. The Tribunal also erred in accepting the allegation of Respondent No. 2 that the vehicle was released on the date of the accident at 10.30 a.m. and the accident occurred at 10.30 a.m. without any evidence even though in the claim petition, it was stated that the accident had occurred at 10.15 a.m. = Purnya Kala Devi .... Appellant(s) Versus State of Assam & Anr. .... Respondent(s)= 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41389

 Accident claim - M.V. Act - Liability of  Requisition department - State of Assam - Accident occurred before release the vehicle to the original owner - High court failed to take notice sec. 5 of  Assam Act and exempted state government from liability to pay compensation - Apex court set aside the high court order and held that  Therefore,  Respondent  No.  1  was  squarely covered under the definition of “owner” as contained  in  Section  2(30)  of
the  1988  Act.   The  High  Court  failed  to  appreciate  the   underlying legislative intention in including in the definition of “owner” a person  in possession of a vehicle either under an agreement of lease or  agreement  of hypothecation or under a  hire-purchase  agreement  to  the  effect  that  a person in control and possession of the vehicle should be construed  as  the
“owner” and not alone the registered owner.  The High Court  further  failed to appreciate the legislative intention that the  registered  owner  of  the vehicle should not be held liable if the vehicle was not in  his  possession and control.  The High Court also failed to appreciate that Section  146  of the 1988 Act requires that no person shall use or cause or allow  any  other
person to use a motor vehicle in a public place without an insurance  policy meeting the requirements of Chapter  XI  of  the  1988  Act  and  the  State Government has violated the statutory  provisions  of  the  1988  Act.   The Tribunal also erred in accepting the allegation of  Respondent  No.  2  that the vehicle was released on the date of the accident at 10.30 a.m.  and  the accident occurred at 10.30 a.m. without any  evidence  even  though  in  the claim petition, it was stated that the accident had occurred at 10.15 a.m.    =

the High Court  held  that  the  claimant/appellant  herein  is
entitled to a sum of Rs. 1,94,400/- as compensation for  the  death  of  her
husband in the motor vehicle accident and  the  same  is  payable  by  Abdul
Salam-who was the registered owner of the vehicle at the relevant  point  of
time and not by the State Government.=

 “5.    Release  from  requisition.  (1)  The  officer   or   authority
      requisitioning a vehicle may, at any time, release  the  vehicle  from
      requisition and when it is decided so to do, a notice in writing shall
      be served on the owner to take delivery of the vehicle on or with such
      date and from such place and such person as may be specified therein.”

12)   It is clear that Section  5(1)  of  the  Assam  Act  provides  that  a
vehicle may be released from requisition after service of notice in  writing
on the owner to take delivery of the vehicle on or with such date  and  from
such place or from such person as may be specified therein and  with  effect
from such date no liability for compensation shall lie with the  officer  or
authority.  In spite of our repeated  questions,  learned  counsel  for  the
State of Assam has brought to our notice only the  above-quoted  plea  taken
by the SDO (C) and has not placed any material, such as  notice  in  writing
served on the owner, to prove that the delivery of vehicle was  effected  on
such date and time in terms of Section 5(1) of the Assam Act.
13)   Though the above point was  pressed  into  service,  the  High  Court,
without adverting to Section 5 of the Assam Act, merely on the basis of  the
definition of “owner” as  contained  in  Section  2(30)  of  the  1988  Act,
mulcted the award payable by the owner  of  the  vehicle.   The  High  Court
failed to appreciate that at the relevant time  the  offending  vehicle  was
under the requisition of Respondent  No.  1  –  State  of  Assam  under  the
provisions of the Assam Act.   Therefore,  Respondent  No.  1  was  squarely
covered under the definition of “owner” as contained  in  Section  2(30)  of
the  1988  Act.   The  High  Court  failed  to  appreciate  the   underlying
legislative intention in including in the definition of “owner” a person  in
possession of a vehicle either under an agreement of lease or  agreement  of
hypothecation or under a  hire-purchase  agreement  to  the  effect  that  a
person in control and possession of the vehicle should be construed  as  the
“owner” and not alone the registered owner.  The High Court  further  failed
to appreciate the legislative intention that the  registered  owner  of  the
vehicle should not be held liable if the vehicle was not in  his  possession
and control.  The High Court also failed to appreciate that Section  146  of
the 1988 Act requires that no person shall use or cause or allow  any  other
person to use a motor vehicle in a public place without an insurance  policy
meeting the requirements of Chapter  XI  of  the  1988  Act  and  the  State
Government has violated the statutory  provisions  of  the  1988  Act.   The
Tribunal also erred in accepting the allegation of  Respondent  No.  2  that
the vehicle was released on the date of the accident at 10.30 a.m.  and  the
accident occurred at 10.30 a.m. without any  evidence  even  though  in  the
claim petition, it was stated that the accident had occurred at 10.15 a.m.    

In the light of what is stated above, we accept  the  stand  taken  by
the appellant and hold that the appellant/claimant is entitled to receive  a
sum of Rs. 1,94,400/- as fixed by the High Court with interest at  the  rate
of 9% per annum from the date of claim petition till  the  date  of  deposit
and the same is payable  by  the  State  of  Assam.   The  amount  shall  be
deposited before the Tribunal within a period of eight weeks from  the  date
of receipt of copy of this  order  and  on  such  deposit  being  made,  the
appellant – Purnya Kala Devi is permitted to withdraw the same.  The  appeal
is allowed on the above terms.

2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41389

P SATHASIVAM, RANJAN GOGOI, N.V. RAMANA

                                                              REPORTABLE



                        IN THE SUPREME COURT OF INDIA
                         CIVIL APPELLATE JURISDICTION

                       1 CIVIL APPEAL NO. 1672 OF 2010


Purnya Kala Devi                              .... Appellant(s)

            Versus

State of Assam & Anr.                              .... Respondent(s)


                               J U D G M E N T




P. Sathasivam, CJI.
1)    This appeal is directed against the impugned final judgment and  order
dated 04.01.2007 passed by the Gauhati High Court in MAC Appeal  No.  30  of
2003 whereby the High Court  held  that  the  claimant/appellant  herein  is
entitled to a sum of Rs. 1,94,400/- as compensation for  the  death  of  her
husband in the motor vehicle accident and  the  same  is  payable  by  Abdul
Salam-who was the registered owner of the vehicle at the relevant  point  of
time and not by the State Government.



2)    Brief Facts:

a)    The appellant/claimant is a widow and mother  of  four  children.   On
16.02.1993, at about 10:15 a.m., the  claimant’s  husband  died  in  a  road
accident by a speeding bus belonging  to  Md.  Abdul  Salam  which  was  not
insured and was under requisition of the State Government  at  the  relevant
time.

b)    The appellant filed MAC Case No. 34 of 1993 before the Motor  Accident
Claims  Tribunal  (in  short  ‘the  Tribunal’),   Darrang,   Mangaldai   for
compensation of  Rs.  2,00,000/-  against  the  registered  owner–Md.  Abdul
Salam. Sub Divisional Officer (Civil), Udalguri and the State of Assam  were
also impleded as parties in the said case.

c)    The registered owner of the vehicle filed his  reply  contending  that
at the relevant  time  the  vehicle  was  under  requisition  of  the  State
Government and, hence, the liability to pay  compensation  is  that  of  the
State Government.   The SDO, Udalguri,  Respondent  No.  2  herein,  on  his
behalf and on behalf of the State  Government,  filed  a  written  statement
denying any of its liability and averred that “the vehicle was  released  on
the same date at 10.30”.  The SDO further averred that “as  per  the  police
report, in the absence of driver, the Handiman of the  mini  bus  drove  the
bus without any permission from the police and occurred the accident”.

d)    By judgment dated 11.07.2002, the  Tribunal  directed  the  registered
owner to pay a sum of Rs. 1,41,400/- with interest at the  rate  of  9%  per
annum to the appellant/claimant and absolved Respondent Nos. 1 and 2  herein
from any liability.

e)    Being aggrieved by the said order, the appellant filed MAC Appeal  No.
30 of 2003 in the Gauhati High Court not only for  higher  compensation  but
also for absolving Respondent Nos. 1 and 2 herein from any liability.

f)    By impugned order dated 04.01.2007, though  the  High  Court  enhanced
the compensation by Rs. 50,000/-, it was  held  that  the  State  Government
cannot be held liable for paying compensation to  the  appellant  under  the
Motor Vehicles Act, 1988 (for short “the 1988 Act”)  because  the  liability
to pay compensation under  the  said  Act  is  upon  the  registered  owner,
insurer or driver of the vehicle or all or any of them.

g)    Aggrieved by such direction, the appellant has filed  this  appeal  by
way of special leave.

3)    Heard Mr. Jatin Zaveri, learned counsel  for  the  appellant  and  Mr.
Navnit Kumar, learned counsel for the respondents.

Contentions:

4)    The appellant has filed  the  above  appeal  contending  that  at  the
relevant time, the offending vehicle was  under  requisition  of  the  State
Government and hence, under the provisions  of  the  Assam  Requisition  and
Control of Vehicles Act, 1968 (for short “the Assam Act”), Respondent No.  1
is liable to pay compensation.

5)    On the other hand, it is the stand of Respondent  No.  1  that  unlike
the Motor Vehicles Act, 1939 (for short ‘the 1939 Act’),  unless  a  vehicle
is registered in the name of a person, he cannot be regarded  as  the  owner
of the vehicle under the 1988 Act.  Under Section 2(30) of the 1988  Act,  a
person, in order  to  be  regarded  as  an  owner,  must  have  the  vehicle
registered in his name and where such a person  is  a  minor,  his  guardian
would be regarded as the owner.  The said provision also indicates  that  in
relation to a motor vehicle, a person may be regarded  as  owner  though  he
may not be the registered owner of the vehicle provided he is in  possession
of the vehicle on the basis of a hire-purchase agreement or an agreement  of
lease or an agreement of hypothecation.  As such, Respondent No. 1,  neither
being a registered owner of the vehicle  nor  being  in  possession  of  the
vehicle pursuant to a hire-purchase agreement or an agreement  of  lease  or
an agreement of hypothecation, is not liable to pay any compensation to  the
appellant/claimant.  On facts, it is stated that the then  SDO(C),  Udalguri
requisitioned the  vehicle  (Bus)  bearing  Registration  No.  AMZ  6858  on
14.02.1993 which was placed on Government  Duty.  On  16.02.1993,  at  10.30
a.m., when the said vehicle was taken out of the Police Station  Campus  and
the driver took a turn  towards  Udalguri  Tiniali,  a  cyclist  named  Dhan
Bahadur Chetri (since deceased), a chowkidar at Udalguri Girls H.S.  School,
who was coming towards Udalguri town from his school, was  knocked  down  by
the said vehicle leading to his death.  The accident took  place  after  the
release of the said vehicle, i.e., on 16.02.1993 and the  offending  vehicle
was without insurance at the time when it was being plied and met  with  the
accident.  Under Section 168(1) of the 1988 Act, it is the insurer or  owner
or driver of the vehicle or any of them who could have been  liable  to  pay
compensation.   As  such,  the  State  Government  is  not  liable  to   pay
compensation to the appellant as it had only requisitioned the  vehicle  and
was neither the owner nor the driver of the offending  vehicle  in  view  of
the provision as envisaged in Section 2(30) of the 1988 Act.  The  offending
vehicle had already  been  released  by  the  State  Government  before  the
accident and the same was evident  from  the  records.   The  appellant  had
already  been  awarded  compensation  by  the  Tribunal  which  was  further
enhanced by the High Court  and  any  dispute  regarding  the  liability  of
paying compensation by the State Government  lies  with  the  owner  of  the
vehicle and the appellant has no legal right to  agitate  her  case  in  the
present facts and circumstances and remedy sought for by the  appellant  was
already allowed by the  Tribunal  and  the  High  Court.   Furthermore,  the
vehicle in question in the instant case was  driven  by  the  owner  of  the
vehicle without any valid insurance policy at  the  time  of  the  accident.
The High  Court  has  given  the  correct  interpretation  of  the  relevant
provisions of law.  The impugned judgment and order dated 04.01.2007  passed
by the High Court is justified on all accounts.

Discussion:

6)    Section 2(19) of the 1939 Act defined the expression “owner”  to  mean
where the person in possession of a motor vehicle is a minor,  the  guardian
of such minor and in relation to a motor vehicle, which is the subject of  a
hire-purchase agreement, the person in possession of the vehicle under  that
agreement.

7)    On 26.04.1969, the Assam Act came into force.   Section  2(b)  of  the
Assam Act defines the  expression  “owner”  almost  identically  as  defined
under Section 2(19) of the 1939 Act which is as under:-

      “2(b) “owner” includes where the person in possession of  the  vehicle
      is minor, the guardian of such a minor, and in relation to  a  vehicle
      which is the subject  of  a  hire-purchase  agreement  the  person  in
      possession of the vehicle under that agreement;”

8)    The 1939 Act was consolidated and amended by the  1988  Act.   Section
2(30) of the 1988 Act defines “owner” to mean as under:-

      “owner”  means  a  person  in  whose  name  a  motor  vehicle   stands
      registered, and where such person is a minor,  the  guardian  of  such
      minor, and in relation to a motor vehicle, which is the subject  of  a
      hire-purchase agreement, or an agreement of lease, or an agreement  of
      hypothecation, the person in possession  of  the  vehicle  under  that
      agreement.”

9)     It  is  not  in  dispute  that  on  14.02.1993,  the  SDO,   Udalguri
requisitioned a Bus belonging to  Md.  Abdul  Salam  under  the  Assam  Act.
While under requisition, on 16.02.1993, the Bus involved in an accident  and
killed the husband of the  appellant  at  10.15  a.m.   At  that  time,  the
vehicle was not insured.

10)   The appellant/claimant claimed compensation of Rs. 2,00,000/-  against
the owner of the vehicle, i.e., Md. Abdul Salam as  well  as  the  State  of
Assam-Respondent  No.  1  herein.  The  registered  owner  filed  the  reply
contending that Respondent No. 1 was liable to pay compensation.   The  SDO,
Udalguri, Respondent No.  2  herein,  filed  written  statement  before  the
Tribunal alleging that the vehicle was released on the date of  accident  at
10.30 a.m.  In this regard, it is useful to refer the  stand  taken  by  the
Sub-Divisional Officer (SDO)(C), Udalguri on behalf of the  State  of  Assam
in the following terms:

      “The fact of the case is that the vehicle was requisitioned by the Sub-
      Divisional Officer (Civil) Udalguri on public demand.  The vehicle was
      handed to O/C of Police Udalguri for their duties.

            As per police report in the absence of driver  the  Handiman  of
      the Mini Bus drove the bus without any permission from the police  and
      occurred the accident.

            The vehicle was released on same date at 10.30 and the  accident
      occurred at 10.30.”

11)   Though it was stated that the vehicle was released on  the  same  date
at 10.30 a.m., the State or its officers failed to  place  and  substantiate
the same by placing any material.  It is relevant to refer Section  5(1)  of
the Assam Act, which reads as under:

      “5.    Release  from  requisition.  (1)  The  officer   or   authority
      requisitioning a vehicle may, at any time, release  the  vehicle  from
      requisition and when it is decided so to do, a notice in writing shall
      be served on the owner to take delivery of the vehicle on or with such
      date and from such place and such person as may be specified therein.”

12)   It is clear that Section  5(1)  of  the  Assam  Act  provides  that  a
vehicle may be released from requisition after service of notice in  writing
on the owner to take delivery of the vehicle on or with such date  and  from
such place or from such person as may be specified therein and  with  effect
from such date no liability for compensation shall lie with the  officer  or
authority.  In spite of our repeated  questions,  learned  counsel  for  the
State of Assam has brought to our notice only the  above-quoted  plea  taken
by the SDO (C) and has not placed any material, such as  notice  in  writing
served on the owner, to prove that the delivery of vehicle was  effected  on
such date and time in terms of Section 5(1) of the Assam Act.
13)   Though the above point was  pressed  into  service,  the  High  Court,
without adverting to Section 5 of the Assam Act, merely on the basis of  the
definition of “owner” as  contained  in  Section  2(30)  of  the  1988  Act,
mulcted the award payable by the owner  of  the  vehicle.   The  High  Court
failed to appreciate that at the relevant time  the  offending  vehicle  was
under the requisition of Respondent  No.  1  –  State  of  Assam  under  the
provisions of the Assam Act.   Therefore,  Respondent  No.  1  was  squarely
covered under the definition of “owner” as contained  in  Section  2(30)  of
the  1988  Act.   The  High  Court  failed  to  appreciate  the   underlying
legislative intention in including in the definition of “owner” a person  in
possession of a vehicle either under an agreement of lease or  agreement  of
hypothecation or under a  hire-purchase  agreement  to  the  effect  that  a
person in control and possession of the vehicle should be construed  as  the
“owner” and not alone the registered owner.  The High Court  further  failed
to appreciate the legislative intention that the  registered  owner  of  the
vehicle should not be held liable if the vehicle was not in  his  possession
and control.  The High Court also failed to appreciate that Section  146  of
the 1988 Act requires that no person shall use or cause or allow  any  other
person to use a motor vehicle in a public place without an insurance  policy
meeting the requirements of Chapter  XI  of  the  1988  Act  and  the  State
Government has violated the statutory  provisions  of  the  1988  Act.   The
Tribunal also erred in accepting the allegation of  Respondent  No.  2  that
the vehicle was released on the date of the accident at 10.30 a.m.  and  the
accident occurred at 10.30 a.m. without any  evidence  even  though  in  the
claim petition, it was stated that the accident had occurred at 10.15 a.m.
14)   In the light of what is stated above, we accept  the  stand  taken  by
the appellant and hold that the appellant/claimant is entitled to receive  a
sum of Rs. 1,94,400/- as fixed by the High Court with interest at  the  rate
of 9% per annum from the date of claim petition till  the  date  of  deposit
and the same is payable  by  the  State  of  Assam.   The  amount  shall  be
deposited before the Tribunal within a period of eight weeks from  the  date
of receipt of copy of this  order  and  on  such  deposit  being  made,  the
appellant – Purnya Kala Devi is permitted to withdraw the same.  The  appeal
is allowed on the above terms.

                            ...…………….…………………………CJI


                                 (P. SATHASIVAM)






                              .…....…………………………………J.


                              (RANJAN GOGOI)




                              .…....…………………………………J.


                              (N.V. RAMANA)


NEW DELHI;
APRIL 07, 2014.
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