Cheque was issued from the personal account - company holds no liability for cheque bounce = the cheque which had been dishonoured may have been issued by the Respondent No.11 for discharging the dues of the Appellant No.1 Company and its Directors to the Respondent No.1 Company and the Respondent Company may have a good case against the Appellant No.1 Company for recovery of its dues before other fora, but it would not be sufficient to attract the provisions of Section 138 of the 1881 Act. The Appellant Company and its Directors cannot be made liable under Section 138 of the 1881 Act for a default committed by the Respondent No.11. An action in respect of a criminal or a quasi-criminal provision has to be strictly construed in keeping with the provisions alleged to have been violated. The proceedings in such matters are in personam and cannot be used to foist an offence on some other person, who under the statute was not liable for the commission of such offence.

                                   REPORTABLE

               IN THE SUPREME COURT OF INDIA

              CRIMINAL APPELLATE JURISDICTION

            CRIMINAL APPEAL NO. 1357 OF 2010
     (@ SPECIAL LEAVE PETITION(CRL) No.1361 of 2007)


P.J. Agro Tech Limited & Ors.                 ... Appellants

             Vs.

Water Base Limited                             ... Respondent



                     J U D G M E N T



ALTAMAS KABIR, J.



1.     Leave granted.


2.     The   Appellant   No.1   herein   is   an   agro-based

company having varied interests in providing feed

supplements, vaccines etc.        The Appellant Nos.2 and
                                                                         2


3 are the Managing Director and Chairperson of the

Appellant No.1 Company, which is based in Hyderabad

in    the    State   of        Andhra    Pradesh.         In    order    to

utilize the dealer network of the Appellant No.1

Company, the Respondent No.1 Company approached the

Appellants         for         distribution        of      prawn       feed

manufactured by it.              Inasmuch as, the said venture

did    not    turn       out     to   be    very       successful,       the

Appellant         No.1     Company         took    a      decision        to

discontinue its dealings with the Respondent No.1

Company. In furtherance of the above, the Appellant

Company      settled      all      its     outstandings         with     the

Respondent         No.1        Company      and        also     gave      an

authorization letter to the Respondent No.1 Company

to    collect      all     other        dues     directly       from    the

customers of the Appellant No.1 Company, who had

bought      the   feed    but     were     yet    to    pay    the     price

therefor.          The     concerned           customers       were     also

informed about the aforesaid decision. Thereafter,
                                                          3


on   4th   October,   2001,       the   Appellant    Company

requested the Respondent No.1 Company to coordinate

with one K. Balashankar Reddy, the then General

Manager at Nellore, for collecting the dues which

were still outstanding.          From the contents of the

said letter it appears that the Respondent Company

had accepted the said offer. However, in the course

of making collections from the customers directly,

it   was   found   that   some    of    its   employees   had

conspired with the said K. Balashankar Reddy and

had misappropriated some amounts of money and the

same was intimated by the Respondent No.1 Company

to the Appellant Company which asked the former to

take action against the said Balashankar Reddy and

its concerned employees.


3.     Subsequently, however, the Appellant and the

Proforma Respondents received a notice dated 13th

December, 2002, from the Respondent No.1 Company

purporting to be a notice under Section 138 of the
                                                                    4


Negotiable        Instruments          Act,    1881,      hereinafter

referred    to     as      "the     1881    Act",   wherein    it   was

stated that a cheque issued by K. Balashankar Reddy

on 25th November, 2002, drawn on the State Bank of

Hyderabad,       Nellore          Branch,     had    been     returned

dishonoured with the endorsement "Account closed".

The notice also demanded repayment of the cheque

amount from the Appellants.


4.     On receiving the said notice, the Appellants

replied to the same on 26th December, 2002, stating

that they never had any account with the State Bank

of Hyderabad and the cheque in question had not

been     issued       by      the     Appellant      No.1     Company.

Apparently, there was no response to the reply sent

on     behalf    of     the       Appellants       and   instead    the

Appellants were served with summons from the Court

of     XVIIIth     Metropolitan            Magistrate,       Saidapet,

Chennai, in Complaint Case No.1142 of 2003 based on

the     complaint       which        had    been     filed    by    the
                                                               5


Respondent      No.1      on   23rd   January,        2003.   The

Appellants     entered     appearance    in     the    aforesaid

complaint case and upon obtaining copies of the

complaint, they were surprised to learn that the

same had been filed against the Appellants on the

basis of a personal cheque issued by the Accused

No.11,    K.   Balashankar      Reddy,   from    out     of   his

personal savings bank account.              The said summons

was challenged by the Appellants and the Proforma

Respondents before the High Court on the ground

that the Company did not have any account with the

State Bank of Hyderabad and that the cheque had

been issued by K. Balashankar Reddy (Accused No.11)

from out of his personal savings bank account and

that   none    of   the   Directors   had   signed      the   said

cheque.    It was contended that the complaint was an

abuse of the process of Court and had been filed

with the sole motive of extracting money from the

Appellants.     On 14th September, 2006, the High Court
                                                                     6


dismissed the said petition holding that the cheque

which had been issued by K. Balashankar Reddy was

to meet the liability of the Appellant No.1 Company

and its Directors on their request and that as a

result     they    had     rightly     been      prosecuted       under

Section 138 of the 1881 Act.               The said order of the

High Court dismissing the Appellants' petition has

been challenged in the instant Appeal essentially

on the ground that the High Court had erred in

allowing     the       complaint     proceedings        to    continue

although the same were not maintainable against the

Appellants and the Proforma Respondents who were

not the drawers of the cheque, nor was the cheque

issued from any of their banks.


5.   Appearing for the Appellants, Mr.                       Siddharth

Dave,    learned       Advocate,     submitted     that       both   the

learned Magistrate as well as the High Court had

failed to consider in their proper perspective the

provisions        of    Section      138    of    the        Negotiable
                                                        7


Instruments Act, 1881.       It was pointed out by Mr.

Dave that in order to attract the provisions of

Section 138 of the 1881 Act, it was necessary that

a cheque would have to be drawn by a person on an

account maintained by him with his banker and if

the said cheque was dishonoured, it would be deemed

that   such   person   had   committed   an   offence   and

would, without prejudice to any other provision of

the 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.      Mr. Dave urged that in order to

maintain an action against a person under Section

138 of the 1881 Act, it would be necessary to show

that the cheque had been issued by such person on

an account maintained by him, which fact was absent

in the instant case as far as the Appellants are

concerned.     It was reiterated that the cheque in

question had been drawn by the Respondent No.11 in
                                                                 8


his     personal     capacity      on    his     bank    and    upon

dishonour      thereof,     only   he    could     be    prosecuted

under Section 138 of the 1881 Act.                It was further

submitted that the proceedings against the Company

and its Directors were not maintainable and the

High Court had erred in law in not quashing the

same.


6.    The stand taken on behalf of the Appellants was

vehemently opposed on behalf of the Respondent No.1

Company and a spirited attempt was made to involve

the Appellant No.1 Company and its Directors for

dishonour of the cheque which had been issued by

the Respondent No.11 from his own bank, which did

not attract the provisions of Section 138 of the

1881 Act against the Appellant No.1 Company and its

Directors.      It was urged that since the cheque had

been issued by the Respondent No.11 to liquidate

the     dues    of   the     Appellant         Company    and    its

Directors,     the   High    Court      had    quite    justifiably
                                                            9


refused     to    quash   the    complaint    filed    by   the

Respondent No.1 Company.


7.   From   the    submissions    made   on   behalf   of   the

respective parties, it is quite apparent that the

short point for decision in this Appeal is whether

a complaint under Section 138 of the 1881 Act would

be maintainable against a person who was not the

drawer of the cheque from an account maintained by

him, which ultimately came to be dishonoured on

presentation.


8.   Since the provisions of Section 138 of the 1881

Act have fallen for consideration in this Appeal,

the same are extracted hereinbelow :-


     "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
                                              10


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.
                                                        11



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


     From a reading of the said Section, it is very

clear   that   in   order   to   attract   the   provisions

thereof a cheque which is dishonoured will have to

be drawn by a person on an account maintained by

him with the 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.     It is only such a cheque which

is dishonoured which would attract the provisions

of Section 138 of the above Act against the drawer

of the cheque.


9.   In the instant case, the cheque which had been

dishonoured may have been issued by the Respondent

No.11 for discharging the dues of the Appellant

No.1 Company and its Directors to the Respondent
                                                              12


No.1 Company and the Respondent Company may have a

good case against the Appellant No.1 Company for

recovery   of    its   dues    before   other   fora,   but    it

would not be sufficient to attract the provisions

of Section 138 of the 1881 Act.                 The Appellant

Company and its Directors cannot be made liable

under Section 138 of the 1881 Act for a default

committed by the Respondent No.11.               An action in

respect of a criminal or a quasi-criminal provision

has to be strictly construed in keeping with the

provisions      alleged   to    have    been    violated.     The

proceedings in such matters are in personam and

cannot be used to foist an offence on some other

person, who under the statute was not liable for

the commission of such offence.


10. Having regard to the above, we allow the Appeal

and set aside the order passed by the High Court

and quash the complaint filed by the Respondent

No.1 Company as far as the Appellants and other
                                                                                     13


Proforma Respondents are concerned. In the event,

any of the Appellants and/or Proforma Respondents

have   been   released   on   bail,       they            shall               stand

discharged from their bail bonds forthwith.


11. The Appeal is allowed to the aforesaid extent.




                                          ................................................J.
                                                   (ALTAMAS KABIR)



                                     ................................................J.
                                 (DR.MUKUNDAKAM SHARMA)
New Delhi



Dated: 28.7.2010

The action of the Banks of freezing the bank accounts of APSC is wholly untenable in law, which must be set aside. By no stretch of imagination can it be assumed that the complete takeover of assets of the erstwhile APSC by TSC, on the ground that the State institution happens to be in Hyderabad, which is now a part of Telangana, was what the legislature had in contemplation while enacting the Reorganisation Act, 2014.- the High Court of judicature at Hyderabad for the States of Telangana and Andhra Pradesh in Writ Petition Nos. 1873 and 2882 of 2015, upholding the freezing of the bank accounts of APSC being unsustainable in law is liable to be set aside and set aside. Accordingly, the appeals filed by the State of Andhra Pradesh and APSC are allowed.= the action of freezing of the bank accounts of APSC is bad in law on account of the fact that what has been frozen is not just the pre bifurcation amount, but also the amounts collected by APSC for the period after the bifurcation in relation to the thirteen districts of the successor State of Andhra Pradesh. Accordingly, APSC must be allowed to operate their bank accounts in respect of the thirteen districts which fall within State of Andhra Pradesh now, in which the amounts collected post the date of bifurcation have been deposited. The assets of APSC of the undivided State of Andhra Pradesh, that is, assets existing up to the date of bifurcation may be divided between the two successor States in the population ratio of 58:42, as provided under Section 2(h) of the Reorganisation Act, 2014, if the two successor States are agreeable to the same. If the two successor States are unable to arrive at an agreement, the Central Government may constitute a committee, which may be directed to arrive at an agreement, in accordance with the provisions of the Reorganisation Act, 2014 within a period of two months from the date such representation is made to the Central Government.

|REPORTABLE        |

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                     CIVIL APPEAL NOS. 3019-3020 OF 2016
             (Arising out of SLP (C.) Nos. 14705-14706 of 2015)


ANDHRA PRADESH STATE
COUNCIL OF HIGHER EDUCATION              ……APPELLANT

                                     Vs.

UNION OF INDIA & ORS. ETC.               ……RESPONDENTS

                        WITH

            CIVIL APPEAL NO. 3021 OF 2016
                 (Arising out of SLP (C.) No.14712 of 2015)

                                 J U D G M E N T


V. GOPALA GOWDA, J.

    Leave granted in the Special Leave Petitions.
The present appeals arise out of the  common  impugned  judgment  and  order
dated 01.05.2015 passed by the High Court of  judicature  at  Hyderabad  for
the States of Telangana and Andhra Pradesh in Writ Petition  Nos.  1873  and
2882 of 2015, wherein it was held that  the  assets,  properties  and  funds
lying at the present location of the Andhra Pradesh State Education  Council
of Higher Education now belong exclusively to the Telangana State  Education
Council for Higher Education.



The relevant facts which are required for us to appreciate the  rival  legal
contentions are stated in brief hereunder:

The Andhra Pradesh State Council of Higher Education  (hereinafter  referred
to as the “APSC”) was constituted under Section  3  of  the  Andhra  Pradesh
State Council of Higher Education Act, 1988, to advise the State  government
in matters relating to Higher Education in the  State  and  to  oversee  its
development with Perspective Planning. The APSC continued carrying  out  the
various  functions  assigned  to  it  under  the  Act  of  1988,   including
conducting common entrance examinations for various courses in the State  of
Andhra Pradesh.
On 02.06.2014, the Andhra  Pradesh  Reorganisation  Act,  2014  (hereinafter
referred to as the  “Reorganisation  Act,  2014”)  came  into  force,  which
bifurcated the existing State of Andhra Pradesh into  two  separate  States,
namely, the State  of  Andhra  Pradesh  and  the  State  of  Telangana.  The
statement of objects and reasons of the Act provides, inter alia, as under:

 “a) it provides for the territories of the two successor states  of  Andhra
Pradesh and Telangana, and necessary provisions relating  to  representation
in  Parliament   and   State   Legislatures,   distribution   of   revenues,
apportionment of assets and liabilities, mechanisms for the  management  and
development of water  resources,  power  and  natural  resources  and  other
matters.
……
c) it provides that Hyderabad in the existing State of Andhra Pradesh  shall
be the common capital of both the successor States from  the  appointed  day
for a  period  not  exceeding  ten  years,  and  puts  in  place  legal  and
administrative measures to  ensure  that  both  the  State  Governments  can
function efficiently from the common capital……”

Section 75 of the Reorganisation Act, 2014 provides as under:
“75. Continuance of facilities in certain State institutions.
 (1) The Government  of  the  State  of  Andhra  Pradesh  or  the  State  of
Telangana, as the case  may  be,  shall,  in  respect  of  the  institutions
specified in the  Tenth  Schedule  to  this  Act,  located  in  that  State,
continue to provide facilities to the people of the other State which  shall
not, in any respect, be less favorable to such people than what  were  being
provided to them before the appointed day, for such  period  and  upon  such
terms  and  conditions  as  may  be  agreed  upon  between  the  two   State
Governments within a period of one year from the appointed  day  or,  if  no
agreement is reached within the said period, as may be  fixed  by  order  of
the Central Government.
(2) The Central Government may,  at  any  time  within  one  year  from  the
appointed day, by notification in  the  Official  Gazette,  specify  in  the
Tenth Schedule referred to in subsection (1) any other institution  existing
on the appointed day in the States of Andhra Pradesh and Telangana  and,  on
the issue of such notification, such Schedule shall be deemed to be  amended
by the inclusion of the said institution therein.”

APSC figures as item 27 in the Tenth Schedule  to  the  Reorganisation  Act,
2014. Thus, in terms of Section  75,  APSC  was  required  to  continue  its
functions in respect of both the States, i.e. Andhra Pradesh  and  Telangana
until an agreement was reached between the two successor States.
Vide G.O.M. No. 5 dated 02.08.2014, the Government of Telangana adapted  the
Act of 1988 in the following terms:

“Whereas by Section 101 of the  Andhra  Pradesh  Re-Organisation  Act,  2014
(Central Act No. 6 of 2014), the appropriate Government i.e.  the  State  of
Telangana is empowered by order, to make such adaptations and  modifications
of any law (as defined in section 2(f) of the  Act)made  before  02.06.2014,
whether by way of repeal or amendment as may be necessary or expedient,  for
the purpose of facilitating the application of such  law  in  the  State  of
Telangana before expiration of two  years  from  02.06.2014;  and  thereupon
every  such  law  shall  have  effect  subject  to   the   adaptations   and
modifications so made until altered, repealed  or  amended  by  a  competent
Legislature or other Competent Authority;
And whereas, it has become necessary  to  adapt  the  Andhra  Pradesh  State
Council of Higher Education Act, 1988 and the  Rules  and  Regulations  made
thereunder for the purpose of facilitating their application in relation  to
the State of Telangana……”

Thus, the Telangana State Council of Higher Education (hereinafter  referred
to as the “TSC”) came into existence to discharge  the  same  functions  for
the State of Telangana as the APSC for the State of Andhra Pradesh.
Pursuant to the creation of  the  TSC,  the  Secretary  to  the  Government,
Higher Education (UE) Department, Telangana, wrote  Letter  No.263/UE/2014-2
dated  05.09.2014,  to  the  Principal  Secretary  to   Government,   Higher
Education  (UE)  Department,  Andhra   Pradesh   outlining   a   provisional
allocation of assets as well as posts between  the two States, in  terms  of
the proposal already submitted by the APSC, to  divide  the  assets  in  the
ratio of population as 52:48, as provided for  under  Section  2(h)  of  the
Reorganisation Act, 2014. These were to include:

“
Distribution of posts in the ratio of 58:42

Allocation of fixed deposits

Allocation of bank balances in various accounts

Number of employees based on nativity

Number of vehicles

Number of equipments

Number of movable assets etc.”




The details of the proposed allocation are provided as under:
“                    Fixed Deposits
|S.No.   |Category   |Total Amount in   |58% to APSCHE   |42% to TSCHE     |
|        |           |Rs.               |                |                 |
|        |General    |607796365         |352521892       |255274473        |
|        |Accounts   |                  |                |                 |
|        |College    |61502021          |35671172        |25830849         |
|        |Accounts   |                  |                |                 |
|        |CETs       |489531581         |283928317       |205603264        |
|        |Accounts   |                  |                |                 |
|        |Total      |115,88,29,967     |67,21,21,381    |48,67,08,586     |


                      Bank Balances in various accounts
|S.No.     |Category    |Total Amount in |58% to APSCHE   |42% to TSCHE   |
|          |            |Rs.             |                |               |
|          |General     |18405959        |10675456        |7730503        |
|          |Accounts    |                |                |               |
|          |College     |164524435       |95424172        |69100263       |
|          |Accounts    |                |                |               |
|          |CETs        |1207229         |700193          |507036         |
|          |Accounts    |                |                |               |
|          |Total       |18,41,37,623    |10,67,99,821    |7,73,37,802    |

Cadre wise allocation of posts between APSCHE & TSCHE
|S.No.   |Post/Cadre               |Total         |Allocation of posts    |
|        |                         |Sanctioned    |after bifurcation      |
|        |                         |Posts         |                       |
|        |                         |              |58% to APSCHE |42% to  |
|        |                         |              |              |TSCHE   |
|1.      |Finance Officer          |1             |1             |0       |
|2       |Deputy Director          |1             |1             |0       |
|3       |Asst. Directors          |3             |2             |1       |
|4       |Lecturers                |4             |2             |2       |
|5       |Asst. Secretary          |1             |0             |1       |
|6       |Consultants              |3             |2             |1       |
|7       |Superintendent           |1             |1             |0       |
|8       |Private Secretary        |1             |0             |1       |
|9       |Senior Accountant        |3             |2             |1       |
|10      |Senior Steno             |1             |0             |1       |
|11      |Jr. Stenographer         |2             |1             |1       |
|12      |Jr. Assistant            |1             |0             |1       |
|13      |Clerk-cum-Typist         |1             |1             |0       |
|14      |Typist-cum-Asst.         |1             |0             |1       |
|15      |Computer Operator        |1             |1             |0       |
|16      |Data Entry Operator      |1             |1             |0       |
|17      |Drivers                  |3             |2             |1       |
|18      |Record Asst.             |1             |0             |1       |
|19      |Roneo Operator           |1             |1             |0       |
|20      |Office Subordinates      |3             |2             |1       |
|        |Total                    |34            |20            |14      |

                     Cadre wise posts to APSCHE & TSCHE
|S.No.         |Category      |Total Number  |58% to APSCHE |42% to TSCHE  |
|              |              |of posts      |              |              |
|1             |Gazetted      |10            |6             |4             |
|              |Cadres        |              |              |              |
|2             |Other cadres  |24            |14            |10            |
|              |Total         |34            |20            |14            |

                    Number of employees based on nativity
                          ( only Council employees)

|S.No.         |Category      |Total         |Andhra        |Telangana     |
|              |              |Employees     |              |              |
|              |              |Working       |              |              |
|1             |Gazetted      |4             |4             |0             |
|              |cadres        |              |              |              |
|2             |Other cadres  |19            |5             |14            |
|              |Total         |23            |9             |14            |

                 Number of vehicles (working and condemned)
|S.No.         |Category       |Total Vehicles|58% to APSCHE |42% to TSCHE  |
|1             |Serviceable    |4             |2             |2             |
|2             |Condemned      |5             |3             |2             |
|              |Total          |9             |5             |4             |

                            Number of Equipments
|S.No.         |Category      |Total         |58% to APSCHE |42% to TSCHE  |
|              |              |Equipments    |              |              |
|1             |Computers     |37            |21            |16            |
|2             |Printers      |18            |10            |8             |
|3             |Others        |27            |16            |11            |
|              |Total         |82            |47            |35            |

                          Number of Movable Assets
|S.No.             |Total Assets      |58% to APSCHE     |42% to TSCHE      |
|1                 |676               |392               |284               |


                                                                ”
On 30.10.2014, the Government of Telangana issued a  Circular  Memo  to  the
senior management of the banks in which the bank accounts of the  government
were operating to ensure that the  provisions  of  the  Reorganization  Act,
2014, especially with respect to the institutions listed in  Schedules  VII,
IX and X were not violated. On 05.01.2015, TSC sent a communication  to  the
Manager, Andhra Bank, Saifabad, Hyderabad Branch, stating that  TSC  is  the
successor organization to APSC as  per  the  Reorganisation  Act,  2014  and
requested the Bank to freeze the operation of Account No. 0533100110978  and
all other accounts operating in the name of APSC. The  Bank  sent  a  letter
dated 07.01.2015 to APSC, informing them about the letter from TSC.  In  its
reply dated 08.01.2015, APSC denied that TSC was its successor and  informed
the Bank that if it were to freeze its accounts, it would be constrained  to
take the appropriate legal action.  Accordingly,  the  Bank  sent  a  letter
dated 14.01.2015 to the TSC declining to freeze the  accounts  of  APSC.  On
28.01.2015, the State Bank  of  Hyderabad,  Shantinagar,  Hyderabad  Branch,
without giving prior notice to APSC froze the  accounts  at  the  behest  of
TSC.



Aggrieved of the said action of the Bank  in  freezing  the  accounts,  APSC
filed Writ Petition No. 1873  of  2015  before  the  High  Court  of  Andhra
Pradesh,  praying  for  the  action  of  the  State   Bank   of   Hyderabad,
Shantinagar, Hyderabad Branch  in  freezing  the  accounts  of  APSC  to  be
declared as illegal, arbitrary and contrary to  the  principles  of  natural
justice and setting it  aside.  The  State  of  Telangana  also  filed  Writ
Petition No. 2882 of 2015 praying for a declaration that APSC and the  State
of Andhra Pradesh be not allowed to withdraw money from  the  bank  accounts
of APSC. By way of the impugned common judgment and order dated  01.05.2015,
the High Court held that TSC would be allowed to operate the concerned  bank
accounts, and that the claim made by APSC was not sustainable since  it  was
now located in the State of Telangana. The High Court held as under:

“6. It is the settled position of  law  that  institutions  located  in  the
successor States are governed by the law  of  successor  State-laws  of  the
land namely, principle of land, known as lex situs.
7. Under Article 246 (2) & (3)  of  the  Constituion  of  India,  the  State
Legislatures are competent to  make  laws  in  respect  of  their  territory
covered by the entries  in  List-II  &  III  of  the  7th  schedule  of  the
Constitution. Therefore, in terms of  Section  75  of  the  Act,  2014,  the
specified institutions under the tenth schedule are governed by the laws  of
the  respective  States  where  they  are  located.  Having  regard  to  the
aforesaid legal position, the institutions specified in the  tenth  schedule
located in Telangana are governed by the law of the State of Telangana.
8…… The office of institution of petitioner No.2 formerly known as APSC,  is
now situated in the State of Telangana  at  Hyderabad.  Therefore,  the  law
enacted by the State of Telangana alone, necessarily,  has  application  for
administration of the institution. Consequently, any action taken  or  order
now passed by the erstwhile body of the institution specified  at  Item  No.
27 of tenth schedule is without jurisdiction and would be ultra vires.
9. The APSC, at the  instance  of  the  State  of  Andhra  Pradesh,  is  now
asserting its power and authority  and  physically  occupying  the  premises
without any authority of law. The APSC is not entitled to operate  the  bank
accounts  or  withdraw  any  amount.  Notwithstanding  the  aforesaid  legal
status, even after 2nd  June  2014,  the  APSC  has  withdrawn  considerable
amounts from the State Bank of Hyderabad, Shantinagar Branch, in respect  of
the above two saving bank accounts. As such, the  petitioner  No.2  wrote  a
letter to the State Bank of Hyderabad and Andhra Bank for  freezing  of  the
said accounts. Accordingly, a decision was taken by  the  Bank  and  rightly
so.”
                                  (emphasis laid by this Court)

On the question of ownership and control of the  erstwhile  APSC,  the  High
Court held as under:
“38.On a fair reading of Section 5 of the Act, 2014, as correctly  contended
by the learned A.G. for the state of Telangana, the State of Andhra  Pradesh
is a mere user of the city of Hyderabad for a maximum period of  ten  years.
It has no proprietary right, title and interest in this  city  and  none  of
the assets which belong to the erstwhile State of  Andhra  Pradesh,  located
at Hyderabad, can be claimed by  the  State  of  Andhra  Pradesh  except  in
accordance with the Act, 2014……
       XXX        XXX           XXX
40……Because of the adaptation with amendments in the eye of  law,  APSC  has
no existence, at least in Hyderabad, or in any part of Telangana State…
41. Under such circumstances, the assets and properties and  funds  whatever
lying at the present location of the APSC belong to TSC.”

The High Court held that the claim made by APSC is not  sustainable  in  law
and that present TSC  be  allowed  to  operate  the  bank  accounts  of  the
erstwhile APSC. Hence, the present appeals filed  by  the  State  of  Andhra
Pradesh and APSC.
Mr. P.P. Rao, learned senior  counsel  appearing  on  behalf  of  the  APSC,
contends that it is essential to first understand  the  correct  purport  of
Section 75 of the Reorganisation Act, 2014.  Section  75  (extracted  above)
deals  only  with  the  continuance  of  facilities  in   respect   of   the
Institutions specified in the Tenth  Schedule.  It  can,  by  no  means,  be
stretched to deal with either ‘apportionment of assets and  liabilities’  of
the Institutions specified in Tenth  Schedule  of  the  Reorganisation  Act,
2014 or allocation of the Institutions to one State or the other.

The learned senior counsel contends that the assets and liabilities  of  the
existing State are dealt with in Part-VI, consisting Sections 47-67  of  the
Reorganisation  Act,  2014,  under  heading  ‘apportionment  of  assets  and
liabilities’.

     Section 47 of the Reorganisation Act, 2014 reads as under:
“47. (1) The provisions  of  this  Part  shall  apply  in  relation  to  the
apportionment of the assets and liabilities of the existing State of  Andhra
Pradesh immediately before the appointed day.
    XXX           XXX            XXX
(3) The apportionment of assets and liabilities shall  be  subject  to  such
financial adjustment as may be necessary  to  secure  just,  reasonable  and
equitable apportionment of the assets and liabilities amongst the  successor
States.
(4) Any dispute regarding the amount of  financial  assets  and  liabilities
shall be settled through mutual agreement, failing which  by  order  by  the
Central Government on the advice of the Comptroller and  Auditor-General  of
India.”
                                  (emphasis laid by this Court)
Further, Section 49, which deals with Treasury and Bank Balances,  reads  as
under:
“49. The total of the cash balances in all treasuries of the existing  State
of Andhra Pradesh and the credit balances of the existing  State  of  Andhra
Pradesh with the Reserve Bank of India, the  State  Bank  of  India  or  any
other bank immediately before the appointed day  shall  be  divided  between
the States of Andhra Pradesh  and  Telangana  on  the  basis  of  population
ratio……”

Population ratio has been defined in Section 2(h) as under:
“2.
(h) “population ratio”, in relation to the  States  of  Andhra  Pradesh  and
Telangana, means the ratio of 58.32 : 41.68 as per 2011 Census”

The learned senior counsel contends that the  assets  of  APSC  need  to  be
divided in the population ratio  between  the  successor  States  of  Andhra
Pradesh and Telangana in a fair and equitable manner.
Mr. Basava Prabhu S. Patil, the learned senior counsel appearing  on  behalf
of the State of Andhra Pradesh  contends  that  the  impugned  judgment  and
order passed by the High Court is  erroneous  in  law.  The  learned  senior
counsel contends that the funds collected  by  APSC  post  the  creation  of
Telangana, i.e., post 02.06.2014 cannot be  appropriated  by  the  State  of
Telangana simply by way of the order of the High  Court,  on  the  basis  of
faulty interpretation of the provisions of the Reorganisation Act, 2014.  It
is submitted that this has effectively resulted in the  State  of  Telangana
stopping the State of  Andhra  Pradesh  from  utilising  the  funds  it  had
collected even post the bifurcation, in respect of  the  thirteen  districts
which formed part of its  territory.  The  learned  senior  counsel  further
draws our attention to Section 64 of the  Reorganisation  Act,  2014,  which
reads as under:

“64. Residuary Provision: The benefit or burden of any  asset  or  liability
of the existing State of Andhra Pradesh not  dealt  with  in  the  foregoing
provisions of this Part shall pass to the State of  Andhra  Pradesh  in  the
first instance, subject to such financial adjustment as may be  agreed  upon
between the States of Andhra Pradesh and Telangana or, in  default  of  such
agreement, as the Central Government may, by order, direct.”
                          (emphasis laid by this Court)

 The learned senior counsel further contends that the impugned judgment  and
order has been passed  on  a  faulty  consideration  of  the  provisions  of
Sections 5, 75 and 101 of the Reorganisation Act,  2014,  and  in  ignorance
and non consideration of the provisions of Part VI of the  Act,  which  deal
with apportionment of assets and liabilities.  The  learned  senior  counsel
contends that the overarching principle of the Reorganisation Act,  2014  is
a twofold basis  of  bifurcation,  namely  reasonableness  and  equity,  and
population ratio, and the same must be implemented in its true spirit.



 On the other hand,  Mr.  T.R.  Andhyarujina,  the  learned  senior  counsel
appearing on behalf of  the  State  of  Telangana  contends  that  the  term
‘facilities’ used in Section 75 of the Reorganisation Act, 2014 should  also
be  understood  to  include  assets  and  liabilities  of  those  respective
institutions. If an institution falls within  the  territory  of  Telangana,
then it cannot be disturbed, and the new  State  of  Andhra  Pradesh  cannot
stake any claim in it whatsoever.



 Mr. K. Ramakrishna  Reddi,  learned  Advocate  General  for  the  State  of
Telangana contends that the specified institutions in the tenth Schedule  of
the Reorganisation Act, 2014 are  partly  corporate  personalities,  in  the
nature of state owned institutions, without any commercial element  and  are
non-profit in nature. The learned Advocate General places  reliance  on  the
decision of this Court in the case of Electricity Employees Union  v.  Union
of India[1], wherein this Court, while interpreting the  provisions  of  the
Punjab Reorganisation Act held as under:

“11. Part VI of the Act as stated above deals with apportionment  of  assets
and liabilities  of  the  erstwhile  State  of  Punjab.  This  Part  is  not
applicable for apportionment of  assets  and  liabilities  of  the  existing
Punjab State Electricity Board, as there  is  specific  provision  for  this
purpose viz., Section 67  and  moreover  the  Board  has  a  separate  legal
entity.”


 Further, the learned Advocate General contends that  the  apportionment  of
assets and liabilities as per the Reorganisation Act, 2014 has been made  on
the basis of territory and location. The Tenth Schedule  state  institutions
have to be maintained as per the location of the  respective  States.  Thus,
purely on the basis of the principle of territoriality also, the  funds  and
assets of the erstwhile APSC now belong to the TSC.



 Mr. Ranjit Kumar, the learned Solicitor  General  appearing  on  behalf  of
Union of India, submits that APSC is a statutory body constituted under  the
Andhra Pradesh State Council for  Higher  Education  Act,  1988.  Since  the
Council has to discharge statutory responsibilities under the relevant  Act,
both the States should adopt the Act  of  1988  under  Section  101  of  the
Reorganisation Act, 2014, in the interest of students,  till  such  time  as
they enact their own laws. While the government  of  Telangana  has  already
adopted this, the Government of Andhra  Pradesh  is  still  to  do  so.  The
learned Solicitor General further submits that the  ownership  and  division
of the assets of the erstwhile APSC would be governed by Section 47  of  the
Reorganisation Act, 2014.



The learned Solicitor General draws our attention  to  a  crucial  provision
which governs the assets and liabilities of  the  institutions  incorporated
under Central or State Act, i.e. Section 52(4), which reads as under:

“52(4) Where anybody corporate constituted under a Central  Act,  State  Act
or Provincial Act for the existing State  of  Andhra  Pradesh  or  any  part
thereof has, by virtue of the provisions of Part II, become  an  inter-State
body corporate, the investments in, or loans or advances to, any  such  body
corporate by the existing State of Andhra Pradesh made before the  appointed
day shall, save as otherwise expressly provided by or  under  this  Act,  be
divided between the States of Andhra  Pradesh  and  Telangana  in  the  same
proportion in which the assets of the body corporate are divided  under  the
provisions of this Part.”
                          (emphasis laid by this Court)

     The learned Solicitor General further submits that since all  statutory
corporations  and  Public  Sector  Undertakings  are  the  instrumentalities
created  by  the  existing  State  of  Andhra  Pradesh  in  the  context  of
reorganization of the existing  State,  their  assets  and  liabilities  are
liable to be apportioned between the two States as per the population  ratio
stipulated under the provisions of Section 2(h) of the  Reorganisation  Act,
2014. The APSC, being an asset of the existing State, created by the Act  of
1988, it became necessary to provide for bifurcation of APSC and  allocation
of fixed deposits,  Bank  balances,  cadre  strength,  vehicles,  equipment,
movable assets etc. The learned senior counsel submits  that  subsequent  to
the impugned judgment and order passed by  the  High  Court,  TSC  has  been
operating the bank accounts of APSC,  which  includes  the  money  collected
from the thirteen districts of the successor State of Andhra Pradesh.
 We have heard the  learned  senior  counsel  appearing  on  behalf  of  the
parties. The short point which arises for our consideration is  whether  the
High Court was right in upholding the action of the Banks  in  freezing  the
accounts of APSC.



 We are unable to agree with the contentions advanced by the learned  senior
counsel appearing for the State of Telangana.



 The Constitution of India envisages a federal feature, which has been  held
to be a part of the basic structure of the Constitution  of  India,  as  has
been held by the seven Judge Bench of this Court in the case of S.R.  Bommai
& Ors. v. Union of India[2], wherein Justice K. Ramaswamy in his  concurring
opinion elaborated as under:

“247. Federalism envisaged in the Constitution of India is a  basic  feature
in which the Union of India is permanent within the territorial  limits  set
in Article 1 of the Constitution and is indestructible.  The  State  is  the
creature of the Constitution and the law made by Articles 2  to  4  with  no
territorial integrity, but a permanent entity with its boundaries  alterable
by a law  made  by  Parliament.  Neither  the  relative  importance  of  the
legislative entries in Schedule VII, Lists I and  II  of  the  Constitution,
nor the fiscal control by the Union per se are  decisive  to  conclude  that
the  Constitution  is  unitary.  The  respective  legislative   powers   are
traceable to Articles 245 to 254 of the  Constitution.  The  State  qua  the
Constitution is federal in structure and  independent  in  its  exercise  of
legislative  and  executive  power.  However,  being  the  creature  of  the
Constitution the State has no right to secede or claim sovereignty. Qua  the
Union, State is quasi-federal. Both are coordinating institutions and  ought
to exercise their  respective  powers  with  adjustment,  understanding  and
accommodation to render socio-economic and political justice to the  people,
to preserve and elongate the constitutional goals including secularism.

248.  The  preamble  of  the  Constitution  is  an  integral  part  of   the
Constitution. Democratic form of Government, federal  structure,  unity  and
integrity of the nation, secularism, socialism, social justice and  judicial
review are basic features of the Constitution.”
                       (emphasis laid by this Court)


 Article 3 of the Constitution of India confers the power  of  formation  of
new states on the Parliament. The scope of Article 3 was elaborated upon  by
a five judge bench of this Court in the case of  Raja  Ram  Pal  v.  Hon’ble
Speaker, Lok Sabha[3] as under:
“India is an indestructible Union  of  destructible  units.  Article  3  and
Article 4 of the Constitution together empower Parliament to  make  laws  to
form a new State by separation  of  the  territory  from  any  State  or  by
uniting two or more States or parts of States or by  uniting  any  territory
to a part of any State, and in so doing to increase or diminish the area  of
any State and to alter its boundaries……”

 The issue of bifurcation of states is both sensitive  as  well  as  tricky.
Adequate  care  has  to  be  taken  by  the   legislature   while   drafting
legislations such as  the  Reorganisation  Act,  2014  to  ensure  a  smooth
division of all assets, liabilities and funds between  the  states  to  make
sure that  the  interests  of  the  citizens  living  in  these  states  are
protected adequately. Therefore, care  must  be  taken  to  ensure  that  no
discrimination is done against either of the  successor  state.  Thus  while
interpreting statutes of such nature, the courts must ensure that all  parts
of the statute are given effect to. An eleven Judge Bench of this  Court  in
the case of H.H. Maharajadhiraja Madhav Rao Jivaji Rao  Scindia  Bahadur  of
Gwalior & Ors. v. Union of India[4] has held as under:
“The Court will interpret  a  statute  as  far  as  possible,  agreeably  to
justice and reason and that in case of  two  or  more  interpretations,  one
which is more reasonable and just will be adopted, for  there  is  always  a
presumption against the law maker  intending  injustice  and  unreason.  The
Court will avoid imputing  to  the  Legislature  an  intention  to  enact  a
provision which flouts notions of justice and norms of  fairplay,  unless  a
contrary  intention  is  manifest  from  words  plain  and  unambiguous.   A
provision in a statute will not be construed to defeat its manifest  purpose
and general values which animate its structure. In  an  avowedly  democratic
polity, statutory provisions ensuring  the  security  of  fundamental  human
rights including the right to property will, unless the contrary mandate  be
precise and unqualified, be construed liberally so as to uphold  the  right.
These rules apply to the  interpretation  of  Constitutional  and  statutory
provisions alike.”
                     (emphasis laid by this Court)


In the case of Prakash Kumar@ Prakash  Bhutto  v.  State  of  Gujarat[5],  a
constitution bench of this Court held as under:
“By now it is well settled Principle of Law that no part of  a  statute  and
no word of a statute can be construed in  isolation.  Statutes  have  to  be
construed so that every word has a place and everything is in its place.  It
is also trite that the statute or rules made thereunder should be read as  a
whole and one provision should be construed  with  reference  to  the  other
provision to make the provision consistent with  the  object  sought  to  be
achieved.
In Reserve Bank of India v. Peerless  General  Finance  and  Investment  Co.
Ltd. this Court said:
"33. Interpretation must depend on the text and the context.  They  are  the
basis of interpretation. One may well  say  if  the  text  is  the  texture,
context is  what  gives  the  colour.  Neither  can  be  ignored.  Both  are
important.  That  interpretation   is   best   which   makes   the   textual
interpretation match the contextual. A statute is best interpreted  when  we
know why it was enacted. With this knowledge,  the  statute  must  be  read,
first as a whole and then section by section, clause by  clause,  phrase  by
phrase and word by word. If a statute is looked at, in the  context  of  its
enactment, with  the  glasses  of  the  statute-  maker,  provided  by  such
context, its scheme, the sections,  clauses,  phrases  and  words  may  take
colour and appear different than when the statute is looked at  without  the
glasses provided by the context. With these glasses we must look at the  Act
as a whole and discover what each section,  each  clause,  each  phrase  and
each word is meant and designed to say as to fit  into  the  scheme  of  the
entire Act. No part of a statute and no word of a statute can  be  construed
in isolation. Statutes have to be construed so that every word has  a  place
and everything is in its place." "
                            (emphasis laid by this Court)


It is natural that when an existing State if  bifurcated  to  form  two  new
States,  there  must  be  an  equitable  bifurcation  of  the   assets   and
liabilities of the statutory bodies among the two successor States as  well,
to ensure welfare of the public at large residing within these territories.

In the instant case, the State of Telangana has claimed ownership  over  the
entire funds and assets of the (erstwhile) APSC. This could surely not  have
been the intention of the  legislature  while  enacting  the  Reorganisation
Act, 2014. The main thrust of  the  argument  of  both  the  learned  senior
counsel appearing on behalf of State of Telangana, as well as  the  impugned
judgment and order passed by the High Court is that the successor  State  of
Andhra Pradesh has absolutely no right over the institutions in the city  of
Hyderabad, by virtue of the fact  that  Hyderabad  falls  in  the  successor
State of Telangana. Heavy reliance has also been placed  on  Section  75  of
the Reorganisation Act, 2014, on the ground that  the  assets  belonging  to
the specified institutions of the Tenth Schedule exclusively belong  to  the
State institutions, since the Act does  not  provide  any  apportionment  to
them. We are wholly unable to agree with this contention advanced on  behalf
of the State of Telangana. If this contention is accepted, it  would  render
Section 47 of the Act, which provides for the apportionment  of  assets  and
liabilities among the successor States, useless and nugatory.

The action of the Banks of freezing the bank  accounts  of  APSC  is  wholly
untenable in law, which must be set aside. By no stretch of imagination  can
it be assumed that the complete takeover of assets of the erstwhile APSC  by
TSC, on the ground that the State institution happens to  be  in  Hyderabad,
which is  now  a  part  of  Telangana,  was  what  the  legislature  had  in
contemplation while enacting the Reorganisation Act, 2014.


For the reasons stated supra, the common impugned judgment and order  passed
by the High Court of judicature at Hyderabad for  the  States  of  Telangana
and Andhra Pradesh in Writ Petition Nos. 1873 and 2882  of  2015,  upholding
the freezing of the bank accounts of APSC  being  unsustainable  in  law  is
liable to be set aside and set aside. Accordingly, the appeals filed by  the
State of Andhra Pradesh and APSC are allowed.


Having allowed the appeal filed by APSC, we also hold  that  the  action  of
freezing of the bank accounts of APSC is bad in law on account of  the  fact
that what has been frozen is not just the pre bifurcation amount,  but  also
the amounts collected by APSC  for  the  period  after  the  bifurcation  in
relation to  the  thirteen  districts  of  the  successor  State  of  Andhra
Pradesh. Accordingly, APSC must be allowed to operate  their  bank  accounts
in respect of the thirteen districts  which  fall  within  State  of  Andhra
Pradesh now, in which the amounts collected post  the  date  of  bifurcation
have been deposited. The assets of APSC of the  undivided  State  of  Andhra
Pradesh, that is, assets existing up to  the  date  of  bifurcation  may  be
divided between the two successor States in the population ratio  of  58:42,
as provided under Section 2(h) of the Reorganisation Act, 2014, if  the  two
successor States are agreeable to the same. If the two successor States  are
unable to arrive at an agreement, the Central Government  may  constitute  a
committee, which may be directed to arrive at an  agreement,  in  accordance
with the provisions of the Reorganisation Act, 2014 within a period  of  two
months from the date such representation is made to the Central Government.


All pending applications are disposed of. No costs.
………………………………………J.
                                  [V. GOPALA GOWDA]



………………………………………J.
[ARUN MISHRA]
New Delhi,
Dated: March 18, 2016
-----------------------
[1]
      [2] (2000) 7 SCC 339
[3]
      [4] (1994) 3 SCC 1
[5]
      [6] (2007) 3 SCC 184
[7]
      [8] (1971) 1 SCC 85
[9]
      [10] (2005) 2 SCC 409

mitigating factor = the High Court interfered and reduced the period of imprisonment after noticing that the appellant has no criminal antecedents. Considering the said mitigating factor and also the fact that occurrence in question is of the year 2000 and the appellant has suffered agony of criminal trial and pendency of appeal for more than 15 years, in the facts of the case we are persuaded to further reduce the period of imprisonment from three years to rigorous imprisonment for two years. The amount of fine determined by the High Court as Rs.1 lac along with default clause is however left intact. With the aforesaid modification in sentence of imprisonment, the appeal is disposed of.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                  CRIMINAL APPEAL NO.    234        OF 2016
                [Arising out of S.L.P.(Crl.)No.1522 of 2016]

Paul Kuriakose                                           …..Appellant

      Versus

The Excise Inspector & Anr.                         …..Respondents

                               J U D G M E N T

SHIVA KIRTI SINGH, J.

Heard the parties.  Leave granted.
This appeal is directed against final judgment and  order  dated  25.11.2015
whereby the High Court of Kerala at Ernakulam has dismissed Criminal  Appeal
No.34/2006 preferred by the appellant by confirming his conviction  for  the
offence under Section 55(a) of the Abkari  Act.   However,  the  High  Court
granted a limited relief by reducing the sentence of  rigorous  imprisonment
for a period of five years to that for a period of three years and  also  by
reducing the amount of fine of Rs.5 lacs to Rs.1 lac with a  default  clause
of six months’ simple imprisonment.
Having heard the learned counsel for the rival parties  and  on  perusal  of
relevant materials on record including the judgment under  appeal,  we  find
that the High Court was correct in affirming the  conviction  because  right
from the initial stage when the car of the appellant  was  searched  leading
to recovery of 450 litres of spirit which on analysis was found to be  80.70
per cent by volume of Ethyl Alcohol, the  prosecution  has  proved  all  the
necessary ingredients of  the  offence  in  question  by  adducing  reliable
evidence.
Hence we also find no good ground to interfere with appellant’s conviction.
So far as the challenge to sentence is concerned, the High Court  interfered
and reduced the period of imprisonment after  noticing  that  the  appellant
has no criminal antecedents.  Considering the  said  mitigating  factor  and
also the fact that occurrence in question  is  of  the  year  2000  and  the
appellant has suffered agony of criminal trial and pendency  of  appeal  for
more than 15 years, in the facts of the case we  are  persuaded  to  further
reduce the period of imprisonment from three years to rigorous  imprisonment
for two years.  The amount of fine determined by the High Court as Rs.1  lac
along with default clause is however left intact.
With the aforesaid modification in sentence of imprisonment, the  appeal  is
disposed of.
                       .…………………………………….J.
                             [DIPAK MISRA]


                       ……………………………………..J.
                       [SHIVA KIRTI SINGH]
New Delhi.
March 18, 2016.
-----------------------
2

whether in view of payments or settlements made after the issuance of a cheque, a complainant can disclose the true state of affairs and issue a demand for a lesser amount and whether in such circumstances the criminal prosecution for dishonour of a cheque for higher amount is legally sustainable or not, did arise in this case.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                  CRIMINAL APPEAL NO.     235      OF 2016
                [Arising out of S.L.P.(Crl.)No.9288 of 2011]

M/s. Moser Baer Photo Voltaic Ltd.                       …..Appellant

      Versus

M/s. Photon Energy Systems Ltd. & Ors.         …..Respondents




                               J U D G M E N T



SHIVA KIRTI SINGH, J.

Leave granted.
In course of its business  of  supplying  solar  cells  and  laminates,  the
appellant-company made supplies to the respondent  no.1.   Respondent  nos.2
to 6 are the Chief Executive Officer; General  Manager  (Finance);  Ex-Chief
Executive Officer; Chairman;  and  the  Managing  Director  respectively  of
respondent no.1.  According to appellant’s case, against larger  outstanding
dues,  the  respondent  no.1  issued  a  cheque  dated  31st  May  2008  for
Rs.3,21,53,903/- only.  On a request that there was shortage of  some  funds
the cheque was not to be presented immediately.  There  were  some  disputes
between both the parties which were settled through a mutual meeting and  as
per minutes of meeting held  on  22nd  and  23rd  September  2008,  the  net
payable  amount  by   respondent   no.1   was   reduced   and   settled   at
Rs.2,87,09,640/-.
The cheque was presented with the bankers – M/s. HDFC but  it  was  returned
on 28.11.2008 with the remark – “funds insufficient”.  On  receipt  of  Memo
of Dishonour at its Delhi  office,  appellant  sent  a  legal  notice  dated
18.12.2008 demanding only the settled outstanding amount of Rs.2,87,09,640/-
 and not the cheque  amount  which  was  Rs.3,21,53,903/-.   On  19.12.2008,
respondent no.1 paid an amount of Rs.20 lacs towards its debt liability  and
in reply to the notice it denied the balance liability.  It also  adopted  a
further defence that the cheque was given for a  larger  amount  by  way  of
security and was not for any payable debt.  The criminal complaint filed  by
the appellant under Sections 138/141/142 of the Negotiable Instruments  Act,
1881 in the Court of  XI  Additional  Chief  Metropolitan  Magistrate,  City
Criminal Courts at Secunderabad  registered  as  C.C.  No.829  of  2009  was
entertained and non-bailable  warrant  was  ultimately  issued  against  the
accused persons on 04.03.2009.  The respondents could  not  succeed  against
the order issuing non-bailable warrant but their subsequent  petition  under
Section 482 of the Code of Criminal Procedure was  entertained  and  finally
allowed by the impugned order under appeal dated 12.10.2011.  As  a  result,
the criminal complaint of the appellant has been  dismissed  mainly  on  the
ground that the cheque amount was different  from  the  legally  enforceable
debt as per notice given by the appellant to the accused persons.
An interesting question of  law  as  to  whether  in  view  of  payments  or
settlements made after the issuance of a cheque, a complainant can  disclose
the true state of affairs and  issue  a  demand  for  a  lesser  amount  and
whether in such circumstances the criminal prosecution for  dishonour  of  a
cheque for higher amount is legally sustainable or not, did  arise  in  this
case.  However, on account of  subsequent  talks  between  the  parties,  an
amicable settlement has been arrived at and hence there  is  no  requirement
now to answer the aforesaid question of law in the present  proceedings  and
hence the same is left open for adjudication in any other appropriate case.
In the instant proceeding the parties have agreed that between  the  parties
the total outstanding amount shall be treated  as  Rs.1,80,00,000/-  (Rupees
one crore eighty lac only) and the same shall be paid by the respondents  to
the appellant in  regular  monthly  instalments  of  Rs.15,00,000/-  (Rupees
fifteen lac).  We accordingly direct that  the  respondents  shall  pay  the
first instalment of Rs.15 lac by first week of April  2016.   The  remaining
11 instalments of Rs.15 lac each shall be paid regularly by the  first  week
of each succeeding month.   On  admission  or  proof  of  such  payments  in
accordance with the aforesaid arrangement, the complaint  case  shall  stand
quashed if the entire amount of Rs.1,80,00,000/- is paid by the  respondents
to the appellant by the first week of March 2017.  Till then  the  complaint
case shall remain in abeyance.  It is made clear that if the entire  payment
is not made within the time indicated above  then  this  order  shall  stand
recalled and the complainant will be at liberty to move the concerned  court
for proceeding with the criminal case any time in April 2017  by  virtue  of
the present order.  The appeal is disposed of in the aforesaid terms.

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


                       ……………………………………..J.
                       [SHIVA KIRTI SINGH]

New Delhi.
March 18, 2016.
-----------------------
4

After hearing the arguments of both the sides we are not persuaded to interfere with the conviction of the appellant under Section 395 IPC and hence his conviction is affirmed. However, for the same very reasons as recorded by the trial court and finding that nothing was recovered from him, we are persuaded to reduce the sentence of imprisonment. We have been informed on the basis of facts mentioned in the Surrender Certificate dated 19.02.2016 available on record that the appellant has now remained in jail for three years and two months on account of continuous incarceration since his surrender on 28.07.2008. The certificate further discloses that fine of Rs.100/- has also been paid. In the facts of the case and considering the period already undergone by the appellant, we reduce the period of sentence imposed upon the appellant to the period already undergone, i.e., three years and two months of actual imprisonment. In case he is not required to be kept in prison in connection with any other matter, he should be released in the present matter forthwith. The appeal is allowed to the aforesaid extent only.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.209 OF 2016
                [Arising out of S.L.P.(Crl.)No.1671 of 2016]

Pareshbhai Annabhai Sonvane                        …..Appellant

      Versus

State of Gujarat & Ors.                                   …..Respondents




                               J U D G M E N T



SHIVA KIRTI SINGH, J.

The sole appellant was accused no.2 before  the  Sessions  Judge,  Surat  in
Sessions Case No.278/2008 along with three  other  co-accused  for  offences
under Sections 395,  397  and  504  of  the  IPC.   The  trial  court  found
sufficient evidence against accused nos.1 to  3  and  accordingly  convicted
them for the offence under  Section  395  of  the  IPC  while  holding  that
prosecution could not establish the other  charges.   Considering  that  the
value of the alleged loot including cash and  mobile  was  only  Rs.16,550/-
and the young age  of  the  accused,  the  trial  court  inflicted  rigorous
imprisonment of only one year along with fine of  Rs.100/-.   In  the  trial
court judgment dated 24.08.2011 the age of the appellant has  been  recorded
as 24 years and as such on the date of the alleged occurrence in  July  2008
he would be about 21-22 years of age.
The State of Gujarat opted to prefer Criminal Appeal No.1463 of  2011  under
Section 377 of the  Code  of  Criminal  Procedure  to  seek  enhancement  of
sentence imposed on the three convicts  including  the  appellant.   By  the
impugned judgment and order under appeal dated  21.09.2015  the  High  Court
came to the view that the trial court had rightly convicted the accused  but
had erred in imposing a sentence of imprisonment which was  clearly  on  the
lower side.  The High Court allowed the appeal to the  extent  of  enhancing
the sentence to five years of rigorous  imprisonment  along  with  the  fine
imposed by the trial court.
After hearing the arguments of both  the  sides  we  are  not  persuaded  to
interfere with the conviction of the appellant under  Section  395  IPC  and
hence his conviction is affirmed.  However, for the  same  very  reasons  as
recorded by the trial court and finding  that  nothing  was  recovered  from
him, we are persuaded to reduce the sentence of imprisonment.  We have  been
informed on the basis of facts mentioned in the Surrender Certificate  dated
19.02.2016 available on record that the appellant has now remained  in  jail
for three years and two months on account of continuous incarceration  since
his surrender on 28.07.2008.  The certificate further  discloses  that  fine
of Rs.100/- has also been paid.  In the facts of the  case  and  considering
the period already undergone by the  appellant,  we  reduce  the  period  of
sentence imposed upon the appellant to the period already  undergone,  i.e.,
three years and two months of  actual  imprisonment.   In  case  he  is  not
required to be kept in prison  in  connection  with  any  other  matter,  he
should be released in the present matter forthwith.  The appeal  is  allowed
to the aforesaid extent only.

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


                       ……………………………………..J.
                       [SHIVA KIRTI SINGH]

New Delhi.
March 18, 2016.


-----------------------
3