No anticipatory bail =It is clear from the above decision that if anyone is declared as an absconder/proclaimed offender in terms of Section 82 of the Code, he is not entitled to the relief of anticipatory bail.-Even in the case of a business transaction also there may be offences under the IPC more particularly sections 406, 420, 467, 468, etc. What is required to be considered is the nature of allegation and the accusation and not that the nature of accusation is arising out of a business transaction. At this stage, it is required to be noted that respondent No.2 ­ accused has been charge­sheeted for the offences punishable under sections 406 and 420, etc. and a charge­sheet has been filed in the court of learned Magistrate Court.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1209 OF 2021

PREM SHANKAR PRASAD             .. APPELLANT(S)

VERSUS

THE STATE OF BIHAR & ANR.        .. RESPONDENT(S)

J U D G M E N T

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and   order   dated   14.08.2019   passed   by   the   High   Court   of

Judicature at Patna in Criminal Miscellaneous Application No.

50530 of 2019, by which the High Court has allowed the said

criminal miscellaneous application and has granted anticipatory

bail to respondent No.2 herein – accused, the original informant

– complainant has preferred the present appeal. 

1

2. That first information report came to be filed by the appellant

herein   against   respondent   No.2   with   Chapra   Town   Police

Station,   Saran   in   case   No.453   of   2018   for   the   offences

punishable under sections 406, 407, 468, 506 of the Indian

Penal Code, 1860. A warrant of arrest came to be issued by

learned   Chief   Judicial   Magistrate,   Saran,   Chapra   on

19.12.2018.   It   appears   that   thereafter   respondent   No.2   –

accused is absconding and concealing himself to avoid service

of   warrant   of   arrest.   Thereafter   learned   Chief   Judicial

Magistrate   issued   a   proclamation   against   respondent   No.2

under   section   82   Cr.PC.   Only   thereafter   and   issuance   of

proclamation   under   section   82   Cr.PC,   respondent   No.2   –

accused filed anticipatory bail application before learned Trial

Court. By a detailed order dated 29.01.2019 the learned Trial

Court   dismissed   the   said   anticipatory   bail   application   and

rejected the prayer for anticipatory bail on merits as well as on

the ground that as the accused is absconding and even the

proceedings under section 82/83 Cr.PC have been issued, the

accused is not entitled to the anticipatory bail. That thereafter

the   accused   approached   the   High   Court   by   way   of   present

2

application and despite the fact that it was specifically pointed

to the High Court that since the process of proclamation under

section 82 & 83 Cr.PC have been issued, the accused should

not be allowed the privilege of anticipatory bail, ignoring the

aforesaid relevant aspect, by the impugned judgment and order

the   High   Court   has   allowed   the   said   anticipatory   bail   by

observing that in the event of his arrest/surrender within six

weeks   in   the   Court   below,   he   may   be   released   on   bail   on

furnishing bail bond of Rs.10,000/­ with two sureties of the like

amount each to the satisfaction of the learned Chief Judicial

Magistrate, Saran, Chapra and subject to the conditions as laiddown under section 438 (2) of Cr.PC. 

3. Feeling aggrieved and dissatisfied with the impugned judgment

and order passed by the High Court granting anticipatory bail to

respondent No.2 – accused, the original informant/complainant

– appellant has preferred the present appeal. 

4. Shri Rituraj Biswas, learned Advocate appearing on behalf of

the appellant has vehemently submitted that in the facts and

3

circumstances of the case, the High Court has committed a

grave error in allowing the anticipatory bail application. 

4.1 It is submitted that considering the fact that the accused was

avoiding   the   arrest   and   even   did   not   co­operate   with

investigating agency and even after the arrest warrants were

issued, the proceedings under sections 82­83 of Cr.PC were

initiated, the High Court ought not to allow the anticipatory bail

application. 

4.2 It   is   submitted   that   though   the   factum   of   initiation   of

proceedings under Section 82­83 of Cr.PC was pointed out, the

High Court has simply ignored the same. 

4.3 It is further submitted that even the High Court has not at all

considered the seriousness of the offences alleged namely the

offences under sections 406, 420 of IPC, which were in detail

considered   by   the   learned   Trial   Court   while   rejecting   the

anticipatory bail application.     

4.4 It is submitted that the High Court has granted the anticipatory

bail   to   respondent   No.2   solely   observing   that   the   nature   of

accusation arising out of a business transaction. It is submitted

4

that   merely   because   it   was   a   business   transaction,   without

further considering the nature of allegations the High Court

ought not to have granted the anticipatory bail to respondent

No.2 – accused. 

4.5 Relying   upon   the   decision   of   this   court   in   case   of   State   of

Madhya Pradesh vs. Pradeep Sharma reported in (2014) 2 SCC

171, it is submitted that as observed and held by this court a

person against whom the proclamation has been issued and the

proceedings under sections 82­83 of Cr.PC have been initiated,

is not entitled to the benefit of anticipatory bail. 

4.6 It is further submitted that even subsequently a charge­sheet

has been filed against the accused – respondent No.2 for the

offences punishable under sections 406 and 420 of IPC. 

4.7 Making the above submissions and relying upon above decision

of this court, it is prayed to allow the present appeal and quash

and set aside the impugned judgment and order passed by the

High   Court   granting   anticipatory   bail   to   respondent   No.2   –

accused. 

5

5. Shri Devashish Bharuka, learned Advocate appearing on behalf

of the State has supported the appellant and has submitted

that on being found a prima facie case against respondent No.2

– accused, a charge­sheet has been filed against the accused

under sections 406 and 420 of IPC also.  

6. Shri   Abhishek,   learned   Advocate   appearing   on   behalf   of

respondent No.2 has vehemently submitted that in the facts

and   circumstances   of   the   case,   the   High   Court   has   not

committed any error in granting anticipatory bail to respondent

No.2 – accused.  

6.1 It is submitted that the High Court has rightly observed that the

nature of accusation is arising out of a business transaction. It

is submitted that merely because the cheque was given and the

same came to be dishonored it cannot be said that the offences

under sections 406 and 420 of IPC is made out. It is submitted

that   at   the   most   the   case   may   fall   under   section   138   of

Negotiable Instruments Act, 1881. 

6

6.2 It is submitted that as such respondent No.2 – accused was

available for interrogation and therefore there is no question of

absconding. 

6.3 It is further submitted by the learned counsel appearing on

behalf of respondent No.2 – accused that at this stage only the

charge­sheet   has   been   filed   in   the   court,   but   the   learned

Magistrate has yet to take cognizance of the same.

7. We have heard the learned counsel appearing on behalf of the

appellant – original informant ­ complainant as well as learned

counsel   appearing   on   behalf   of   the   State   and   the   learned

counsel appearing on behalf of respondent no.2­ accused. 

7.1 It is required to be noted that after investigation a charge­sheet

has   been   filed   against   respondent   no.2   –   accused   for   the

offences punishable under sections 406, 420 of IPC also. Thus

it has been found that there is a prima facie case against the

accused. It has come on record that the arrest warrant was

issued by the learned Magistrate as far as back on 19.12.2018

and thereafter proceedings under sections 82­83 of Cr.PC have

been initiated pursuant to the order passed by the learned Chief

7

Judicial   Magistrate   dated   10.01.2019.   Only   thereafter

respondent No.2 moved an application before the learned Trial

Court for anticipatory bail which came to be dismissed by the

learned Additional Sessions Judge, Saran, by a reasoned order.

The   relevant   observations   made   by   the   learned   Additional

Sessions   Judge,   Saran,   while   rejecting   the   anticipatory   bail

application are as under:­

“Perused the record. The prosecution case as

alleged in the typed application of the informant

Prem Shankar Prasad is that the informant is a

retailer shopkeeper of medicines in the name of

Maa Medical Store, Gandhi Chauk, Chapra and the

petitioner is his stockiest who runs his business in

the name of Rajnish Pharma, Mauna Pakari. The

petitioner and the informant were on good terms,

so,   the   informant   gave   Rs.   36,00,000/­   to   the

petitioner in case and through cheque for purchase

of medicine. When the required were not supplied

to the informant, the informant demanded his Rs.

36,00,000/­ then, the petitioner gave a cheque of

Rs. 10,00,000/­ bearing cheque no. 137763 dated

25.11.2017 which was in the Canara Bank of the

petitioner which was dishonored by the bank with

a note "insufficient fund". Thereafter the informant

demanded his money in case. On 20.06.18 but, the

brothers   of   the   petitioner   misbehaved   with   the

informant.   The   brothers   of   the   petitioner   also

threatened   not   to   contact   the   police   or   the

consequences   will   be   worst:   On   this   informant

Chapra Town PS No. 453/2018 was registered and

investigation proceeded.

8

Perused the case diary from which it transpires

that   in   para   4   there   is   a   re­statement   of   the

informant   in   which   he   has   supported   the

prosecution case. In para 8, 9, 10, and 11 witness

Amit   Kumar   Sinha,   Awadhesh   Kumar,   Dhannu

Kumar   and   Uday   Shankar   Prasad   has   been

examined under section 161 of Cr.PC in which they

have supported the prosecution case. In para 16

there is supervision note of SDPO, Sadar in which

prosecution   case.   In   found   true   under   sections

420, 406 of IPC and 138 of NI Act. In para 23

processes under sections 82 and 83 of Cr.PC have

been issued against the petitioner in para 38 there

is a statement of witness Ashutosh Mishra who is a

medical representative and has stated that Rajnish

Srivastava, being stockiest of the medicine used to

sell   the   medicines   of   his   company   in   course

whereof he has borrowed a sum of  Rs. 7,10,000/­

from   him.   When   he   asked   to   return   back   the

money he has issued a cheque of the aforesaid

amount which was dishonor by his bank due to

insufficient   fund.   In   para   39   another   witness

Pramod Kumar Thakur has been examined who

has deposed that this petitioner Rajnish Srivastava

has borrowed  a sum of Rs. 10,00,000/­ on  the

pretext  of  purchasing a piece of  land.  When  he

demanded   his   money   back.   Rajnish   Srivastava

gave a cheque of the aforesaid amount which was

dishonored by the bank. The investigation in the

case is still going on.

From perusal of the case record I find that the

informant has alleged to have given a sum of  Rs.

36,00,000/­ to this petitioner in order to supply

certain medicines which was neither supplied nor

the   amount   was   ever   refunded.   Admittedly,   the

said amount was given to the petitioner on an oral

undertaking   as   there   is   nothing   on   record   to

substantiate the aforesaid averments, but, the fact

remains that the petitioner in order to refund the

9

said   amount   has   issued   a   cheque   of

Rs.10,00,000/­ bearing cheque no. 137763 dated

25.11.2017 which was deposed by the informant in

the   bank,   but,   the   same   was   dishonored   with

record I further find that the petitioner is in the

habit of borrowing money from different persons

and   then   used   to   make   default   in   payment

inasmuch as by issuing cheques without sufficient

balance in his account which transpires form paras

38 and 39 of the case diary.”

7.2 Despite the above observations on merits and despite the fact

that   it   was   brought   to   the   notice   of   the   High   Court   that

respondent   No.2   –   accused   is   absconding   and   even   the

proceedings under sections 82­83 of Cr.PC have been initiated

as far as back on 10.01.2019, the High Court has just ignored

the aforesaid relevant aspects and has granted anticipatory bail

to respondent No.2 – accused by observing that the nature of

accusation is arising out of a business transaction. The specific

allegations of cheating, etc., which came to be considered by

learned   Additional   Sessions   Judge   has   not   at   all   been

considered by the High Court. Even the High Court has just

ignored the factum of initiation of proceedings under sections

82­83 of Cr.PC by simply observing that “be that as it may”. The

aforesaid relevant aspect on grant of anticipatory bail ought not

10

to have been ignored by the High Court and ought to have been

considered by the High Court very seriously and not casually.

7.3 In the case of State of Madhya Pradesh vs. Pradeep Sharma

(Supra), it is observed and held by this court that if anyone is

declared   as   an   absconder/proclaimed   offender   in   terms   of

section 82 of Cr.PC, he is not entitled to relief of anticipatory

bail. In paragraph 14 to 16, it is observed and held as under:­

“14. In   order   to   answer   the   above   question,   it   is

desirable to refer to Section 438 of the Code which

reads as under:

“438. Direction for grant of bail to person

apprehending   arrest.—(1)   Where   any

person has reason to believe that he may be

arrested on accusation of having committed

a non­bailable offence, he may apply to the

High   Court   or   the   Court   of   Session   for   a

direction under this section that in the event

of such arrest he shall be released on bail;

and   that   court   may,   after   taking   into

consideration,   inter   alia,   the   following

factors, namely—

(i) the nature and gravity of the accusation;

(ii) the antecedents of the applicant including

the   fact   as   to   whether   he   has   previously

undergone imprisonment on conviction by a

court in respect of any cognizable offence;

11

(iii)   the   possibility   of   the   applicant   to   flee

from justice; and

(iv)   where   the   accusation   has   been   made

with the object of injuring or humiliating the

applicant by having him so arrested,

either   reject   the   application   forthwith   or

issue   an   interim   order   for   the   grant   of

anticipatory bail:

Provided that, where the High Court or, as

the case may be, the Court of Session, has

not passed any interim order under this subsection   or   has   rejected   the   application   for

grant of anticipatory bail, it shall be open to

an   officer   in   charge   of   a   police   station   to

arrest, without warrant the applicant on the

basis of the accusation apprehended in such

application.”

The above provision makes it clear that the power

exercisable   under   Section   438   of   the   Code   is

somewhat extraordinary in character and it is to be

exercised only in exceptional cases where it appears

that the person may be falsely implicated or where

there   are   reasonable   grounds   for   holding   that   a

person   accused   of   an   offence   is   not   likely   to

otherwise misuse his liberty.

15. In Adri Dharan Das v. State of W.B. [(2005) 4 SCC

303] this Court considered the scope of Section 438

of the Code as under : (SCC pp. 311­12, para 16)

“16. Section 438 is a procedural provision

which is concerned with the personal liberty

of   an   individual   who   is   entitled   to   plead

innocence,  since  he  is not  on  the  date  of

application   for   exercise   of   power   under

12

Section  438 of the Code convicted  for the

offence in respect of which he seeks bail. The

applicant must show that he has ‘reason to

believe’ that he may be arrested in a nonbailable   offence.   Use   of   the   expression

‘reason to believe’ shows that the belief that

the   applicant   may   be   arrested   must   be

founded on reasonable grounds. Mere ‘fear’

is   not   ‘belief’   for   which   reason   it   is   not

enough for the applicant to show that he has

some   sort   of   vague   apprehension   that

someone   is   going   to   make   an   accusation

against him in pursuance of which he may

be arrested. Grounds on which the belief of

the   applicant   is   based   that   he   may   be

arrested   in   non­bailable   offence   must   be

capable of being examined. If an application

is made to the High Court or the Court of

Session,   it   is   for   the   court   concerned   to

decide whether a case has been made out for

granting of the relief sought. The provisions

cannot   be   invoked   after   arrest   of   the

accused.   A   blanket   order   should   not   be

generally   passed.   It   flows   from   the   very

language of the section which requires the

applicant   to   show   that   he   has   reason   to

believe that he may be arrested. A belief can

be said to be founded on reasonable grounds

only if there is something tangible to go by

on the basis of which it can be said that the

applicant's   apprehension   that   he   may   be

arrested   is   genuine.   Normally   a   direction

should   not   issue   to   the   effect   that   the

applicant shall be released on bail ‘whenever

arrested  for  whichever offence  whatsoever’.

Such ‘blanket order’ should not be passed as

it   would   serve   as   a   blanket   to   cover   or

protect   any   and   every   kind   of   allegedly

unlawful   activity.   An   order   under   Section

438   is   a   device   to   secure   the   individual's

13

liberty,   it   is   neither   a   passport   to   the

commission of crimes nor a shield against

any and  all kinds of  accusations  likely or

unlikely. On the facts of the case, considered

in the background of the legal position set

out above, this does not prima facie appear

to be a case where any order in terms of

Section 438 of the Code can be passed.”

16. Recently, in Lavesh v. State (NCT of Delhi) [(2012)

8 SCC 730] , this Court (of which both of us were

parties) considered the scope of granting relief under

Section 438 vis­à­vis a person who was declared as

an   absconder   or   proclaimed   offender   in   terms   of

Section 82 of the Code. In para 12, this Court held as

under : (SCC p. 733)

“12. From these materials and information, it

is clear that the present appellant was not

available for interrogation and investigation

and was declared as ‘absconder’. Normally,

when   the   accused   is   ‘absconding’   and

declared as a ‘proclaimed offender’, there is

no question of granting anticipatory bail. We

reiterate that when a person against whom a

warrant had been issued and is absconding

or   concealing   himself   in   order   to   avoid

execution   of   warrant   and   declared   as   a

proclaimed offender in terms of Section 82 of

the Code he is not entitled to the relief of

anticipatory bail.”

It is clear from the above decision that if anyone is

declared   as   an   absconder/proclaimed   offender   in

terms of Section 82 of the Code, he is not entitled to

the relief of anticipatory bail.”

14

Thus   the   High   court   has   committed   an   error   in   granting

anticipatory  bail   to   respondent   No.2   –   accused  ignoring   the

proceedings under Section 82­83 of Cr.PC.  

8. Even the observations made by the High Court while granting

the anticipatory bail to respondent  No.2 – accused that the

nature of accusation is arising out of a business transaction

and therefore the accused is entitled to the anticipatory bail is

concerned, the same cannot be accepted. Even in the case of a

business transaction also there may be offences under the IPC

more particularly sections 406, 420, 467, 468, etc. What is

required to be considered is the nature of allegation and the

accusation and not that the nature of accusation is arising out

of a business transaction. At this stage, it is required to be

noted that respondent No.2 ­ accused has been charge­sheeted

for the offences punishable under sections 406 and 420, etc.

and   a   charge­sheet   has   been   filed   in   the   court   of   learned

Magistrate Court. 

9. In view of the above and for the reasons stated above, the

impugned judgment and order dated 14.08.2019 passed by the

15

High   Court   granting   anticipatory   bail   to   respondent   No.2   –

accused is un­sustainable and deserves to be quashed and set

aside and is accordingly quashed and set aside. However, two

weeks’ time from the date of pronouncement of this judgment is

granted to respondent No.2 to surrender before the concerned

Trial Court and thereafter it will be open for respondent No.2 –

accused to pray for regular bail, which may be considered in

accordance with law and on its own merits. The present appeal

is accordingly allowed in the aforesaid terms.   

…………………………………J.

     (M. R. SHAH)

…………………………………J.

(A. S. BOPANNA)

New Delhi, 

October 21, 2021.

16

As per the judgment of Perumon Bhagvathy Devaswom (supra), the Court, while dealing with the issue of condonation of delay in respect of matters pending at the appellate stage, has clearly observed that advocates usually inform the litigants who are to be in contact. Sometimes, they assure their clients that will give information to them as and when matter would be ripe for hearing. Considering the aforesaid aspect and taking a lenient view, we are of the considered opinion that the High Court erred in dismissing the second appeal solely on the ground of limitation. Therefore, the impugned judgment and order of the High Court is set­aside.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6315 OF 2021

(ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 27874 OF 2018)

DR. YASHWANTRAO BHASKARRAO DESHMUKH ...APPELLANT

VERSUS

RAGHUNATH KISAN SAINDANE    …RESPONDENT

J U D G M E N T 

J.K. MAHESHWARI, J.

Leave granted.

2. This   appeal   arises   out   of   the   judgment   passed   on

7.8.2018 by the High Court of judicature of Bombay, Bench at

Aurangabad on Civil Application No. 12143 of 2017 in Second

Appeal   (ST)   No.   31286   of   2017   dismissing   the   application

seeking condonation of delay   and the appeal as barred by

limitation.

3. The facts leading to file this appeal are that a suit for

specific   performance   of   the   contract   was   filed   by   the

1

respondent against the appellant based on an agreement to

sell   dated   18.2.1998   with   respect   to   an   agricultural   land

bearing Gat No. 21/1, admeasuring 1.54 hectares, situated at

Maouje Hingone Sim Tehsil Amalner.  The said suit was partly

decreed  ex­parte by judgment dated 9.12.2002 in Special Civil

Suit   No.   2  of   2001   by   Civil   Judge   (Sr.   Division),   Amalner

directing recovery of  a sum of Rs. 61,000/­ along with interest

@ 6% p.a. from the appellant (defendant therein), while relief

for specific performance of contract was denied.

4. Respondent preferred first  appeal before the High Court.

The appellant was duly served   and   appeared   in the said

matter through the counsel. However, due to enhancement of

pecuniary jurisdiction   of the District Court, the said appeal

stood transferred from the High Court to the District Court.

Thereafter,  a fresh notice was issued to the appellant, which

was served through paper publication.  The appellant did not

appear, and taken  pretext of non­service of the notice due to

change of his address.  The Ad­hoc District Judge­I, Amalner

proceeding ex­parte, allowed the Regular Civil Appeal No. 31 of

2

2012 vide judgment dated 8.09.2015 and granted decree of

specific performance in favour of respondent (plaintiff therein).

5. Aggrieved by the judgment of the Ad­hoc District Judge­I,

appellant   filed   second   appeal   before   the   High   Court   of

judicature of Bombay, Bench at Aurangabad   on 18.9.2017,

inter alia, contending that the judgment passed by the Ist

Appellate Court came to his knowledge only   on 14.9.2017.

There was  a delay of 650 days in filing the appeal.  However,

explaining the delay due to lack of knowledge of the decision

in the appeal, prayer for condonation was made.

6. By the impugned judgment dated 07.08.2018, passed by

the High Court in Second Appeal (ST) No. 31286 of 2017, the

application seeking condonation was rejected,  observing that

the plea of non service of notice due to  change of address was

not acceptable. It was also observed that the appellant had

himself   been   negligent   and   had   not   contacted   his   counsel

engaged   in   the   lower   appellate   court.     The   High   Court,

however,   observed   that     the   respondent,   who   had   been

litigating   since last 17 years, ought not   be deprived of the

3

valuable right as accrued to him.  With these observations, the

application seeking condonation was rejected, dismissing the

second appeal, as time barred.

7. Learned counsel  for the appellant has strenuously urged

that the suit was filed for specific performance of  contract.  As

per the defence  taken, it is  visible from the agreement  itself

that it was not an agreement to sell but a money transaction,

to which a sum of Rs. 90,000/­ has been refunded and only

sum of Rs. 51,000/­ was remaining. In addition, Rs. 10,000/­

paid later and endorsed therein.   The trial court decreed  the

suit partly, for   refund of earnest amount.   The decree of

specific   performance   is   a   discretionary   relief,   as   specified

under Section 16 of the Specific Relief Act.  However, without

giving an opportunity of hearing to contest   the claim, the

lower appellate court allowed the appeal of the respondent and

passed   an   ex­parte     judgment   and   decree   of   specific

performance.     Counsel   argued   that   the     dismissal   of   the

second   appeal   on   the   ground   of   limitation   is   wholly

unreasonable. 

4

8. In support of the contentions, reliance has been placed

on   a   judgment   of   this   Court   in   the   case   of  Perumon

Bhagvathyu   Devaswom   Perinadu   Village   vs.   Bhargavi

Amma (dead) by LRS and Others (2008)8SCC 321 to contend

that   when   appeal  is   pending   in   the   appellate   court   where

periodical dates are not being given, the parties cannot be

faulted with because the counsel informs the parties that they

will get in touch as and when the case is listed for hearing.

Considering the facts of the case in which the notice of the

appeal sent by publication is not allegedly served and the

documents   of   change   of   address   have   been   filed   by   the

appellant as well as the respondent, which are on record, in

such a situation, lenient view ought be taken.

9. Reliance is further placed on the judgment of this Court

in N. Mohan vs. R. Madhu 2019(16)SCALE 602.  In the said

case, considering the facts and circumstances of the case and

in the interest of justice, an opportunity was granted subject

to deposit of the amount.  

5

10. Reliance is further placed on the decision of this Court in

Rohin Thapa vs. Rohit Dora (2019) 7 SCC 359, wherein this

Court subject to direction   of deposit of the amount of the

agreement and further deposit of   the amount of the stamp

and registration fee, directed to condone the delay and also

set­aside the sale deed, executed by the Court.  Therefore, an

opportunity in a suit of specific performance to the appellant

may be granted condoning the delay subject to imposition of

the conditions, as deemed fit.

11. Per contra, learned counsel representing the respondent

contends that a suit for specific performance of contract was

filed long back and respondent is contesting the matter for the

last 20 years.   In the said suit in trial court, the appellant

remained ex­parte.  However, the suit was partly decreed.  On

filing a first appeal before the High Court, notice was served

and   the   appellant   was   represented   through   an   advocate.

Later, due to enhancement of pecuniary jurisdiction, the said

appeal     stood   transferred   to   the   court   of   Ad­hoc   District

Judge­I, Amalner, where from notice of the appeal was served

6

through publication. The appellant did not choose to appear

before   the   Ist   Appellate   Court,   however   the   suit   seeking

specific performance was decreed.     The appellant remained

ex­parte and on filing the execution, the sale deed has also

been executed.  The appeal filed before the High Court by the

appellant was barred by limitation of 650 days, which has not

been   explained   showing   bona   fides.     In   such   a   case,

interference by this Court is not warranted.

12. Having heard learned counsel for the parties   and on

perusal   of   the   facts   of   the   case,   suit   seeking   specific

performance   was   based   on   an   agreement   to   sell   dated

18.2.1998.  As per the said agreement to sell, appellant had

agreed to sell  5 bighas of land for a consideration  at the rate

of   Rs.   51000/­   per   bigha.     As   per   the   entries     on   the

agreement to sell, certain amount was paid. Later on, certain

refund is also recorded and acknowledged thereon.  The Trial

Court,   considering   the   same,   refused   to   grant   a   decree   of

specific performance but directed for refund of  Rs. 61,000/­

with  interest.   The  said  decree was  reversed by  the  lower

7

Appellate Court, directing specific performance.   In both the

courts,  the appellant remained ex­parte.  

13. The   appellant   filed   an   appeal   before   the   High   Court,

which has been dismissed as barred by limitation.  The High

Court, while dismissing the application seeking condonation of

delay in filing second appeal observed that sufficient cause for

delay has not been established.  The litigant, who is contesting

the matter, cannot be negligent and it would be unfair   to

deprive the respondent, litigating for the last 17 years, of the

valuable right that has accrued to him. 

14.   In   this   case,   the   appellant   has   also   produced   the

documents   including   voters   list/aadhar   card   showing   his

change   of   address   from   Amalner   to   Nashik.   On   the   other

hand,   the   respondent     has   produced     the     voters’   list   of

Amalner itself  contending that the name of appellant is still

existing.   However, in such a situation without any enquiry

and without arriving at a finding disbelieving the explanation

of the appellant, the High Court was not justified in rejecting

the application for condonation of delay.

8

15. As per the judgment of Perumon Bhagvathy Devaswom

(supra), the Court, while dealing with the issue of condonation

of delay in respect of  matters pending at the appellate stage,

has   clearly   observed     that     advocates   usually   inform   the

litigants who are   to be in contact.   Sometimes, they assure

their clients that will give information to them as and when

matter would be ripe for hearing. Considering the aforesaid

aspect and taking a lenient view, we are of the considered

opinion that the High Court erred in dismissing the second

appeal   solely   on   the   ground   of   limitation.     Therefore,   the

impugned judgment and order of the High Court is set­aside.  

16. A second appeal lies to the High Court if the High Court

is satisfied that a substantial question of law is involved. We

request   the   High   Court   to   take   up   the   second   appeal   for

admission as expeditiously as possible, preferably within one

month, and if the second appeal is admitted, to decide and

finally dispose of the same within a period of six months from

the date of communication of this judgment and order.  

9

17. It is made clear here that any of the observations made

hereinabove would not be treated as an expression on the

merits of second appeal and would not cause any impediment

to the parties.

18. Appeal is, thus, disposed of in the aforesaid terms.  No

order as to costs. 

  

……………………………J.

[ INDIRA BANERJEE ]

……………………………J.

[ J.K. MAHESHWARI ]

NEW DELHI;

OCTOBER 8, 2021.

10

whether in an appeal/application filed under Section 34 of the Arbitration & Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006, the appellate court would have any discretion to deviate from deposit of 75% of the awarded amount as a pre-deposit?

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6252 OF 2021

Gujarat State Disaster Management

Authority …Appellant

Versus

M/s Aska Equipments Limited …Respondent

J U D G M E N T

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and order dated 26.09.2019 passed by the High Court of Uttarakhand at

Nainital in Writ Petition (MS) No. 2708/2019, by which the High Court

has dismissed the said writ petition and has confirmed the order passed

by the learned Additional District Judge (Commercial), Dehradun in

Miscellaneous Application No. 150 of 2018, whereby the appellant

herein was directed to deposit 75% of the awarded amount in terms of

Section 19 of Micro, Small and Medium Enterprises Development Act,

1

2006 (hereinafter referred to as the ‘MSME Act, 2006’), the appellant

herein – original appellant/applicant has preferred the present appeal.

2. That the parties are governed by the provisions of the MSME Act,

2006. A dispute arose between the parties regarding payment of goods

which was taken by the appellant. The proceedings under Section 18 of

the MSME Act, 2006 commenced. The Facilitation Council passed an

award dated 10.11.2017 in favour of the respondent herein and directed

the appellant to pay a sum of Rs. 105,053,387/- (Rs. Ten crores Fifty

Lakhs Fifty Three Thousand Three Hundred and Eighty Seven only).

3. Feeling aggrieved by the said award, the appellant preferred an

application before the learned Additional District Judge (Commercial),

Dehradun under Section 34 of the Arbitration & Conciliation Act, 1996

read with Section 19 of the MSME Act, 2006. As per Section 19 of the

MSME Act, 2006, the appellant was required to deposit 75% of the

amount awarded by the arbitrator. Several opportunities were given to

the appellant to deposit 75% of the awarded amount. An application for

waiver of pre-deposit was preferred which came to be dismissed. That

thereafter vide order dated 22.08.2019, the learned Additional District

Judge (Commercial), Dehradun granted a month’s time, as a last

opportunity, to the appellant to deposit the said amount.

4. Feeling aggrieved by the said order, the appellant herein preferred

writ petition before the High Court. By the impugned judgment and

2

order, the High Court has dismissed the said writ petition. Even while

dismissing the writ petition, the High Court granted further eight weeks’

time to the appellant to deposit 75% of the awarded amount.

5. Feeling aggrieved and dissatisfied with the impugned judgment

and order passed by the High Court, the appellant herein – original

applicant has preferred the present appeal.

6. Today, when the present appeal is taken up for further hearing,

Shri Ajay Kumar, learned Advocate appearing on behalf of the appellant

has submitted that in the present case while issuing notice on

23.10.2019, this Court directed the appellant to deposit a sum of

Rs.2,50,00,000/- (Rs. Two crores Fifty lakhs) before the appellate

authority and on such deposit the learned appellate Court was directed

to take up the appeal on file and proceed with the same. It is stated that

pursuant to the said order, the appellant has deposited a sum of Rs.

2,50,00,000/- (Rs. Two Crores Fifty Lakhs) and thereafter the learned

appellate authority - Additional District Judge (Commercial), Dehradun

has heard the appeal/application under Section 34 of the Arbitration &

Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006 and

the order is to be pronounced on 12.10.2021. Therefore, it is prayed to

dispose of the present appeal.

7. Learned Advocate appearing on behalf of the respondent has

submitted that, as such, it is mandatory to deposit 75% of the awarded

3

amount as a pre-deposit at the time when the appeal/application under

Section 34 of the Arbitration & Conciliation Act, 1996 read with Section

19 of the MSME Act, 2006 is preferred. It is submitted that what is

directed to deposit vide ex-parte order dated 23.10.2019 is not even

25% of the amount awarded. It is submitted that the question involved in

the present appeal is a pure question of law and therefore the same may

be decided by this Court even for future guidance.

7.1 Learned counsel for the respondent has further submitted that, as

such, the issue involved in the present case is squarely covered against

the appellant in view of the decision of this Court in the case of

Goodyear India Limited v. Norton Intech Rubbers Private Limited, (2012)

6 SCC 345. It is submitted that the very provision of MSME Act, 2006 –

Section 19 has been interpreted by this Court and it is observed and

held that requirement of deposit of 75% as a pre-deposit is mandatory. It

is submitted that even the expression “in the manner directed by such

court” in Section 19 has been interpreted by this Court and it is held that

the expression “in the manner directed by such court” would indicate the

discretion given to the Court to allow the pre-deposit to be made, if felt

necessary, in instalments. It is submitted that otherwise the deposit of

75% as a pre-deposit is mandatory and the appellate court would have

no discretion at all to deviate from the mandate under Section 19 of the

MSME Act, 2006.

4

8. Learned counsel appearing on behalf of the appellant is not in a

position to show any contrary decision to the decision of this Court in the

case of Goodyear India Limited (supra). He is also not in a position to

satisfy whether the appellate court would have any discretion to deviate

from the requirement of deposit of 75% as a pre-deposit while preferring

the appeal/application under Section 34 of the Arbitration & Conciliation

Act read with Section 19 of the MSME Act, 2006.

9. We have heard the learned counsel for the respective parties at

length.

The short question posed for the consideration of this Court is,

whether in an appeal/application filed under Section 34 of the Arbitration

& Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006,

the appellate court would have any discretion to deviate from deposit of

75% of the awarded amount as a pre-deposit?

9.1 Section 19 of the MSME Act, 2006 reads as under:

“19. Application for setting aside decree, award or order – No application

for setting aside any decree, award or other order made either by the

Council itself or by any institution or centre providing alternate dispute

resolution services to which a reference is made by the Council, shall be

entertained by any court unless the appellant (not being a supplier) has

deposited with it seventy-five per cent of the amount in terms of the

decree, award or, as the case may be, the other order in the manner

directed by such court:

Provided that pending disposal of the application to set aside the decree,

award or order, the court shall order that such percentage of the amount

deposited shall be paid to the supplier, as it considers reasonable under

the circumstances of the case, subject to such conditions as it deems

necessary to impose.”

(bold words are ours)

5

9.2 On a plain/fair reading of Section 19 of the MSME Act, 2006,

reproduced hereinabove, at the time/before entertaining the application

for setting aside the award made under Section 34 of the Arbitration &

Conciliation Act, the applicant/appellant has to deposit 75% of the

amount in terms of the award as a pre-deposit. The requirement of

deposit of 75% of the amount in terms of the award as a pre-deposit is

mandatory. However, at the same time, considering the hardship which

may be projected before the appellate court and if the appellate court is

satisfied that there shall be undue hardship caused to the

appellant/applicant to deposit 75% of the awarded amount as a predeposit at a time, the court may allow the pre-deposit to be made in

instalments.

10. An identical question came to be considered by this Court in the

case of Goodyear India Limited (supra). In paragraphs 10 & 11, this

Court observed and held as under:

“10. In his submissions, Mr Ramachandran has referred to the various

decisions, all of which, however, are in the context of enactments in which

discretion has been left to the appellate body to either waive or reduce the

amount of pre-deposit, which factor is absent in the present case. In

support of his contention, however, he referred to and relied upon the

decision of this Court in Snehadeep Structures (P) Ltd. v. Maharashtra

Small-Scale Industries Development Corpn. Ltd. (2010) 3 SCC 34 wherein

while considering the question as to whether an application under Section

34 of the Arbitration and Conciliation Act, 1996, could be treated to be an

appeal, a question incidentally arose as to whether if the same was to be

treated as an appeal, would it be necessary to comply with the provisions

of Section 19 of the 2006 Act. Their Lordships observed that the provision,

no doubt, requires pre-deposit to be made before an application under

Section 34 of the Arbitration Act is filed, but that they were not inclined to

read that provision into the provision in question. The facts of the said

6

case are different from the facts of this case and it would be difficult to

import the ratio of the decision in the above case into the facts of this

case.

11. Having considered the submissions made, both on behalf of the

petitioner and on behalf of the respondents, we do not see any reason to

interfere with the views expressed, both by the learned Single Judge, as

also the Division Bench with regard to Section 19 of the 2006 Act. It may

not be out of place to mention that the provisions of Section 19 of the

2006 Act, had been challenged before the Kerala High Court in Kerala

SRTC v. Union of India [(2010) 1 KLT 65], where the same submissions

were negated and, subsequently, the matter also came up to this Court,

when the special leave petitions were dismissed, with leave to make the

pre-deposit in the cases involved, within an extended period of ten

weeks. We may also indicate that the expression “in the manner directed

by such court” would, in our view, indicate the discretion given to the

court to allow the pre-deposit to be made, if felt necessary, in

instalments.”

11. In view of the above and considering the language used in Section

19 of the MSME Act, 2006 and the object and purpose of providing

deposit of 75% of the awarded amount as a pre-deposit while preferring

the application/appeal for setting aside the award, it has to be held that

the requirement of deposit of 75% of the awarded amount as a predeposit is mandatory. Therefore, as such, both the High Court as well as

the learned Additional District Judge (Commercial), Dehradun were

justified in directing the appellant to deposit 75% of the awarded amount

as a pre-deposit.

However, at the same time, considering the fact that while issuing

notice in the present proceedings on 23.10.2019, this Court passed the

following order:

“Permission to file the special leave petition is granted.

7

In an appeal filed by the petitioner-Gujarat State Disaster Management

Authority, a Public Sector Undertaking of the State of Gujarat, challenging

the award passed under the Micro, Small and Medium Enterprises

Development Act, 2006 by the Facilitation Council, pursuant to Section 19

of the said Act the petitioner-Authority was directed to deposit 75% of the

Award amount as conditional pre-deposit for taking the appeal on file.

Being aggrieved by the direction for pre-deposit of the amount the

petitioner-Authority has preferred this special leave petition.

We have heard Mr. Huzefa Ahmadi, learned senior counsel appearing for

the petitioner-Authority, who has submitted that the entire amount payable

to the respondent-supplier has already been paid to the respondentsupplier and hence there is no necessity to make pre-deposit for filing the

appeal. Arguments advanced by learned senior counsel is on the merit of

the matter.

Having regard to the facts and circumstances and considering the fact that

the petitioner-Authority is a Public Sector Undertaking, in exercise of the

discretion vested with the court under Section of the said Act, we direct the

petitioner-Authority to deposit Rs.2,50,00,000/- before the Appellate

Authority within a period of four weeks from today. On such deposit, the

District and Sessions Judge, Dehradun, is directed to take up the appeal

on file and proceed with the same.

Issue notice to the respondent.

On deposit of Rs.2,50,00,000/- (Rupees Two Crore Fifty Lakhs), the same

shall be invested in a fixed deposit in a nationalised bank for a period of

three months with auto renewal so that it may enure to the benefit of the

successful party and the disbursement of the same shall await further

orders from this Court.”

and directed the appellant to deposit Rs. 2,50,00,000/- (Rupees Two

Crores Fifty Lakhs) and on such deposit the District and Sessions Judge,

Dehradun was directed to take up the appeal on file and proceed with

the same. It is reported that by now the application/appeal has been

heard and the order is to be pronounced on 12.10.2021, we continue

with the arrangement as per order dated 23.10.2019 in the

appeal/application under Section 34 of the Arbitration & Conciliation Act

8

is finally decided and disposed of. We hope and trust that the learned

Additional District Judge (Commercial), Dehradun shall pronounce the

order at the earliest and more particularly on 12.10.2021, the date on

which order is to be pronounced, as reported.

12. With the aforesaid, the question posed is answered against the

appellant in terms of the above and we dispose of the appeal laying

down the law in terms of the above, however, as observed hereinabove,

continue with the interim arrangement as per order dated 23.10.2019 till

final disposal of the appeal/application under Section 34 of the Arbitration

& Conciliation Act, 1996 read with Section 19 of the MSME Act, 2006,

which shall not be treated as a precedent.

………………………………….J.

[M.R. SHAH]

NEW DELHI; ………………………………….J.

OCTOBER 08, 2021. [A.S. BOPANNA]

9

Insofar as the charge alleged against the appellant under Section 506 of IPC, it is noticed that the charge alleged against the appellant is that on the date referred to i.e 02.08.2013, the appellant threatened to kill the prosecutrix, the daughter of the complainant and therefore had committed the offence which is punishable under Section 506 IPC. In respect of the said charge we do not find that there is any supporting evidence except the vague statement of the prosecutrix in her evidence as PW­3 that whenever she shouted when he had attempted to have sexual acts with her, the appellant had threatened her not to say anything to anyone as otherwise he would kill her. There is no other statement or evidence relating to the incident or the manner in which the threat in its true sense was put forth.-In the result we make the following order: ­ (i) The conviction and sentence under Section 363, 366, and Section 4 of POCSO Act is confirmed. The conviction under Section 506 IPC is set aside.(ii) The conviction order made by the trial court and confirmed by the High Court under Section 376 D IPC is modified. The appellant is instead convicted under Section 376 IPC and is sentenced, for the period undergone. The fine and default sentence as imposed by the trial court shall remain unaltered. (iii) Since the custody certificate dated 20.09.2013 indicates that the appellant has undergone sentence for more than 8 years, the appellant is ordered to be released on payment of fine as all the sentences have run concurrently and if he is not required to be detained in any other case. (iv) The appeal is accordingly allowed in part.

                                                           REPORTABLE

   IN THE SUPREME COURT OF INDIA

   CRIMINAL APPELLATE JURISDICTION

   CRIMINAL APPEAL NO.1167 OF 2021  

(Arising out of SLP(Criminal) No. 7828/2019)

Manoj Mishra @ Chhotkau          .…Appellant(s)

Versus

The State of Uttar Pradesh                            ….Respondent(s)

J U D G M E N T

A.S. Bopanna,J.

1. The appellant is before this Court assailing the judgment

dated 14.03.2018 passed by the High Court of Judicature at

Allahabad, Lucknow Bench in Criminal Appeal No.1102/2017.

Through the said judgment, the High Court has dismissed the

appeal and confirmed the conviction and sentence ordered to

the appellant by the Additional Sessions Court and Special

Judge POCSO Act, Bahraich in C.C. No.18/2014. The appellant

herein was arrayed as Accused No.4 in the said case.

1

2. The brief facts leading to the conviction and sentence of

the appellant is that the father of the prosecutrix filed a written

report   dated   09.08.2013   at   22:35   hours   before   the   police

alleging therein that one Ramasre alias Siri had enticed his

daughter aged about 14 years on 02.08.2013 and had taken

her away. In the said complaint, it was further alleged that

Raksharam, Nangodiya and Manoj Kumar alias Chhotkau i.e.

the appellant herein had cooperated with him in the alleged

incident.   An   FIR   was   lodged   in   Crime   No.625/2013   under

Sections 363 and 366 IPC. The prosecutrix was found by the

police along with Ramasre alias Siri. She was brought back and

subjected to medical examination.   The case was investigated

and a charge sheet was filed under Sections 363, 366, 376 and

506 Indian Penal Code (for short ‘IPC’) as also sections 3 and 4

of Protection of Children from Sexual Offences Act (for short

‘POCSO Act’).   The Court had thereafter framed the charges

against the accused. On the accused denying the charge, trial

was conducted.  The father and mother of the prosecutrix were

examined as PW­1 and PW­2 respectively, while the prosecutrix

herself was examined as PW­3.   Dr. Rabia Sultan who had

conducted   the   medical   examination   on   the   prosecutrix   was

2

examined as PW­4. The Constable Pramod Kumar Shah who

had   carried   the   FIR   was   examined   as   PW­5   and   the   SubInspector Tara Prasad Pandey who had investigated the case

was examined as PW­6.

3. The trial court having analysed the said evidence which

was tendered before it, also taking into consideration the denial

put forth by the accused while recording the statement under

Section 313 of Criminal Procedure Code (for short ‘Cr.PC’) had

arrived at the conclusion that the charge alleged against the

accused was proved.  Accordingly the accused were sentenced

to (i) 3 years rigorous imprisonment with fine of Rs.3000/­ for

the   offence   under   Section   363   IPC;   (ii)   5   years   rigorous

imprisonment with fine of Rs.5,000/­   for the offence under

Section 366 IPC; (iii) 20 years rigorous imprisonment with fine

of Rs.25,000/­ for the offence under Section 376­D IPC; (iv) 2

years   rigorous   imprisonment   with   fine   of   Rs.2,000/­   under

Section 506 IPC and (v) 7 years rigorous imprisonment with

fine of Rs.7,000/­ for the offence under Section 4 of POCSO

Act.  The default sentence for non­payment of the fine was also

imposed   and   the   sentence   for   the   offence   under   the   said

provisions   were   ordered   to   run   concurrently   through   the

3

judgment dated 20.05.2015.  Through the said judgment one of

the   accused   Raksharam   was   acquitted   on   holding   that   the

charges against him were not proved.  

4. The appellant had assailed the said judgment before the

High Court in Criminal Appeal No.1102/2017.   The learned

Judge while adverting to the evidence tendered before the trial

court   had   reappraised   the   same   in   the   background   of   the

contentions that were urged and, in that light, had arrived at

the conclusion that the appellant had raped the prosecutrix

number of times after being enticed away by him.  In that view

of the matter the learned Judge was of the opinion that the trial

court had rightly arrived at the conclusion on the basis of the

prosecution evidence that the appellant was involved in the

commission   of   the   crime.     The   judgment   of   conviction   and

sentence was accordingly confirmed.   The appellant therefore

claiming to be aggrieved by the judgment passed by the learned

Judge of the High Court is before this Court in this appeal.  

5. We   have   heard   Mr.   Anoop   Prakash   Awasthi   learned

counsel appearing for the appellant, Mr. Parmanand Pandey

4

learned standing counsel for the State of Uttar Pradesh and

perused the appeal papers.

6. The learned counsel for the appellant while seeking to

contend   that   the   trial   court   as   also   the   High   Court   had

committed an error in convicting and upholding the conviction

would seek to refer to the contradictions in the very manner in

which the complaint was initiated and the various statements

made   by   the   prosecutrix   herself.   It   is   contended   that   the

criminal proceedings was set in motion by the complaint dated

09.08.2013 wherein it has been stated that his daughter has

been tricked and enticed, therefore eloped somewhere.  When a

statement was recorded on 10.08.2013, he has alleged that

Ramasre alias Siri had enticed his minor daughter and his

statements had been varying from time to time.  It is his case

that even the prosecutrix has made contradicting statements

with regard to the nature of the incident as also her age. In that

light, it is contended that the entire theory of the prosecutrix

being kidnapped, enticed or being raped in the manner as has

been put forth is not reliable.  It is contended that even with

regard to the manner in which the prosecutrix had stated of

having gone with Ramasre alias Siri, it only indicates that it

5

was   consensual   and   in   any   event   the   appellant   has   been

named only thereafter when a statement was recorded under

Section 164 Cr.PC.  Though in her evidence as PW­3 she has

stated, with regard to the incident; in her cross­examination

she has stated, with regard to the physical relation she had for

the first time which had been told by her to the family but has

again stated that she disclosed the same when she was four

months’ pregnant and the family members enquired her about

the same. 

7.  The learned counsel therefore contends that neither the

evidence of the parents who were examined as PW­1 and PW­2

nor  the  evidence  tendered  by  the  prosecutrix   as  PW­3 was

reliable and the trial court as well as the High Court ought not

to have passed the conviction and sentence on such evidence.

Though PW­4 in her evidence and with reference to the medical

examination   report   has   stated   about   the   prosecutrix   being

pregnant and the foetus being of 20­23 weeks, that by itself

cannot establish the charge made against the appellant is his

contention.   Alternatively,   it   is   contended   that   even   if   the

statement of the prosecutrix about the physical relations of the

appellant with her and that she has filed the complaint when

6

the appellant had refused to marry her despite she becoming

pregnant is accepted, it only indicates that it was consensual

and when she herself has stated that she was 20 years and

also   when   PW­4   the   doctor   in   her   cross­examination   has

indicated that due to the development of her body even if she is

stated to be 16­17 years there could be variation and it can be

17­18 years as per general variations. In such event, the charge

would not be sustainable.   Even otherwise, in the facts and

circumstance, the conviction under Section 376­D IPC is not

justified and said provision ought not to have been invoked as

it does not qualify to be a gang rape.  For all the said reasons,

he contends that the judgment is liable to be set aside.

8. The   learned   standing   counsel   for   the   State   of   Uttar

Pradesh contends that the trial court as also the High Court

has referred to the evidence available on record.  Though there

may be certain discrepancies in the various statements the

same cannot qualify as contradictions and in that circumstance

when PW­1, PW­2 and PW­3 have all stated with regard to the

incident   in   support   of   the   prosecution   and   when   there   is

categorical medical examination to indicate that the prosecutrix

was   pregnant,   the   charge   would   stand   established.     It   is

7

contended that in such circumstance when the father of the

prosecutrix has indicated the age as 14 years and the doctor

also   has   indicated   the   age   to   be   around   16   years,   the

contention of the consensual sex will not be acceptable.  In that

view he contends that the judgment passed by the trial court as

also the High Court does not call for interference.  

9. In the  light  of  the above, we have  taken  note of  the

nature of consideration made by the trial court as also the High

Court.  In so far as the incident based on which the charge was

framed   against   the   accused,   more   particularly   against   the

appellant, the parents of the prosecutrix and the prosecutrix

herself were examined as PW­1 to PW­3 who have spoken with

regard   to   the   same.     Though   reference   was   made   to   the

complaint and the statement of PW­1 and at the first instance

the complainant having named Ramasre alias Siri, it was in the

circumstance when he had noticed that the prosecutrix, i.e. his

daughter was not in the house and had accordingly lodged the

complaint on suspicion.  It is pursuant to the complaint when

the police took action, the prosecutrix and the said Ramasre

alias Siri were retrieved by the police when they were travelling

to   Mumbai   as   per   the   very   statement   recorded   by   the

8

prosecutrix under Section 164 Cr.PC.   In that circumstance

what   would   be   relevant   is   the   statement   and   the   evidence

tendered   by   the   prosecutrix   as   PW­3   before   the   trial   court

which described the events prior thereto and the circumstance

which forced her to be with Ramasre alias Siri at that point.

Though certain discrepancies were referred to by the learned

counsel for the appellant in the manner the prosecutrix had

described   the   incident   to   contend   that   as   per   her   own

statement the thatched hut was open from all sides and the act

was alleged to be committed during the day time which cannot

be probable, it is noticed that the sum and substance of the

evidence tendered by the prosecutrix as PW­3 is essentially

with   regard   to   the   physical   relationship   she   had   with   the

appellant due to which she had become pregnant and this was

disclosed to her family members only when they had noticed

her   to   be   pregnant.     She   has   further   stated   that   in   that

situation when she had insisted on the appellant marrying her,

he had refused, threatened and he had taken the help of the

co­accused   and   got   her   married   to   Ramasre   alias   Siri,   by

enticing and taking her away.

9

10. In   that   background,   the   fact   that   the   appellant   had

physical relationship with the prosecutrix on more than one

occasion and the prosecutrix had not disclosed the same to her

parents when it had happened for the first time about four

months   earlier   but   was   brought   to   their   notice   when   her

pregnancy was noticed will have to be viewed from the stand

point   as   to   whether   the   charges   as   framed   would   stand

established.   It is no doubt true that the prosecutrix in her

deposition   has   stated   that   on   the   day   of   the   incident   the

appellant, Ramasre alias Siri, Nangodiya etc. had caught hold

of her.  However, there is no specific indication as to whether

the other accused and the appellant had indulged in sexual act

along with the appellant herein or the reference is with regard

to   that   they   having   assisted   the   appellant   in   enticing   and

taking her away on the date of the complaint so as to marry her

of to Ramasre alias Siri.  What is also to be taken note of, is

that the said Ramasre alias Siri and Nangodiya are siblings

being the sons of Raksharam who was acquitted by the trial

court.   To   establish   common   intention   on   their   part   in

furthering the sexual assault committed by the appellant, there

is convincing evidence to that effect.

10

11. From   the   evidence   tendered   by   PW­2   to   PW­3,   more

particularly the evidence of PW­4 i.e., the doctor who examined

the prosecutrix it would disclose that she had examined the

prosecutrix at 7 pm on 19.08.2013. She has stated that the

victim   who   was   unmarried   was   fully   grown   up   and   on

conducting the necessary tests it was seen that the rupture of

the hymen was old and she was found to be 24 weeks into her

pregnancy.   The   medical   report   was   exhibited   as   K­2.   The

complementary report dated 24.08.2013 was marked as exhibit

K­4. In the cross­examination she has referred to the age of

prosecutrix as 16 to 17 years. Though she has stated that it

could be 17 to18 years as per general variations, no definite

opinion to that effect has been given by her. In the crossexamination she has however stated that the pregnancy was of

23 weeks. The report of the doctor indicates it to be 23 weeks

while the pathology report gives the status of the single alive

foetus of 20 weeks 2 days as on 20.08.2013. Though there is

marginal   variation   with   regard   to   the   number   of   weeks

mentioned, the pregnancy was not less than 20 weeks and if

the   same   is   kept   in   the   backdrop,   the   statement   of   the

prosecutrix that the appellant had intercourse with her for the

11

first   time,   four   months   earlier,   which   is   an   approximate

indication and that she became pregnant would coincide with

the period. Though there are minor discrepancies with regard

to   the   statement   made   under   Section   164   Cr.PC   and   the

evidence tendered by the prosecutrix as PW­3, the thrust of the

allegation has been that the appellant had committed physical

contact with her against her will. In such circumstance, the

evidence of the prosecutrix and the medical evidence would

establish the charge of rape. 

12. The   question   which   would   however   arise   for   our

consideration is as to whether the charge framed against the

accused under Section 376 D IPC would be justified and as to

whether the case would qualify to be one of gang rape. On this

aspect, the evidence of PW­1 and PW­2 does not establish the

same.   The   evidence   of   PW­3   i.e.,   the   prosecutrix   is   not

categorical in as much as the prosecutrix has alleged that when

she was sitting in her thatched hut, the appellant came after

parking his vehicle (tractor) besides the road and asked for

water. At that time, he asked where her father was and after

she told that he had gone out, the appellant had forced himself

upon her. She has further alleged that he kept doing the wrong

12

act with her for four months and she became pregnant. When

she disclosed the pregnancy and asked the appellant to marry

her, he did not yield. Therefore, insofar as the incident of rape

attributed to the appellant it does not disclose that all the

accused   had   committed   rape   on   her   or   had   the   common

intention and aided the commission. It is no doubt true that

she refers to the incident on the day she was said to have been

taken away by all the accused. In that regard except stating

that she was carried to the home of a lady who they were

calling as Aunty, and at her place committed sexual act there is

no other evidence available on record to indicate that the spot

was visited in the course of the investigation and the lady who

is   alleged   to   have   aided   has   either   been   apprehended   or

examined. It is also not established that all of them were seen

together or aided with common intention.

13. In fact, the very conclusion reached by the High Court

itself would indicate that the allegation of rape as established

by   the   prosecution   is   against   the   appellant   and   the   other

accused are not involved in such act.  The relevant conclusions

read as hereunder:

13

“23. It has also been placed before the court that the

other co­accused were real brothers and their father, as

such   the   truthfulness   of   the   incident   is   highly

improbable. The main co­operation of other co­accused

appears to be in enticing the prosecutrix away but the

allegation of specific rape has been levelled against the

present   accused­appellant   only   and   that   too   four

months prior to the incident on one threat or the other.

This   also   gives   a   reason   for   enticing   her   away   and

getting her married to Ram Asrey alias Sirri.

26.   To   conclude,   the   prosecutrix   was   raped   by   the

accused­appellant number of times after being enticed

away   by   him   and   also   before   the   incident   the

truthfulness   or   reliability   of   her   statement   is

undoubtful and there is nothing which may negate the

acceptance   of   her   testimony.   In   the   instance,   the

commission   of   alleged   crime   against   the   prosecutrix

cannot be ruled out. 

27. In view of above, it is difficult to comprehend the

circumstances   in   which   the   charge   of   rape   and

enticement   against   the   accused­appellant   cannot   be

levelled.   The   reason   given   by   the   trial   court   for

conviction of the appellant are sufficient enough to hold

him guilty.”

14. Further, when the prosecutrix was traced based on the

complaint lodged by her father all of them were not with her

but she was found only with Ramasre @ Siri. That apart, as

noted the other three accused apart from the appellant are the

siblings and their father Raksharam has been acquitted by the

trial court. In that circumstance, the charge of gang rape has

not been established with convincing evidence. However, having

already   noted   that   the   incident   of   rape   alleged   had   been

established, it would be a case to convict the appellant under

14

Section 376 of IPC. However, the conviction handed down by

the trial court and confirmed by the High Court under Section

363, 366 and under Section 4 of POCSO Act and the sentence

as ordered thereunder would not call for interference. 

15. Insofar as the charge alleged against the appellant under

Section 506 of IPC, it is noticed that the charge alleged against

the appellant is that on the date referred to i.e 02.08.2013, the

appellant threatened to kill the prosecutrix, the daughter of the

complainant and therefore had committed the offence which is

punishable   under   Section   506   IPC.   In   respect   of   the   said

charge we do not find that there is any supporting evidence

except the vague statement of the prosecutrix in her evidence

as PW­3 that whenever she shouted when he had attempted to

have sexual acts with her, the appellant had threatened her not

to say anything to anyone as otherwise he would kill her. There

is no other statement or evidence relating to the incident or the

manner in which the threat in its true sense was put forth. In

that view, we are or of the opinion that the conviction and

sentence under Section 506 imposed by the trial court and

affirmed by the High Court is not sustainable and is liable to be

set aside.

15

16. On arriving at the conclusion that the appellant is liable

to be convicted under Section 376 IPC and not under Section

376   D   IPC,   the   appropriate   sentence   to   be   imposed   needs

consideration.   The   incident   in   question   is   based   on   the

complaint dated 09.08.2013. In this circumstance, though it is

noted that Section 376 has been amended w.e.f. 21.04.2018

providing for the minimum sentence of 10 years, the case on

hand is of 2013 and the conviction of the appellant was on

20.05.2015. The incident having occurred prior to amendment,

the pre­amended provision will have to be taken note. The same

provides that a person committed of rape shall be punished

with rigorous imprisonment for a term which shall not be less

than seven years but which may extend to imprisonment for life

and shall also be liable to fine. In the instant case, taking into

consideration all facts including that no material is available on

record   to   indicate   that   the   appellant   has   any   criminal

antecedents and that he is also a father of five children and the

eldest son is more than 18 years, it appears that there is no

reason   to   apprehend   that   the   appellant   would   indulgence

similar   acts   in   future.   In   that   circumstance,   we   deem   it

appropriate   that   the   sentence   of   7   years   would   have   been

16

sufficient   deterrent   to   serve   the   ends   of   justice.   From   the

custody   certificate   dated   05.12.2017   issued   by   the   Jail

Superintendent, District Jail, Bahraich, it is noticed that the

appellant has been in custody from 20.09.2013. If that be the

position, he has been in custody and served the sentence for

more than 8 years which shall be his period of sentence. As

such   he   has   served   the   sentence   imposed   by   us   except

payment of fine. The fine and default sentence as imposed by

the trial court is maintained. 

17. In the result we make the following order: ­

(i) The conviction and sentence under Section 363,

366, and Section 4 of POCSO Act is confirmed.

The   conviction   under   Section   506   IPC   is   set

aside.

(ii) The conviction order made by the trial court and

confirmed by the High Court under Section 376

D   IPC   is   modified.   The   appellant   is   instead

convicted   under   Section   376   IPC   and   is

sentenced,   for   the   period   undergone.   The   fine

17

and   default   sentence   as   imposed   by   the   trial

court shall remain unaltered. 

(iii) Since the custody certificate dated 20.09.2013

indicates   that   the   appellant   has   undergone

sentence for more than 8 years, the appellant is

ordered to be released on payment of fine as all

the sentences have run concurrently and if he is

not required to be detained in any other case. 

(iv) The appeal is accordingly allowed in part. 

(v) Pending application, if any, shall stand disposed

of. 

……………………….J.

(M.R. SHAH)

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

                                               (A.S. BOPANNA)

New Delhi,

October 08, 2021 

18

In the case on hand, reading the complaint as a whole, it is clear that the allegations in the complaint are that at the time at which the cheques were issued by the Company and dishonoured by the Bank, the appellants were the Directors of the Company and were responsible for its business and all the appellants were involved in the business of the Company and were responsible for all the affairs of the Company. It may not be proper to split while reading the complaint so as to come to a conclusion that the allegations as a whole are not sufficient to fulfil the requirement of Section 141 of the NI Act. The complaint specifically refers to the point of time when the cheques were issued, their presentment, dishonour and failure to pay in spite of notice of dishonour. In the given circumstances, we have no hesitation in overruling the argument made by the learned counsel for the appellants.- all the three cases of which a reference been made in para 17 of this Judgment be clubbed together and be disposed of expeditiously as possible on its own merits in accordance with law without being influenced/inhibited by the observations made by us in the present judgment not later than six months from the date parties record their attendance before the trial Court.

NON­REPORTABLE 

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

       CRIMINAL APPEAL NO(S).  1206         OF 2021

 (Arising out of SLP(Criminal) No(s). 7573 of 2014)

ASHUTOSH ASHOK 

PARASRAMPURIYA & ANR.  ….APPELLANT(S)

                 VERSUS

M/S. GHARRKUL 

INDUSTRIES PVT. LTD. & ORS …RESPONDENT(S)

WITH 

       CRIMINAL APPEAL NO(S).  1207      OF 2021

 (Arising out of SLP(Criminal) No(s). 9520 of 2014)

J U D G M E N T

Rastogi, J.

1. Leave granted.

2. The   present   appeals   are   directed   against   the   common

judgment and order dated 18th July, 2014 filed at the instance of

1

the appellants under Section 482 of Code of Criminal Procedure,

1973(herein after being referred to as “CrPC”) against the order

dated 10th November, 2012 pursuant to which they were summoned

to answer to a charge of Section 138 of Negotiable Instruments Act,

1881(hereinafter being referred to as the “NI Act”) that came to be

dismissed by the High Court under the order impugned.

3. The seminal facts in brief necessary for the present purpose

are stated as under.

4. The appellant nos. 1 and 2 in Criminal Appeal @ SLP(Criminal)

No. 7573 of 2014 and appellant nos. 2, 3 and 4 in Criminal Appeal

@ SLP(Criminal) No. 9520 of 2014 are the Directors of the appellant

no.   1(Ameya   Paper   Mills   Pvt.   Ltd.)   in   Criminal   Appeal   @

SLP(Criminal)   No.   9520   of   2014,   the   Private   Limited   Company

established under the provisions of the Companies Act, 1956.  It is

the case of respondent no. 1­complainant that it is a Private Limited

Company dealing in the business of production and selling spices

under the name and style of M/s. Gharkul Industries Private Ltd.

and the appellants being well acquainted with respondent no.1­

complainant and  being in need of financial  assistance for their

2

business approached respondent no.1­complainant with a request

to   provide   them   financial   assistance.     Respondent   no.   1­

complainant considering the relations and need of the appellants

provided financial assistance and on negotiations, Memorandum of

Understanding was executed which was signed by appellant no. 2­

Dilip Shrikrishna Andhare(Appellant no. 2 in Criminal Appeal @

SLP(Criminal) No. 9520 of 2014) with consent of all the appellants

in the presence of two attesting witnesses.

5. It is also the case of respondent no. 1­complainant that all the

appellants had agreed that the amount so received from respondent

no. 1 would be returned within a specified time as agreed in the

Memorandum   of   Understanding   and   accordingly   payments   were

made by respondent no. 1­complainant as and when demanded by

various cheques details which were furnished in the complaint.

Accordingly, a total amount of Rs. 1,50,19,831/­ was received by

the appellants through cheque during the period 23rd  November,

2007 to 12th March, 2009, the details of which are as under:­

Date Cheque No. Bank HDFC

Bank

Amount

23/11/07 417895 HDFC Bank 20,00,000/-

3

30/11/07 417896 HDFC Bank 16,00,000/-

18/01/08 417909 HDFC Bank 6,00,000/-

21/01/08 417915 HDFC Bank 5,00,000/-

22/01/08 417916 HDFC Bank 10,00,000/-

23/01/08 417917 HDFC Bank 5,39,831/-

30/01/08 417919 HDFC Bank 7,00,000/-

01/02/08 461840 S.B.I. 3,00,000/-

15/02/08 461840 S.B.I. 5,00,000/-

26/02/08 507485 HDFC Bank 3,00,000/-

01/03/08 507487 HDFC Bank 4,00,000/-

11/03/08 461844 S.B.I. 3,50,000/-

18/03/08 507483 HDFC Bank 80,000/-

24/03/08 507497 HDFC Bank 3,04,000/-

04/04/08 507509 HDFC Bank 3,00,000/-

0/04/08 507500 HDFC Bank 2,70,000/-

28/04/08 507506 HDFC Bank 24,000/-

01/05/08 507507 HDFC Bank 1,27,000/-

06/05/08 507514 HDFC Bank 2,25,000/-

30/05/08 461861 S.B.I. 2,50,000/-

04/06/08 507519 HDFC Bank 4,00,000/-

27/06/08 507426 HDFC Bank 2,50,000/-

12/03/09 333407 S.B.I. 10,00,000/-

12/03/09 333408 S.B.I. 10,00,000/-

12/03/09 333409 S.B.I. 10,00,000/-

4

12/03/09 333410 S.B.I. 10,00,000/-

6. It is the further case of the respondent no. 1 that on 18th

August   2010,   a   letter   was   issued   to   the   appellants   demanding

balance­sheet of the Company, which was supplied and accordingly

accounts were confirmed by the appellants and on 21st June 2012,

the appellants issued a letter admitting the outstanding balance of

respondent no. 1­complainant as on 31st March, 2012 to the extent

of Rs.1,49,94,831/­.  According to respondent no. 1, the appellants

as Directors of their Company are responsible for conduct of their

business and for the affairs of the Company.

7. Appellant No. 1­Company in Criminal Appeal @ SLP(Criminal)

No. 9520 of 2014 issued a cheque on 2nd June, 2012 in favour of

respondent no. 1­complainant towards part payment of the amount

valued for Rs. 10,00,000/­ drawn on State Bank of India, Finance

Branch   at   Nagpur,   Maharashtra   which   was   deposited   by

respondent   no.   1­complainant   in   UCO   Bank,   Amravati,

Maharashtra for encashment.  However, the same was dishonoured

due to “funds insufficient”.  The intimation of dishonour of cheque

was received by respondent no. 1­complainant on 4th June, 2012.

After   dishonour   of   cheque,   notice   was   issued  to   the   appellants

5

demanding the said amount of cheque, which was refused to be

accepted by the appellants in spite of intimation given by the Postal

Authorities and, thus, the notice was returned with remark “not

claimed”.

8. In the background of the above facts, respondent no. 1 filed a

complaint against the appellants under Section 138 of NI Act in

which a  specific averment  was  made that  respondent  no.  1 by

considering the need of the appellants for financial assistance and

their relations, provided such financial assistance to the appellants

by executing Memorandum of Understanding, which was signed by

Appellant   no.   2­Dilip   Shrikrishna   Andhare.     It   is   specifically

contended   that   appellant   no.   2   signed   the   said   document   with

consent   of   all   the   remaining   appellants   in   the   presence   of   two

attesting witnesses.  It is the case of respondent no. 1­complainant

as revealed from the complaint that all the appellants agreed that

the amount provided by respondent no. 1 would be refunded within

one or two years.  The contents of the complaint further reveal that

respondent no. 1 had demanded balance­sheet of appellant no. 1

Company, which was provided and the appellants also confirmed

6

the balance in their accounts by issuing letter dated 21st  June,

2012.     The   cheque   involved   in   the   criminal   case   initiated   by

respondent no. 1 against the appellants is dated 2nd June, 2012.  It

is further averred in para 5 & 7 of the complaint that all Directors

of the appellant Company are responsible for its business and all

the appellants are involved in the business of the Company and are

responsible for all the affairs of the Company.  

9. After contending about the fact of issuance of cheque dated 2nd

June, 2012 by the appellants to respondent no. 1 and dishonour of

cheque   for   want   of   sufficient   funds,   on   receipt   of   intimation

regarding dishonour of cheque on 4th June, 2012, respondent no. 1

issued legal notice to the appellants on the address of appellant no.

1­Company as well as on their residential address by registered

post acknowledgment due on 26th June, 2012 demanding amount

of   Rs.10   lakhs   which   is   alleged   to   have   been   refused   by   the

appellants as per endorsement made by the Postal Department.  

10. In   the   light   of   the   above   averments   in   the   complaint   and

documents filed on record, and so also the specific averment made

in paragraph 5 and 7 of the complaint that all the appellants are

7

equally responsible for the offence committed by them and they

have issued the said cheque to discharge their legal liability towards

respondent no. 1­complainant. 

11. The learned trial Court taking cognizance of the complaint by

order dated 10th November, 2012 issued summons to the appellants

herein directing them to appear before the Court on 23rd November,

2012 and the appellants were granted bail on furnishing security of

Rs.2,000/­ by an Order dated 23rd November, 2012 by the Court of

Chief Judicial Magistrate. 

12. The order passed by the learned trial Judge summoning the

present appellants came to be challenged in two separate criminal

petitions filed under Section 482 CrPC seeking quashing/setting

aside of the criminal complaints/Summary criminal case registered

against them as well as the summons dated 10th November, 2012.

Both the petitions were tagged together and came to be dismissed

by the High Court under the order impugned dated 18th July, 2014.

13. Ms.   Arundhati   Katju,   learned   counsel   for   the   appellants

submits that there is no specific averment made that they have

committed the offence and are responsible for conduct of business

8

of   the   Company,   which   is   one   of   the   essential

ingredient/requirement   and   in   the   absence   of   such   averment,

merely because the appellants are the Directors of the Company,

they   are   not   to   be   held  vicariously  liable  and   cannot   be   made

accused in the proceedings.

14. It was further the case of the appellants that no notice relating

to dishonour of cheque dated 2nd June, 2012 has been received by

them and there is no averment made in the complaint that on the

date of issuance of cheque, the appellants were either the Managing

Directors   or   were   responsible   for   day­to­day   business   of   the

Company.

15. Mr. Sidhartha Dave, learned senior counsel for the appellants

in   Criminal   Appeal   @   SLP(Criminal)   No.   7573   of   2014   further

submits that they are the non­executive Directors of the Company

and were not responsible for the conduct of the business of the

Company which is the mandatory requirement for initiation of the

proceedings under Section 138 of NI Act and submits that the precondition as referred to under Section 141 of NI Act not being

complied   with,   the   order   passed   by   the   learned   trial   Judge   in

9

summoning the present appellants is nothing but a clear abuse of

process of law and the finding which has been recorded by the High

Court in the impugned judgment is not legally sustainable in law

and   in   support   of   his   submission   has   placed   reliance   on   the

judgments   of   this   Court   in  S.M.S.   Pharmaceuticals   Ltd.  Vs.

    Neeta Bhalla and Another1

 and Pooja Ravinder Devidasani Vs.

    State of Maharashtra and Another2

.

16. Per contra, Mr. Pallav Shishodia, learned senior counsel for

the respondents, while supporting the order passed by the High

Court in the impugned proceedings, submits that the appellants in

Criminal   Appeal   @   SLP(Criminal)   No.   7573   of   2014   claimed

themselves to be a non­executive Directors but the record indicates

that they are the Directors of the Company and in support thereof,

Form   No.   32   which   has   been   obtained   from   the   Registrar   of

Companies   placed   on   record   clearly   indicates   that   all   are   the

Directors of the Company as on 1st April 2007 and responsible to

the Company for the conduct of business actively involved in the

business of the Company and responsible for the affairs of the

1 2005(8) SCC 89

2 2014(16) SCC 1

10

Company and there is nothing to indicate that they were appointed

as non­executive Directors and what is being urged by the learned

counsel for the appellants may be their defence which is a matter of

trial and is not open to be examined at this stage and once the

compliance of the statute has been made as required by law, their

petitions have been rightly rejected by the High Court and needs no

further indulgence of this Court.

17. During   the   course   of   submission,   learned   counsel   for   the

respondents submits that apart from dishonour of cheque in the

instant matters, there are other cheques issued by the appellants

which were also dishonoured and separate complaints have been

filed   by   the   respondent(s)   but   because   of   the   pendency   of   the

present appeals before this Court, no action has been taken by the

trial Judge.   The details of the cases including this case are as

under:­

Sl. No. Case No. Court Cheque Amount(In Rupees)

1. S.C.C No.

2500/2012

3

rd

JMFC,

Amravati

10,00,000/­(Ten   Lakhs

only)   vide   Cheque   No.

493018 dated 02.06.2012

2. S.C.C. No.

4984/2012

3rd

JMFC,

Amravati

10,00,000/­(Ten   Lakhs

only)   vide   Cheque   No.

493017 dated 17.07.2012

3. S.C.C   No. 7

th 1,15,39,200/­(One   Crore

11

2600/2014 JMFC,

Amravati

Fifteen   Lakhs   Thirty   Nine

Thousand   and   Two

Hundred only) vide Cheque

No. 493007 to 493016 

Cheque   No.   493020   and

493021 

All dated 05.04.2014 

18. Learned counsel for the respondents have placed reliance on

the judgments of this Court in A.K. Singhania Vs. Gujarat State

    Fertilizer Company Limited and Another3

  and Gunmala Sales

Private Limited Vs.     Anu Mehta and Others4

.

19. We have heard learned counsel for the parties and with their

assistance perused the material available on record. 

20. In this regard, taking note of the three­Judge Bench decision

of   this   Court   in S.M.S.   Pharmaceuticals   Ltd.(supra)   would   be

apposite.  While dealing with an offence under Section 138 of the NI

Act, the Court explaining the duty of a Magistrate while issuing

process and his power to dismiss a complaint under Section 203

without even issuing process observed thus:­

3 2013(16) SCC 630

4 2015(1) SCC 103

12

“5. … a complaint must contain material to enable the Magistrate

to make up his mind for issuing process. If this were not the

requirement, consequences could be far­reaching. If a Magistrate

had to issue process in every case, the burden of work before the

Magistrate as well as the harassment caused to the respondents to

whom process is issued would be tremendous. Even Section 204 of

the Code starts with the words ‘if in the opinion of the Magistrate

taking   cognizance   of   an   offence   there   is   sufficient   ground   for

proceeding’.   The   words   ‘sufficient   ground   for   proceeding’   again

suggest  that  ground should  be made  out  in the complaint  for

proceeding against the respondent. It is settled law that at the time

of issuing of the process the Magistrate is required to see only the

allegations in the complaint and where allegations in the complaint

or the charge­sheet do not constitute an offence against a person,

the complaint is liable to be dismissed.”

21. After so stating, the Court analysed Section 141 of the NI Act

and after referring to certain other authorities answered a reference

which reads as follows:­ 

19(a) It is necessary to specifically aver in a complaint

under Section 141 that at the time the offence was

committed, the person accused was in charge of, and

responsible   for   the   conduct   of   business   of   the

company. This averment is an essential requirement of

Section   141   and   has   to   be   made   in   a   complaint.

Without this averment being made in a complaint, the

requirements   of   Section   141   cannot   be   said   to   be

satisfied.

(b) The answer to the question posed in sub­para (b)

has to be in the negative. Merely being a director of a

company is not sufficient to make the person liable

under Section 141 of the Act. A director in a company

cannot be deemed to be in charge of and responsible

to the company for the conduct of its business. The

requirement of Section 141 is that the person sought

to   be   made   liable   should   be   in   charge   of   and

responsible   for   the   conduct   of   the   business   of   the

company at the relevant time. This has to be averred

13

as a fact as there is no deemed liability of a director in

such cases.

(c)   The   answer   to   Question   (c)   has   to   be   in   the

affirmative.   The   question   notes   that   the   managing

director   or   joint   managing   director   would   be

admittedly in charge of the company and responsible

to the company for the conduct of its business. When

that is so, holders of such positions in a company

become liable under Section 141 of the Act. By virtue

of the office they hold as managing director or joint

managing director, these persons are in charge of and

responsible   for   the   conduct   of   business   of   the

company. Therefore, they get covered under Section

141.  So  far as  the signatory of  a  cheque  which  is

dishonoured is concerned, he is clearly responsible for

the incriminating act and will be covered under subsection (2) of Section 141.”

22. The   same   principle   has   been   reiterated   in S.K.

Alagh Vs.     State  of Uttar  Pradesh &  Others5

; Maharashtra  State

Electricity   Distribution   Co.   Ltd.   &   Another Vs. Datar

    Switchgear Ltd. and Others6

 and GHCL Employees Stock Option

Trust Vs.     India Infoline Limited7

.

23. In   the   light   of   the   ratio   in  S.M.S.   Pharmaceuticals   Ltd.

(supra) and later judgments of which a reference has been made

what is to be looked into is whether in the complaint, in addition to

5 2008 (5) SCC 662

6 2010 (10) SCC 479

72013 (4) SCC 505

14

asserting that the appellants are the Directors of the Company and

they   are   incharge   of   and   responsible   to   the   Company   for   the

conduct   of   the   business   of   the   Company   and   if   statutory

compliance of Section 141 of the NI Act has been made, it may not

open for the High Court to interfere under Section 482 CrPC unless

it   comes   across   some   unimpeachable,   incontrovertible   evidence

which   is   beyond   suspicion   or   doubt   or   totally   acceptable

circumstances which may clearly indicate that the Director could

not have been concerned with the issuance of cheques and asking

him to stand the trial would be abuse of process of Court.  Despite

the presence of basic averment, it may come to a conclusion that no

case is made out against the particular Director for which there

could be various reasons.

24. The issue for determination before us is whether the role of the

appellants in the capacity of the Director of the defaulter company

makes   them   vicariously   liable   for   the   activities   of   the   defaulter

Company as defined under Section 141 of the NI Act?   In that

perception,   whether   the   appellant   had   committed   the   offence

chargeable under Section 138 of the NI Act?

15

25. We are concerned in this case with Directors who are not

signatories to the cheques.   So far as Directors who are not the

signatories to the cheques or who are not Managing Directors or

Joint   Managing   Directors   are   concerned,   it   is   clear   from   the

conclusions drawn in the afore­stated judgment that it is necessary

to aver in the complaint filed under Section 138 read with Section

141 of the NI Act that at the relevant time when the offence was

committed, the Directors were in charge of and were responsible for

the conduct of the business of the company.  

26. This averment assumes importance because it is the basic and

essential averment which persuades the Magistrate to issue process

against   the   Director.     That   is   why   this   Court   in  S.M.S.

Pharmaceuticals   Ltd.(supra)   observed   that   the   question   of

requirement of averments in a complaint has to be considered on

the basis of provisions contained in Sections 138 and 141 of the NI

Act read in the light of the powers of a Magistrate referred to in

Sections   200   to   204   CrPC   which   recognise   the   Magistrate’s

discretion   to   take   action   in   accordance   with   law.     Thus,   it   is

16

imperative that if this basic averment is missing, the Magistrate is

legally justified in not issuing process.

27. In the case on hand, reading the complaint as a whole, it is

clear that the allegations in the complaint are that at the time at

which the cheques were issued by the Company and dishonoured

by the Bank, the appellants were the Directors of the Company and

were   responsible   for   its   business   and   all   the   appellants   were

involved in the business of the Company and were responsible for

all the affairs of the Company.  It may not be proper to split while

reading   the   complaint   so   as   to   come   to   a   conclusion   that   the

allegations as a whole are not sufficient to fulfil the requirement of

Section 141 of the NI Act.  The complaint specifically refers to the

point of time when the cheques were issued, their presentment,

dishonour and failure to pay in spite of notice of dishonour.  In the

given   circumstances,   we   have   no   hesitation   in   overruling   the

argument made by the learned counsel for the appellants.

28. Indisputedly,   on   the   presentation   of   the   cheque   of

Rs.10,00,000/­(Rupees Ten Lakhs only) dated 2nd  June 2012, the

cheque was dishonoured due to “funds insufficient” in the account

17

and after making due compliance, complaint was filed and after

recording   the   statement   of   the   complainant,   proceedings   were

initiated   by   the   learned   Magistrate   and   no   error   has   been

committed by the High Court in dismissing the petition filed under

Section 482 CrPC under the impugned judgment. 

29. The submission of learned counsel for the appellants that they

are the non­executive Directors in the light of the documentary

evidence placed on record by Form No. 32 issued by the Registrar of

Companies, both the appellants are shown to be the Directors of the

Company, still open for the appellants to justify during course of

the trial.

30. In   our   considered   view,   the   High   Court   has   rightly   not

interfered in exercise of its jurisdiction under Section 482 CrPC for

quashing of the complaint.

31. Before   concluding,   we   would   like   to   observe   that   the

proceedings could not be processed further in view of the interim

order passed by this Court dated 17th October 2014 and because of

the instant appeals, the other cases instituted by the respondent(s)­

complainant have been held up before the trial Court.  Since these

18

are the old cases instituted in the year 2012 and could not be

processed further because of the pendency of the appeals in this

Court, we may consider it appropriate to observe that let all the

three cases of which a reference been made in para 17 of this

Judgment be clubbed together and be disposed of expeditiously as

possible on its own merits in accordance with law without being

influenced/inhibited by the observations made by us in the present

judgment not later than six months from the date parties record

their attendance before the trial Court.  All the parties shall record

their attendance before the concerned trial Court on 22nd November,

2021.

32. Consequently, the appeals fail and are accordingly dismissed.

33. Pending application(s), if any, stand disposed of.

      ………………………..J.

          (AJAY RASTOGI)

      ..………………………J.

      (ABHAY S. OKA)

NEW DELHI

OCTOBER 08, 2021

19