REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1664 OF 2005
Pallav Sheth …..Appellant
Versus
Canara Bank …..Respondent
J U D G M E N T
SHIVA KIRTI SINGH, J.
This is an appeal under Section 10 of the Special Court (Trial of Offences
Relating to Transactions in Securities) Act, 1992, directed against the
final judgment and order dated 17.10.2005 of the Special Judge in Special
Case No. 1 of 2002.
In view of nature of the order proposed to be passed in this appeal, it is
not necessary to go into the details of the evidence. It would suffice to
notice that there was no serious dispute raised on behalf of the appellant
that he was liable to pay the agreed price of Rs.83,00,000/- for 20000
shares which were not returned to the respondent-bank. In fact the
appellant had admitted the liability and issued cheques to meet it but the
cheques were not honored. The defence of the appellant that such liability
was only a civil liability without any criminal intention was not accepted
by the learned Special Court. After discussing the relevant materials it
held that dishonest misappropriation of those shares on the part of the
accused is writ large. While rejecting the defence of the accused that
there was no criminal intention on his part in not paying the amount of
Rs.83,00,000/-, the learned Judge, Special Court in paragraph 23 of the
judgment under appeal has given lucid account of relevant facts for
reaching at such conclusion. Para 23 runs as follows:
“23. In this view of the matter, I do not find merit in the submissions
made on behalf of the accused. Dishonest intention is quite clear and it
is since beginning of the transaction. It is on the representation of the
accused that 20000 shares alongwith blank share transfer forms, duly signed
by the Authorised Officer, were delivered to the representative of the
accused, against post dated cheques, that was also as per the market
practice. What is pertinent to be noted is that the cheque was post dated,
the transaction took place on 2nd April, 1992. The delivery of the shares
and blank share transfer forms against the post dated cheque was made on
5.6.1992, the cheque was post dated of 20.06.1992. Before the due date of
the cheque, the accused had called the Complainant’s witness Sriram-PW2 and
requested them to present the cheque for encashment a little later.
Accordingly, the cheque came to be presented on 29.6.1992. It was
dishonoured. Again, the accused requested to present the cheque
subsequently and on such subsequent presentation also the cheque was
dishonoured. Then he happened to promise to issue Pay order, which he never
issued. He then delivered two cheques, one for Rs. 50,00,000/- and another
for Rs.33,00,000/-, both were dishonoured, not once but twice. This conduct
of the accused shows a clear dishonest intention of misappropriation of the
shares or its sell consideration.”
Since we were inclined to agree with the aforesaid view of the learned
Special Court on the basis whereof the appellant has been convicted for
offence under Section 409 of the Indian Penal Code and sentenced to suffer
RI for six months and to pay fine of Rs.1,00,000/- only and in default to
suffer RI for further three months, a suggestion was made by Mr. Rajiv
Dutta, learned senior advocate for the appellant, on the basis of
instructions received, that respondent bank should file a chart showing the
amount payable by the appellant after deducting the amount that has already
been paid and/or after taking into consideration the adjustment of shares
already made. In the light of such pro settlement stand on behalf of the
appellant, an order to that effect was passed on 24th February, 2016.
On the next and final date of hearing a chart showing the amount payable by
the appellant to the bank was produced by Ms. Radhika Gautam, learned
counsel for the respondent bank. As per the original chart Rs.58,10,000/-
is the principal amount decreed against the appellant vide order dated
3.5.2007 passed by the Special Court, Mumbai in Civil Suit No. 6 of 2002.
It further transpires that interest has also been allowed at the rate of
18% per annum from 20th June, 1992. After adjusting Rs.20,00,000/- paid by
the appellant in 2003 by way of part settlement, the balance amount with
same rate of interest till 29th February, 2016 has resulted into an amount
of Rs.2,86,17,424 payable by the appellant to the Bank as on 29th February,
2016.
On hearing counsel for both the parties, we found good chances of a
settlement between the parties if a substantial amount could be paid to the
bank by the appellant so as to virtually meet the entire decretal liability
within a reasonable period of time. On behalf of the appellant a strong
plea was made for working out such settlement but with a further plea that
in the larger interest of justice and considering his precarious financial
condition, the rate of interest may be reduced to a reasonable rate such as
12% per annum.
On our persuasion, learned counsel for the respondent-Bank obtained
instructions and conveyed that the respondent-bank was willing for such a
settlement. It was also made clear that a reasonable rate of interest as
may be determined by this Court will be acceptable to the respondent-Bank.
On recalculation with rate of interest at 12% per annum and adjustment of
Rs.20,00,000/- already made, according to learned counsel for the
respondent-bank the total amount payable by the appellant as on 29.2.2016
would be Rs.2,03,10,400/- only. Learned senior counsel for the appellant
has conveyed acceptance but pleaded that the appellant be given six months
time to pay the decretal amount due to the Bank with modified rate of
interest at the 12% per annum. It was accepted on behalf of the appellant
that the entire dues calculated at the rate of 12% per annum shall be paid
in two installments, first one payable by end of three months and the final
by end of six months from today.
In the aforesaid facts and circumstances, in the special facts and larger
interest of justice this appeal is disposed of in the following terms:
Since the settlement indicated above have been accepted by the parties, the
same is recorded as a part of this judgment and order.
The appellant shall pay the decretal amount with interest calculated at the
rate of 12% per annum (in place of 18% per annum) from 20th June, 1992 with
adjustment of Rs.20,00,000/- already paid in 2003, in two installments
payable in three months and six months time respectively. On such payment
the sentence imposed upon the appellant shall stand reduced to the period
already undergone along with fine of Rs.1,00,000/-.
The decree of the Special Court, Mumbai in Civil Suit No. 6 of 2002 will be
treated to have been satisfied by the appellant on his making the payment
of the settlement amount indicated above.
In case the settlement amount is not paid by the appellant in the manner
and to the extent indicated above, then after six months this order shall
stand recalled and the appellant shall surrender to serve out the remaining
period of sentence of RI for six months as per the judgment under appeal
which shall then stand confirmed by this Court.
The Appeal is disposed of accordingly.
.…………………………………….J.
[DIPAK MISRA]
……………………………………..J.
[SHIVA KIRTI SINGH]
New Delhi.
April 13, 2016.
-----------------------
6
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1664 OF 2005
Pallav Sheth …..Appellant
Versus
Canara Bank …..Respondent
J U D G M E N T
SHIVA KIRTI SINGH, J.
This is an appeal under Section 10 of the Special Court (Trial of Offences
Relating to Transactions in Securities) Act, 1992, directed against the
final judgment and order dated 17.10.2005 of the Special Judge in Special
Case No. 1 of 2002.
In view of nature of the order proposed to be passed in this appeal, it is
not necessary to go into the details of the evidence. It would suffice to
notice that there was no serious dispute raised on behalf of the appellant
that he was liable to pay the agreed price of Rs.83,00,000/- for 20000
shares which were not returned to the respondent-bank. In fact the
appellant had admitted the liability and issued cheques to meet it but the
cheques were not honored. The defence of the appellant that such liability
was only a civil liability without any criminal intention was not accepted
by the learned Special Court. After discussing the relevant materials it
held that dishonest misappropriation of those shares on the part of the
accused is writ large. While rejecting the defence of the accused that
there was no criminal intention on his part in not paying the amount of
Rs.83,00,000/-, the learned Judge, Special Court in paragraph 23 of the
judgment under appeal has given lucid account of relevant facts for
reaching at such conclusion. Para 23 runs as follows:
“23. In this view of the matter, I do not find merit in the submissions
made on behalf of the accused. Dishonest intention is quite clear and it
is since beginning of the transaction. It is on the representation of the
accused that 20000 shares alongwith blank share transfer forms, duly signed
by the Authorised Officer, were delivered to the representative of the
accused, against post dated cheques, that was also as per the market
practice. What is pertinent to be noted is that the cheque was post dated,
the transaction took place on 2nd April, 1992. The delivery of the shares
and blank share transfer forms against the post dated cheque was made on
5.6.1992, the cheque was post dated of 20.06.1992. Before the due date of
the cheque, the accused had called the Complainant’s witness Sriram-PW2 and
requested them to present the cheque for encashment a little later.
Accordingly, the cheque came to be presented on 29.6.1992. It was
dishonoured. Again, the accused requested to present the cheque
subsequently and on such subsequent presentation also the cheque was
dishonoured. Then he happened to promise to issue Pay order, which he never
issued. He then delivered two cheques, one for Rs. 50,00,000/- and another
for Rs.33,00,000/-, both were dishonoured, not once but twice. This conduct
of the accused shows a clear dishonest intention of misappropriation of the
shares or its sell consideration.”
Since we were inclined to agree with the aforesaid view of the learned
Special Court on the basis whereof the appellant has been convicted for
offence under Section 409 of the Indian Penal Code and sentenced to suffer
RI for six months and to pay fine of Rs.1,00,000/- only and in default to
suffer RI for further three months, a suggestion was made by Mr. Rajiv
Dutta, learned senior advocate for the appellant, on the basis of
instructions received, that respondent bank should file a chart showing the
amount payable by the appellant after deducting the amount that has already
been paid and/or after taking into consideration the adjustment of shares
already made. In the light of such pro settlement stand on behalf of the
appellant, an order to that effect was passed on 24th February, 2016.
On the next and final date of hearing a chart showing the amount payable by
the appellant to the bank was produced by Ms. Radhika Gautam, learned
counsel for the respondent bank. As per the original chart Rs.58,10,000/-
is the principal amount decreed against the appellant vide order dated
3.5.2007 passed by the Special Court, Mumbai in Civil Suit No. 6 of 2002.
It further transpires that interest has also been allowed at the rate of
18% per annum from 20th June, 1992. After adjusting Rs.20,00,000/- paid by
the appellant in 2003 by way of part settlement, the balance amount with
same rate of interest till 29th February, 2016 has resulted into an amount
of Rs.2,86,17,424 payable by the appellant to the Bank as on 29th February,
2016.
On hearing counsel for both the parties, we found good chances of a
settlement between the parties if a substantial amount could be paid to the
bank by the appellant so as to virtually meet the entire decretal liability
within a reasonable period of time. On behalf of the appellant a strong
plea was made for working out such settlement but with a further plea that
in the larger interest of justice and considering his precarious financial
condition, the rate of interest may be reduced to a reasonable rate such as
12% per annum.
On our persuasion, learned counsel for the respondent-Bank obtained
instructions and conveyed that the respondent-bank was willing for such a
settlement. It was also made clear that a reasonable rate of interest as
may be determined by this Court will be acceptable to the respondent-Bank.
On recalculation with rate of interest at 12% per annum and adjustment of
Rs.20,00,000/- already made, according to learned counsel for the
respondent-bank the total amount payable by the appellant as on 29.2.2016
would be Rs.2,03,10,400/- only. Learned senior counsel for the appellant
has conveyed acceptance but pleaded that the appellant be given six months
time to pay the decretal amount due to the Bank with modified rate of
interest at the 12% per annum. It was accepted on behalf of the appellant
that the entire dues calculated at the rate of 12% per annum shall be paid
in two installments, first one payable by end of three months and the final
by end of six months from today.
In the aforesaid facts and circumstances, in the special facts and larger
interest of justice this appeal is disposed of in the following terms:
Since the settlement indicated above have been accepted by the parties, the
same is recorded as a part of this judgment and order.
The appellant shall pay the decretal amount with interest calculated at the
rate of 12% per annum (in place of 18% per annum) from 20th June, 1992 with
adjustment of Rs.20,00,000/- already paid in 2003, in two installments
payable in three months and six months time respectively. On such payment
the sentence imposed upon the appellant shall stand reduced to the period
already undergone along with fine of Rs.1,00,000/-.
The decree of the Special Court, Mumbai in Civil Suit No. 6 of 2002 will be
treated to have been satisfied by the appellant on his making the payment
of the settlement amount indicated above.
In case the settlement amount is not paid by the appellant in the manner
and to the extent indicated above, then after six months this order shall
stand recalled and the appellant shall surrender to serve out the remaining
period of sentence of RI for six months as per the judgment under appeal
which shall then stand confirmed by this Court.
The Appeal is disposed of accordingly.
.…………………………………….J.
[DIPAK MISRA]
……………………………………..J.
[SHIVA KIRTI SINGH]
New Delhi.
April 13, 2016.
-----------------------
6
