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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 18TH DAY OF FEBRUARY, 2019

BEFORE

THE HON’BLE MR.JUSTICE B.A.PATIL

I.A.No.3/2018

IN

CRIMINAL REVISION PETITION NO.425/2018

BETWEEN :

Sri V. Narasimha Murthy

S/o late Venkataramanappa

Aged about 46 years

Partner of Darshan Auto Service

R/at No.289/4,

Begur Main Road, Begur,

Bengaluru-560 068. .. Applicant

(By Sri C.H.Jadhav, Senior Counsel for

Smt. Rashmi Jadhav, Advocate)

AND :

Sri Santhosh J.,

S/o Sri Jaipal

Aged about 39 years

R/at No.723, 62nd Cross 5th Block, Rajajinagar

Bengaluru-560 010.

… Respondent (By Sri S. Mahesh, Advocate for

Sri S. Vinod, Advocate)

R

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This I.A.No.3/2018 is filed under Section 148 of Negotiable Instruments Act r/w 482 of Cr.P.C. praying to

release the amount deposited by the accused before the

Chief Judicial Magistrate, Bangalore Rural District, Bangalore, in CC.No.5021/2013, vide order dated

24.4.2018 passed by the Hon’ble High Court, in favour of

the applicant-complainant.

This I.A.No.3/2018 having been heard and reserved

on 07.02.2019 coming on for pronouncement of orders

this day, the Court made the following:-

ORDER ON IA NO.3/2018

The present application has been filed by the

respondent-complainant under Section 148 of The

Negotiable Instruments Act, (‘Act’ for short) r/w. Section

482 of Cr.P.C. praying to release the amount in deposit

made by the petitioner-accused in C.C.No.5021/2013 as

per the order passed by this Court dated 24.4.2018.

The said application is accompanied with affidavit of the

respondent-complainant. In the said affidavit it is

contended that in order to discharge the legal

enforceable debt, two post dated cheques dated 2.5.2013

for a sum of Rs.50,00,000/- and Rs.10,00,000/- had

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been issued, but subsequently the said cheques were

dishonoured and thereafter a legal notice was issued. As

the accused did not pay the amount, the complainant

filed a complaint under Section 138 of the Negotiable

Instruments Act. The Court below after considering the

material placed on record, by the order dated 27.10.2016

convicted the accused for the offence punishable under

Section 138 of the Act and sentenced him to undergo

simple imprisonment for a period of one year and to pay

a fine of Rs.70,00,000/-. The trial Court also held that in

default of payment, the accused shall also undergo

further simple imprisonment for a period of three months

and out of the said fine amount, an amount of

Rs.69,00,000/- was ordered to be paid as a

compensation to the complainant. Being aggrieved by the

same, accused preferred Criminal Appeal No.67/2016

before the VII Additional District and Sessions Judge,

Bangalore Rural District, Bangalore. The said appeal

came to be dismissed on 24.3.2018. Against the said

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judgment, the present revision petition is filed by the

accused with an application in I.A.No.1/2018 praying to

suspend the sentence imposed against him.

2. This Court by an order dated 24.4.2018 allowed

I.A.No.1/2018 by suspending the sentence and directing

the petitioner-accused to deposit 75% of the cheque

amount before the trial Court.

3. Now, I.A.No.3/2018 is filed by the complainant-

respondent praying to release the amount deposited by

the accused. It is stated in the affidavit filed in support

of the application that the complainant has been deprived

of the money for more than seven years and he had

performed the marriage ceremony of his daughter by

borrowing the hand loan. In order to clear the said loan

and marriage expenses, he required the said amount. On

these grounds he prayed to allow the application and to

release the amount in deposit.

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4. The said application has been seriously contested

by the petitioner-accused by filing his objections

contending that the provisions of Section 148 of the Act

cannot be invoked by the respondent-complainant since

imposing of the fine was passed by the trial Court prior to

amendment, i.e. on 27.10.2016. At that point of time,

the provisions of Section 148 of the Act were not in

existence and it came into force only on 2.8.2018 and it

is not having any retrospective effect. It is further

contended that the said application is not maintainable

and the same is liable to be dismissed.

5. I have heard Sri C.H.Jadhav, learned Senior

Counsel for the applicant-complainant and the learned

counsel for the accused.

6. It is the submission of the learned Senior

Counsel for the applicant-complainant that Section 148 of

the Act is a specific provision which supersedes general

law and as per Section 401(4) of Cr.P.C., it over shadows

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the general power and even though it is a revisional

power, it is like an appellate power. He further submitted

that the law can be given retrospective effect when it is a

beneficial legislation. The object of the Act was to give

benefit to the complainant who has suffered at the hands

of the accused. He further submitted that the trial Court

convicted the accused and the first appellate Court has

also confirmed the same. Already there is a concurrent

finding that the accused has committed an offence

punishable under Section 138 of the Act. He further

submitted that under Section 401 of Cr.P.C. wide power

has been given to the Court and the technicalities should

be kept to a bear minimum, in order to avoid injustice.

On these grounds he prayed to allow the application.

7. Per contra, the learned counsel for the accused

vehemently argued and submitted that unless the terms

of the statute expressly so provided, it cannot be given

retrospective operation. It should be given only

prospective effect. He further submitted that the

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judgment and order of conviction and sentence was

passed on 27.10.2016 and thereafter an appeal has been

preferred. Section 148 of the Act was amended by

Notification dated 2.1.2018 and it came into force only

on 2.8.2018. In that light, he submitted that the

complainant is not entitled to release of the said amount.

He further submitted that a logical corollary of the

general rule is that the statute will be having prospective

operation until it has specifically stated that it is having a

retrospective operation. In order to substantiate the said

contention he relied upon the decision in the case of

S.L.Srinivasa Jute Twine Mills (P) Ltd. Vs. Union of

India and Another reported in (2006)2 SCC 740. By

referring Section 148 of the Act, he further submitted

that the word used is “appellate Court”, which itself

clearly goes to show that it is the first appellate Court

which has been empowered to release the amount in the

event of deposit. He further submitted that already a

right has been existing in favour of the accused. The said

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right cannot be taken away by interpreting the said

statute, otherwise than the one for which it has been

made. By relying upon the decision of Punjab and

Haryana High Court in the case of Amandeep Singh Vs.

Monika Batia reported in CRM-M 54046-2018 he

submitted that the appellate Court has to decide the case

on merits and it cannot dispose of the Interlocutory

Applications for release of the amount. On these

grounds, he prayed to dismiss the application.

8. I have carefully and cautiously gone through the

submissions made by the learned counsel appearing for

the parties and I have given my anxious consideration to

the citations quoted by the learned counsel for the

accused.

9. Before going to consider the submissions made

by the learned counsel appearing for the parties it is the

case of the complainant that the complainant and

accused were acquainted with each other. In obligation of

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the financial transactions, the complainant handed over

an amount of Rs.60,00,000/- to the accused for the

purpose of erecting and to display hoardings at various

locations and the accused agreed to repay the same

within one year and the said amount was given by the

complainant by way of two demand drafts amounting to

Rs.30,00,000/- each on 14.3.2011 and on 16.3.2011

drawn on Syndicate Bank. Thereafter, accused did not

pay and he issued a cheque dated 2.5.2013 for a sum of

Rs.50,00,000/- drawn on HDFC Bank and another cheque

for Rs.10 lakhs drawn on Andhra Bank and when they

were presented, they returned with the postal shara as

‘insufficient funds’. Thereafter, a legal notice dated

15.5.2013 was issued. In spite of service of notice,

accused did not pay the said cheque amount within the

statutory period and as such the complaint was

registered. After considering the material placed on

record, the trial Court convicted the accused and

sentenced him to undergo simple imprisonment for a

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period of one year and to pay a fine of Rs.70,00,000/-.

The trial Court also held that in default of payment, the

accused shall undergo further simple imprisonment for a

period of three months out of the fine amount, accused

shall pay an amount of Rs.69,00,000/- as a

compensation to the complainant. Against which,

Criminal Appeal No.67/2016 was filed and the same was

dismissed on 24.3.2018 by confirming the order of the

Court below. Against the said order, the accused filed

the present criminal revision petition before this Court.

This Court by its order dated 24.4.2018 on the

submission made by the learned counsel for the

petitioner-accused that he is ready and willing to deposit

50% of the cheque amount including the amount which

has been already deposited, suspended the sentence

subject to the petitioner-accused depositing 75% of the

cheque amount inclusive of the amount already

deposited. Now the respondent-complainant has filed

I.A.No.3/2018 for release of the said amount.

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10. It is the specific contention of the learned

counsel for the accused that as on the date of the

conviction, Section 148 of the Act was not there in the

Act and as such it cannot be given retrospective effect

and the application is not maintainable.

11. Whereas, it is the contention of the Learned

Senior counsel for the complainant that High Court has

wide power amenable under Section 401 of Cr.P.C. on its

discretion exercise any of the powers conferred on a

Court of Appeal and in that light he submitted that

though in Section 148 of the Act the word “appellate

Court” is used, this Court can also exercise the power of

the appellate Court and release 20% of the amount in

deposit.

12. Before going to consider the submissions, I feel

it just and proper to quote Section 401 of Cr.P.C. which

reads as under:-

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“401: High Court’s Power of

revision.- (1) In the case of any proceeding

the record of which has been called for by

itself or which otherwise comes to its

knowledge, the High Court may, in its

discretion, exercise any of the powers

conferred on a Court of Appeal by Sections

386, 389, 390 and 391 or on a Court of

Session by Section 307 and, when the

Judges composing the Court of revision are

equally divided in opinion, the case shall be

disposed of in the manner provided by

Section 392.

(2) No order under this section shall be

made to the prejudice of the accused or

other person unless he has had an

opportunity of being heard either personally

or by pleader in his own defence.

(3) Nothing in this section shall be

deemed to authorise a High Court to convert

a finding of acquittal into one of conviction.

(4) Where under this Code an appeal

lies and no appeal is brought, no proceeding

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by way of revision shall be entertained at the

instance of the party who could have

appealed.

(5) Where under this Code an appeal

lies but an application for revision has been

made to the High Court by any person and

the High Court is satisfied that such

application was made under the erroneous

belief that no appeal lies thereto and that it

is necessary in the interests of justice so to

do, the High Court may treat the application

for revision as a petition of appeal and deal

with the same accordingly.”

13. It is also relevant to quote here itself Section

148 of the Act which reads as under:-

“148: Power of Appellate Court to

order payment pending appeal against

conviction: (1) Notwithstanding anything

contained in the code of Criminal Procedure,

1973 (2 of 1974), in an appeal by the

drawer against conviction under Section 138,

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the Appellate Court may order the appellant

to deposit such sum which shall be a

minimum of twenty per cent of the fine or

compensation awarded by the trial Court:

PROVIDED that the amount payable

under this sub-section shall be in addition to

any interim compensation paid by the

appellant under Section 143A.

(2) The amount referred to in sub-

section (1) shall be deposited within sixty

days from the date of the order, or within

such further period not exceeding thirty days

as may be directed by the Court on sufficient

cause being shown by the appellant.

(3) The Appellate Court may direct the

release of the amount deposited by the

appellant to the complainant at any time

during the pendency of the appeal:

PROVIDED that if the appellant is

acquitted, the Court shall direct the

complainant to repay to the appellant the

amount so released, with interest at the

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bank rate as published by the Reserve Bank

of India, prevalent at the beginning of the

relevant financial year, within sixty days

from the date of the order, or within such

further period not exceeding thirty days as

may be directed by the Court on sufficient

cause being shown by the complainant.”

14. On close reading of Section 148 of the Act that

the appellate Court may order the accused to deposit a

minimum of 20% of the fine amount or the compensation

awarded by the trial Court and if the said amount is

deposited within 60 days from such order, the said Court

may direct to release the amount in deposit made by the

accused to the complainant during the pendency of the

matter. Proviso of the said Act says that while releasing

such amount, the complainant must be directed to repay

the said amount in the event of acquittal of the accused

with interest at the bank rate which was prevailing during

the said period.

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15. On plain reading of the said Section it indicates

that it is the appellate Court which has got power to

order for release of such amount which has been

deposited by the accused. The crucial question which

arises for my consideration is: “What is the effect of

amendment of Section 148 of the Act?” It is a cardinal

principle of construction that every statute is prima facie

prospective in nature, unless it is expressly or by

necessary implication made to have retrospective

operation. This proposition of law has been laid down by

the Hon’ble Apex Court in the case of Keshavan Madhava

Menon Vs. State of Bombay reported in AIR 1951 SC

128 and the same has also been referred at paragraph-

18 of the decision in the case of S.L.Srinivasa Jute

Twine Mills (P) Ltd., Vs. Union of India and Another

(cited supra), which reads as under:-

“18. It is a cardinal principle of

construction that every statute is prima facie

prospective unless it is expressly or by

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necessary implication made to have

retrospective operation.(See Keshvan

Madhava Menon v. State of Bombay.) But

the rule in general is applicable where the

object of the statute is to affect vested rights

or to impose new burdens or to impair

existing obligations. Unless there are words

in the statute sufficient to show the intention

of the Legislature to affect existing rights, it

is deemed to be prospective only 'nova

constitutio futuris formam imponere debet

non praeteritis'. In the words of Lord

Blanesburg,

"provisions which touch a right in

existence at the passing of the statute

are not to be applied retrospectively in

the absence of express enactment or

necessary intendment." (See Delhi

Cloth & General Mills Co. Ltd. v. CIT,

AIR p.244).

"Every statute, it has been said", observed

Lopes, L.J.,

"which takes away or impairs vested

rights acquired under existing laws, or

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creates a new obligation or imposes a

new duty, or attaches a new disability

in respect of transactions already past,

must be presumed to be intended not

to have a retrospective effect."(See

Amireddi Rajagopala Rao v. Amireddi

Sitharamamma.)

As a logical corollary of the general rule, that

retrospective operation is not taken to be

intended unless that intention is manifested

by express words or necessary implication,

there is a subordinate rule to the effect that

a statute or a section in it is not to be

construed so as to have larger retrospective

operation than its language renders

necessary. (See Reid v. Reid.) In other

words close attention must be paid to the

language of the statutory provision for

determining the scope of the retrospectivity

intended by Parliament. (See Union of India

v. Raghubir Singh) The above position has

been highlighted in "Principles of Statutory

Interpretation" by Justice G.P. Singh. (10th

Edn., 2006 at pp. 474 and 475.)

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16. On close reading of the said paragraph it is

made clear that the amended provision if it touches a

right which was in existence then it will be applied

prospectively and it should not be applied retrospectively.

Even in the case of Keshavan Madhava Menon Vs. State

of Bombay (cited supra), it is not only express provision,

but necessary implication has to be seen about the said

interpretation. On going through the facts of the case on

hand, there is no vested right acquired under the existing

law to create a new obligation or imposes a new duty to

the accused. Already there is a concurrent finding of both

the Courts and even when he filed a revision petition

before this Court and sought for stay, he voluntarily

deposited 50% of the cheque amount including the

amount which has already been deposited. In that light,

it is necessary to refer to the statement of objections and

reasons of enactment of Section 148 of the Act, which

read as under:-

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“The Negotiable Instruments Act, 1881 (the

Act) was enacted to define and amend the law

relating to Promissory Notes, Bills of Exchange

and Cheques. The said Act has been amended

from time to time so as to provide, inter alia,

speedy disposal of cases relating to the offence

of dishonour of cheques. However, the Central

Government has been receiving several

representations from the public including trading

community relating to pendency of cheque

dishonour cases. This is because of delay tactics

of unscrupulous drawers of dishonoured cheques

due to easy filing of appeals and obtaining stay

on proceedings. As a result of this, injustice is

caused to the payee of a dishonoured cheque

who has to spend

considerable time and resources in court

proceedings to realise the value of the cheque.

Such delays compromise the sanctity of cheque

transactions.

2. It is proposed to amend the said Act

with a view to address the issue of undue delay

in final resolution of cheque dishonour cases so

as to provide relief to payees of dishonoured

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cheques and to discourage frivolous and

unnecessary litigation which would save time

and money. The proposed amendments will

strengthen the credibility of cheques and help

trade and commerce in general by allowing

lending institutions, including banks, to continue

to extend financing to the productive sectors of

the economy.

3. It is, therefore, proposed to introduce

the Negotiable Instruments (Amendment) Bill,

2017 to provide, inter alia, for the following,

namely:—

(i) to insert a new section 143A in the said

Act to provide that the Court trying an offence

under section 138 may order the drawer of the

cheque to pay interim compensation to the

complainant, in a summary trial or a summons

case, where he pleads not guilty to the

accusation made in the complaint; and in any

other case, upon framing of charge. The interim

compensation so payable shall be such sum not

exceeding twenty per cent. of the amount of the

cheque; and

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(ii) to insert a new section 148 in the said

Act so as to provide that in an appeal by the

drawer against conviction under section 138, the

Appellate Court may order the appellant to

deposit such sum which shall be a minimum of

twenty per cent. of the fine or compensation

awarded by the trial court.

4. The Bill seeks to achieve the above

objectives”

17. On perusal of the reasons for enacting Section

148 of the Act, it discloses that cheque bounce cases are

pending because of dishonour of cheques and there are

delaying tactics of unscrupulous drawers of dishonours

due to easy filing of appeals and obtaining the stay and

in order to avoid injustice caused to the complainant and

to provide a relief and to discourage frivolous and

unnecessary litigations and to save the time of the Court,

the proposed amendment has been made. With that

letter and spirit, if Section 148 of the Act is read, then

though the word used is “appellate Court”, it also

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includes this Court which is exercising all the powers as

enumerated under Section 401 of Cr.P.C. This Court

while considering the revision, can also exercise the

power under Section 386 of Cr.P.C. and other incidental

provisions. When the said enactment has been made as a

beneficial legislation, to protect the interest of the

complainant and to provide a relief and to avoid and

discourage frivolous appeals and litigations, then under

such circumstances, a wider interpretation has to be

made and not a restricted interpretation as held in the

case of S.L.Srinivasa Jute Twine Mills (P) Ltd. Vs. Union

of India and Another (cited supra). It is not express

provision which has to be taken into consideration but it

can take even the necessary implication and give a

retrospective operation. In that light, this Court can give

the retrospective effect to the said Section. In that light,

the contentions raised by the learned counsel for the

accused is not acceptable. Though he has quoted the

decision of the Panjab and Haryana High Court in the

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case of Amandeep Singh Vs. Monika Batia (cited supra),

wherein the detailed discussion of the issue has not been

dealt with and the same is not applicable to the facts of

the case on hand, by combined reading of the object and

reasons and the statute with Section 401 of Cr.P.C., I am

of the considered opinion that by implication, the statute

can be given retrospective effect. Even though it is not

specifically stated in the statute “revisional Court”, but as

stated above, this Court can also exercise the said

power, this Court in the interest of justice, may treat the

application for revision as a petition of appeal and deal

with the same as contemplated under Section 401 of

Cr.P.C. In that light, all the contentions which have been

raised by the learned counsel for the accused are not

sustainable in law and the same are rejected.

18. In that light, the trial Court is directed to

release 20% of the amount in deposit made by the

accused under Section 148 of the Act with condition that

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if the accused is acquitted in this case, the complainant

has to repay the said amount of 20% so released in

favour of him with interest at the bank rate as on the

date of release. The complainant has to execute an

indemnity bond with two sureties for the like sum to the

satisfaction of the trial Court to the effect that in the

event of acquittal of the accused, he shall indemnify the

said amount with interest at the bank rate as on the date

of release of the amount.

With the aforesaid observations, I.A.No.3/2018 is

disposed of.

Sd/-

JUDGE

*ap/ck/-