INFORMATION FOR ALL

Supreme Court imposes Rs 5 lakh for not adhering undertaking to Pay(NI Act),

Judgement By Hon’ble Justice Vikram Nath and Justice Rajesh Bindal on 3rd Jan’24

The fact of this case bring to light a situation marked by a persistent disregard for judicial directives and a careless approach to legal and financial obligations. The behavior of the Petitioner stands as a testament to how an individual’s casual attitude towards financial responsibilities and court orders can undermine the essence of judicial efficacy.

The present appeal assails the correctness of the judgement and order dated 23.07.2019 passed by the High Court, Bombay cancelling the order of suspension of sentence and bail granted to the appellant as also the intervenor (petitioner before the High Court) vide order dated 03.07.2018 as they violated the undertaking given before the High Court on 03.07.2018 and recorded in the order of even date and further violated the condition contained in the order dated 20.03.2019 granting extension of time to comply.

The appellant, Satish P. Bhatt and the intervenor Vishwanath Ramakrishna Nayak were chairman-cum-Managing Director and Vice Chairman of a company by the name of M/s Astral Glass Private Limited (in short the AGPL). The Company AGPL, as also the appellant and the intervenor were convicted for offence under section 138 of the Negotiable Instrument Act 1881 vide judgement and order of the Trial Court dated 26.08.2011 in three separate cases and were awarded sentence of ten months with total liabilities of Rs 5 crore cumulatively in all the three cases.

Three appeals jointly filed by the appellant, the intervenor as also AGPL were dismissed by the Sessions Court vide common judgement and order dated 30.01.2014. The Sessions Court granted a month’s time to surrender in order to undergo the sentences.

Aggrieved by the same, they preferred three revisions before the High Court as originally there were three complaints. Before the High Court , the appellant and the intervenor filed an undertaking based on a settlement on 03.07.2018 according to which it was agreed that a total sum of Rs 4,63,50,000/- (Rupees Four Crores and sixty three Lacs and fifty thousand) would be paid to the complainant respondent no-02. Out of the said amount Rs 73,50,000/- had already been paid before the appeal Court. As such, the remaining amount of Rs 3,90,00,000/- was to paid in installments and in default of payment by either of them as per their agreed share in the settlement they would be held liable and would be prosecuted as per Law.

Based on undertaking, relief granted by the High Court. Rupees two crores was to be paid on or before 30th September 2018, in addition to Rs 25 Lakhs which was paid on the date of passing of the order. Remaining amount of Rs 1 Core 65 lakhs was to be paid on or before 15th March 2019. Thereafter the matter was taken up by the High Court on 20th March,2019 by which time they had paid only Rs 82 lakhs. Further time was sought to pay the balance amount till 20th April ,2019. The High Court on 20.03.2019 extended the time for payment of Rs 1,69,10,000/- till 20th April,2019 and further provided that if the said amount was not paid then the order granted bail and also suspending the sentence shall stand cancelled forthwith without further reference to Court.

Satish P. Bhatt filed a Criminal application in the pending revision on 16th April ,2019 stating that he had paid his share of Rs 1,95,00,000/- being 50% of Rs 3,90,00,000/- as mentioned in the order dated 3rd July ,2018 and, therefore , he may be absolved of the charges and acquitted.

On 23rd July,2019, the High Court passed the impugned order cancelling the suspension of sentence and bail granted vide order dated 3rd July 2018 for non -compliance of the undertaking and in view of the order dated 20th March ,2019 wherein while extending the time ,it was observed that in case of default, the bail order and the suspension of sentence order would stand automatically withdrawn without reference to the court.

Judgement of Supreme court;

“ We are not inclined to go in this question as to who is to pay how much amount. The Fact remains that the total amount agreed to be paid has not been paid and as per the order of the High Court dated 20.03.2019 the revisionists being in default in payment of the agreed amount, the interim protection granted by way of bail and suspension of sentence, would stand withdrawn without reference to the court , no infirmity in the impugned order.

There is a protection provided by this court vide order dated 26.08.2019 regarding stay of arrest, as a result of which the appellant and the intervenor have still not undergone the sentence. On the other hand , the complainant has still not reaped not only the fruits of the order dated 03.07.2018 but also of the order of the Trial Court dated 26.08.2011. He agreed to receive a much lesser amount than he was entitled to under the order of the Trail Court. He has been litigating since 2007 almost 16 years.

We, accordingly, do not find any illegality in the order passed by the High Court. The appeal is accordingly dismissed with costs quantified at Rs 5 lakhs to be paid to the respondent No02(Complainant) within four weeks from today. It is clarified that this amount of costs will not be
adjusted against the compensation.”

DISCLAIMER:

i) This opinion/clarification note is based on the facts provided to us and the same is being issued without any knowledge of intent, prejudice, non-disclosure, misrepresentation, or concealment of facts if any.

ii) We have not done investigation of correctness of facts and the limited opinion represents our understanding of the provisions of the law on the matter. The compliance mentioned above is not exhaustive and other compliance may also be involved depending on case to case basis.

iii) The conclusions reached and views expressed are matters of opinion based on our understanding of the related laws, rules, notifications, Citations, circulars, etc.

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