Criminal Appeal No. 1160 of 2019 @ SLP(Crl.)No.3342 of 2019 G.J. Raja  vs.  Tejraj Surana

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Reportable  IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1160  OF  2019 (Arising out of Special Leave Petition (Criminal)No.3342 of 2019)

G.J. RAJA …Appellant

VERSUS

TEJRAJ SURANA …Respondent

J U D G M E N T[

Uday Umesh Lalit, J.

1. Leave granted.

2.         This Appeal challenges the Final Order dated 08.02.2019 passed by

the High Court of Judicature at Madras in Criminal O.P.No.3406 of 2019

preferred by the Appellant herein.   

3.   Complaint  under Section 138 of  the Negotiable Instruments Act,

1881 (hereinafter referred to as ‘the Act’) being C.C.No.7171 of 2018 is

presently pending against the Appellant before the IInd Fast Track Court

-Metropolitan Magistrate, Egmore, Chennai.  According to the complaint,

two cheques  issued by the  Appellant  in  the  sums of  Rs.20,00,000/-  and

Rs.15,00,000/- in favour of the Respondent-Complainant were dishonoured

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on  account  of  insufficiency  of  funds.   The  Complaint  was  lodged  on

04.11.2016.  

4. With effect from 01.09.2018, Section 143A was inserted in the Act by

Amendment Act 20 of 2018.  Said Section is to the following effect:-

“143A.  Power to direct  interim compensation.  – (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the Court trying  an  offence  under  section  138  may  order  the drawer of the cheque to pay interim compensation to the complainant –  

(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

(b) in any other case, upon framing of charge.

(2)  The interim compensation under sub-section (1) shall not exceed twenty per cent of the amount of the cheque.

(3)   The interim compensation shall  be  paid within sixty  days  from  the  date  of  the  order  under  sub- section  (1),  or  within  such  further  period  not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent  at  the  beginning  of  the  relevant  financial years, 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.

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(5) The  interim  compensation  payable  under  this section may be recovered as if it  were a fine under section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).

(6) The amount of fine imposed under section 138 or the  amount  of  compensation awarded under section 357 of the Code of Criminal Procedure, 1973 (2 of 1974),  shall  be  reduced  by  the  amount  paid  or recovered  as  interim  compensation  under  this section.”

5.         Soon thereafter, the Trial Court ordered that 20% of the cheque

amount  be  made  over  by  the  Appellant  to  the  Respondent  as  interim

compensation in accordance with the provisions of Section 143A of the

Act.  Thus, the Appellant was directed to pay to the Respondent a sum of

Rs.7,00,000/-.

6.         The Appellant being aggrieved, filed Criminal O.P.No.3406 of 2019

in the High Court.  By its order dated 08.02.2019, the High Court found no

illegality or infirmity in the order awarding interim compensation under

Section  143A of  the  Act  but  reduced  the  percentage  from 20% of  the

cheque amount to 15% of the cheque amount.

7.         The order of the High Court is presently under challenge.  While

issuing notice the Appellant was directed to deposit the sum so ordered by

the High Court in the Trial Court.  It was further directed that upon deposit,

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the  Trial  Court  should  invest  the  money in  Fixed Deposit  and that  the

money  would  not  be  made  over  to  the  Respondent  till  further  orders.

Since the Respondent, despite having been served with the notice, had not

entered appearance, this Court by its Order dated 01.07.2019 requested Mr.

Vinay  Navare,  learned  Senior  Advocate  to  assist  this  Court  as  Amicus

Curiae.

8.         We heard  Mr.  G.  Ananda  Selvam,  learned Advocate  for  the

Appellant and the learned Amicus Curiae.   

9.         A reading of Section 143A shows (i) interim compensation must not

exceed 20% of the amount of the cheque;  (ii)  it must be paid within the

time stipulated under Sub-Section (3);  (iii)  if the accused is acquitted, the

complainant shall be directed to pay to the accused the amount of interim

compensation with interest at the bank rate; (iv) the interim compensation

payable  under  said Section can be  recovered as if  it  were a  fine under

Section  421  of  the  Code  of  Criminal  Procedure,  1973  (‘the  Code’,  for

short); and (v) if the accused were to be convicted, the amount of fine to be

imposed under Section 138 of the Act or the amount of compensation to be

awarded under Section 357 of the Code would stand reduced by the amount

paid or recovered as interim compensation.

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10. Since Sub-Section (5) of Section 143A stipulates that the interim

compensation could be recovered as if it were a fine under Section 421 of

the  Code,  said  Section  421  also  needs  to  be  considered  at  this  stage.

Section 421 appears in Chapter XXXII of the Code which Chapter deals

with ‘Execution, Suspension, Remission and Commutation of Sentences’.

By  very  context  and  the  language  of  the  provisions  contained  in  the

Chapter, they apply in cases where the guilt of an accused is determined

and he is convicted of an offence punishable with sentence and/or fine.

Part-C of the Chapter deals with ‘Levy of Fine’ and Section 421 appearing

in said Part-C is to the following effect:-

“421.   Warrant  for  levy  of  fine.- (1)  When  an offender has been sentenced to pay a fine, the Court passing the sentence may take action for the recovery of the fine in either or both of the following ways, that is to say, it may –

(a) issue  a  warrant  for  the  levy  of  the amount  by  attachment  and sale  of  any movable  property  belonging  to  the offender;

(b) issue  a  warrant  to  the  Collector  of  the district,  authorising  him  to  realise  the amount as arrears of land revenue from the movable or immovable property, or both, of the defaulter.

Provided that, if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment  in  default,  no  Court  shall  issue  such warrant unless, for special reasons to be recorded in writing, it considers it necessary so to do, or unless it

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has  made  an  order  for  the  payment  of  expenses  or compensation out of the fine under section 357.

(2) The State Government may make rules regulating the manner in which warrants under clause (a) of sub- section (1) are to be executed, and for the summary determination of any claims made by any person other than the offender in respect of any property attached in execution of such warrant.

(3) Where the Court issues a warrant to the Collector under clause (b) of sub-section (1), the Collector shall realise the amount in accordance with the law relating to  recovery  of  arrears  of  land  revenue,  as  if  such warrant were a certificate issued under such law:

Provided that  no such warrant shall  be executed by the arrest or detention in prison of the offender.”

11. According to Section 421 of the Code, fine could be recovered

either by warrant of attachment or sale of movable property belonging to

the offender or by issuance of warrant to the Collector authorising him to

realise  the  amount  as  arrears  of  land  revenue  from  the  movable  or

immovable property or both of the defaulter.

12. It is thus clear that in case an accused, against whom an order to

pay interim compensation under Section 143A of the Act is passed, fails or

is unable to pay the amount of interim compensation, the process under

Section 421 can be taken resort to which may inter alia result in coercive

action of recovery of the amount of interim compensation as if the amount

represented  the  arrears  of  land  revenue.  The  extent  and  rigor  of  the

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procedure prescribed for such recovery may vary from State to State but

invariably, such procedure may visit the person concerned with coercive

methods.     

13. For instance, by virtue of Section 183 of the Maharashtra Land

Revenue Code, 1966, in case there be a default in payment of land revenue,

the person concerned could be arrested and detained in custody for 10 days

in the office of the Collector or of a Tehsildar unless the arrears of revenue

which were due, were paid along with the penalty or interest and the cost of

arrest and of the notice of demand as also the cost of his subsistence during

detention.

14. In the present case, the Complaint was lodged in the year 2016

that is to say, the act constituting an offence had occurred by 2016 whereas,

the concerned provision viz. Section 143A of the Act was inserted in the

statute  book  with  effect  from  01.09.2018.   The  question  that  arises

therefore is whether Section 143A of the Act is retrospective in operation

and can be invoked in cases where the offences punishable under Section

138 of the Act were committed much prior to the introduction of Section

143A.  We are concerned in the present case only with the issue regarding

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applicability of said Section 143A to offences under Section 138 of the Act,

committed before the insertion of said Section 143A.

15. While considering general  principles concerning  ‘retrospectivity

of legislation’ in the context of Section 158-BE inserted in the Income Tax

Act, 1961, it was observed by this Court in Commissioner of Income Tax

(Central)-I, New Delhi  vs.  Vatika Township Private Limited1 as under:-

“28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention  appears,  a  legislation  is  presumed  not  to  be intended to have a retrospective operation. The idea behind the  rule  is  that  a  current  law  should  govern  current activities. Law passed today cannot apply to the events of the past.  If  we do something today,  we do it  keeping in view the  law of  today and in  force  and not  tomorrow’s backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as  lex prospicit non respicit: law looks forward not backward. As was observed in Phillips v. Eyre2, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time  to  deal  with  future  acts  ought  not  to  change  the character of past transactions carried on upon the faith of the then existing law.”

16. Similarly, while considering the effect of modified application of

the provisions of the Code, as a result of Section 20(4)(bb) of the Terrorist

1(2015) 1 SCC 1 2 (1870)  LR 6 QB 1

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and Disruptive Activities (Prevention) Act, 1987, whereunder the period for

filing challan or charge-sheet could get extended, this Court considered the

issue  about  the  retrospective  operation  of  the  concerned  provisions  in

Hitendra  Vishnu  Thakur  and  others  vs.   State  of  Maharashtra  and

others3 as under:-

“26. The Designated Court  has held that  the amendment would  operate  retrospectively  and  would  apply  to  the pending cases in which investigation was not complete on the date on which the Amendment Act came into force and the challan had not till then been filed in the court. From the law settled by this Court in various cases the illustrative though not exhaustive principles which emerge with regard to  the  ambit  and  scope  of  an  Amending  Act  and  its retrospective operation may be culled out as follows:

(i) A statute which affects substantive rights is presumed  to  be  prospective  in  operation unless made retrospective, either expressly or by  necessary  intendment,  whereas  a  statute which merely affects procedure, unless such a construction  is  textually  impossible,  is presumed  to  be  retrospective  in  its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.

(ii)  Law relating  to  forum and limitation  is procedural in nature, whereas law relating to right  of  action  and  right  of  appeal  even though remedial is substantive in nature.

(iii)  Every  litigant  has  a  vested  right  in substantive  law  but  no  such  right  exists  in procedural law.

3 (1994) 4 SCC 602

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(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished.

(v)  A  statute  which  not  only  changes  the procedure  but  also  creates  new  rights  and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication.”

 17. The  fourth  and the  fifth  principle as culled out  by this Court in

Hitendra Vishnu Thakur3are apposite to the present fact situation.    

18. The provisions contained in Section 143A have two dimensions.

First, the Section creates a liability in that an accused can be ordered to pay

over upto 20% of the cheque amount to the complainant.  Such an order can

be passed while the complaint is not yet adjudicated upon and the guilt of

the accused has not yet been determined.  Secondly, it makes available the

machinery for recovery, as if the interim compensation were arrears of land

revenue.  Thus, it not only creates a new disability or an obligation but also

exposes  the  accused  to  coercive  methods  of  recovery  of  such  interim

compensation  through  the  machinery  of  the  State  as  if  the  interim

compensation represented arrears of land revenue.  The coercive methods

could also, as is evident from provision like Section 183 of the Maharashtra

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Land Revenue Code,  in some cases result  in arrest  and detention of  the

accused.

19. We  must  at  this  stage,  refer  to  a  decision  of  this  Court  in

Employees’  State  Insurance  Corporation vs.  Dwarka  Nath  Bhargwa4

where provisions of Section 45B, which was inserted in Employees State

Insurance Act, 1948 with effect from 28.01.1968 was held to be procedural

and that  it  could have retrospective application.   Said Section 45B is as

under:-

“45B.  Recovery  of  contributions. -  Any  contribution payable under this Act may be recovered as an arrear of land revenue.”

The issue was whether the modality of recovery so prescribed in said

Section 45B could be invoked in respect  of  amounts which had become

payable on 27.01.1967 and 24.01.1968, i.e.  before said Section 45B was

inserted  in  the  statute  book.   While  holding  that  the  arrears  could  be

recovered as arrears of land revenue, it was observed, “It is not in dispute

and  cannot  be  disputed  that  the  contributions  in  question  had  remained

payable all throughout and were not paid by the respondent.”

 20. It must be stated that prior to the insertion of Section 143A in the

Act there was no provision on the statute book whereunder even before the

4 (1997) 7 SCC 131

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pronouncement of the guilt of an accused, or even before his conviction for

the  offence  in  question,  he  could  be  made  to  pay  or  deposit  interim

compensation.   The  imposition  and  consequential  recovery  of  fine  or

compensation either through the modality of Section 421 of the Code or

Section 357 of the code could also arise only after the person was found

guilty of an offence.  That was the status of law which was sought to be

changed by the introduction of Section 143A in the Act.  It now imposes a

liability  that  even  before  the  pronouncement  of  his  guilt  or  order  of

conviction, the accused may, with the aid of State machinery for recovery

of  the  money  as  arrears  of  land  revenue,  be  forced  to  pay  interim

compensation.   The  person  would,  therefore,  be  subjected  to  a  new

disability or obligation.  The situation is thus completely different from the

one  which  arose  for  consideration  in  Employees’  State  Insurance

Corporation4 case.

21. Though arising in somewhat different context, proviso to Section

142(b) which was inserted in the Act by Amendment Act 55 of 2002, under

which cognizance could now be taken even in respect of a complaint filed

beyond the period prescribed under Section 142(b) of the Act, was held to

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be prospective by this Court in Anil Kumar Goel v. Kishan Chand Kaura5.

It was observed:-  

“10. There is nothing in the amendment made to Section 142(b) by  Act  55  of  2002  that  the  same  was  intended  to  operate retrospectively.  In  fact  that  was  not  even  the  stand  of  the respondent. Obviously, when the complaint was filed on 28-11- 1998, the respondent could not have foreseen that in future any amendment providing for extending the period of limitation on sufficient cause being shown would be enacted.”

 22.  In our view, the applicability of Section 143A of the Act must,

therefore, be held to be prospective in nature and confined to cases where

offences were committed after the introduction of Section 143A, in order

to force an accused to pay such interim compensation.  

23.  We must, however, advert to a decision of this Court in Surinder

Singh Deswal and Ors.  vs.  Virender Gandhi6 where Section 148 of the

Act which was also introduced by the same Amendment Act 20 of 2018

from 01.09.2018 was held by this Court to be retrospective in operation.

As against Section 143A of the Act which applies at the trial stage that is

even before the pronouncement of guilt or order of conviction, Section

148 of the Act applies at the appellate stage where the accused is already

found guilty of the offence under Section 138 of the Act.  It may be stated

that there is no provision in Section 148 of the Act which is similar to

5 (2007) 13 SCC 492 6 (2019) 8 SCALE 445

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Sub-Section (5) of Section 143A of the Act.  However, as a matter of fact,

no such provision akin to sub-section (5) of Section 143A was required as

Sections  421  and  357  of  the  Code,  which  apply  post-conviction,  are

adequate to take care of such requirements.  In that sense said Section 148

depends upon the existing machinery and principles already in existence

and does not create any fresh disability of the nature similar to that created

by Section 143A of  the Act.   Therefore,  the  decision  of  this  Court  in

Surinder Singh Deswal5 stands on a different footing.

24.  In the ultimate analysis, we hold Section 143A to be prospective

in operation and that the provisions of said Section 143A can be applied or

invoked only in cases where the offence under Section 138 of the Act was

committed after the introduction of said Section 143A in the statute book.

Consequently, the orders passed by the Trial Court as well as the High

Court are required to be set aside.  The money deposited by the Appellant,

pursuant to the interim direction passed by this Court, shall be returned to

the Appellant along with interest accrued thereon within two weeks from

the date of this order.   

25. The Appeal is allowed in aforesaid terms.

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26.  In  the  end,  we  express  our  sincere  gratitude  for  the  assistance

rendered by Mr. Vinay Navare, learned Amicus Curiae.

…………………..J. [Uday Umesh Lalit]

……………..……..J. [Vineet Saran]

New Delhi;       July 30, 2019