IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY, THE TWENTYTHIRD DAY OF DECEMBER TWO THOUSAND AND ELEVEN HON’BLE SRI JUSTICE G. BHAVANI PRASAD Criminal Appeal Nos.689, 690, 711, 713, 720 and 842 of 2008 Criminal Appeal No.689 of 2008 Between: Doulat Ram Tulasidas .. Appellant AND The State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., and 2 others .. Respondents Criminal Appeal No.690 of 2008 Between: Ajay Doulat Ram .. Appellant AND The State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., and 3 others .. Respondents Criminal Appeal No.711 of 2008 Between: Doulat Ram Tulasidas .. Appellant AND The State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., and 2 others .. Respondents Criminal Appeal No.713 of 2008 Between: Ajay Doulat Ram .. Appellant AND The State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., and 3 others .. Respondents Criminal Appeal No.720 of 2008 Between: Doulat Ram Tulasidas .. Appellant AND The State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., and 3 others .. Respondents Criminal Appeal No.842 of 2008 Between: Doulat Ram Tulasidas .. Appellant AND The State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., and 3 others .. Respondents COMMON JUDGMENT: Criminal Appeal No.689 of 2008 is directed against the judgment in Criminal Appeal No.90 of 2007 dated 25-01-2008 by which both the accused therein were acquitted of the charge under Section 138 of the Negotiable Instruments Act, 1881, reversing the conviction by the trial Court. The appellant herein filed the complaint before the trial Court contending that a loan of Rs.5,00,000/- was advanced to the 1st accused-Firm represented by the 2nd accused and his brother, who executed a demand promissory note in his favour. A cheque No.313731 was issued on 10-04-2000 by the 2nd accused on behalf of the 1st accused for Rs.5,00,000/- in favour of the appellant herein towards the debt and the same was returned due to insufficiency of funds when presented to the Bank. Statutory notice did not make the accused pay the amount and hence, the complaint. Before the trial Court PW.1 was examined and Exs.P.1 to P.12 were marked during trial after the accused entered appearance, received copies of documents and denied the offence when they were examined under Section 251 of the Code of Criminal Procedure. The accused denied the incriminating circumstances appearing in the evidence against them when they were examined under Section 313 of the Code of Criminal Procedure and no defence evidence was adduced on their behalf. The trial Court in its judgment dated 30-03-2007 concluded that the accused cannot escape from the criminal liability notwithstanding the full satisfaction of the decree in the suit for recovery of loan in the execution petition and the legally enforceable debt under Ex.P.12 and the dishonoured cheque- Ex.P.1 were considered to be making the accused liabile for punishment. After hearing the accused on the question of sentence, the trial Court imposed Rigorous Imprisonment for a period of one year and a fine of Rs.5,000/- with a default sentence of three months in case of non-payment of fine on the accused. In appeal, by the impugned judgment the Appellate Court concluded that in the light of the principles laid down in Vinay Devanna Nayak v. Ryot Seva Sahakari Bank Limited (2007 (13) Scale SC 705), Kishan Bodhankar v. M.A. Hamed and another (1997 (1) ALD (Crl.) 787 and Hardip Singh v. Gurnam Singh Randhawa (1996 BC 200 (P & H), the discharge of the debt due to the complainant in the execution proceedings showed that the matter was settled between the parties making the accused entitled to an acquittal. Distinguishing the precedents relied on by the complainant on the question, the Appellate Court accordingly acquitted the accused. The fine amount paid was also directed to be refunded. In appeal, the complainant contended that receiving of the amount in execution of a decree by the Civil Court is irrelevant for deciding the guilt of the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”). The principle laid down in 2001 (1) CRL (CRLJ) 104 SC was violated. Principles applicable to cases where the offence was compounded could not have been extended to cases where a debt was subsisting when the complaint was filed and when there was no compounding. Hence, the complainant desired that the acquittal be reversed and the conviction be restored. Criminal Appeal No.690 of 2008 is against an identical acquittal in Criminal Appeal No.86 of 2007, which also involved a loan of Rs.10,00,000/- and a bounced cheque No.792117, dated 30-06-2000 for Rs.10,00,000/-. Criminal Appeal No.711 of 2008 is also directed against an identical acquittal in Criminal Appeal No.91 of 2007, which involved a loan of Rs.5,00,000/- and a bounced cheque for the same sum dated 10-04-2000 in Cheque No.313732. Criminal Appeal No.713 of 2008 is also against an identical acquittal in Criminal Appeal No.87 of 2007 wherein the loan involved was to a tune of Rs.5,00,000/- and the cheque dishonoured was for the same amount in Cheque No.792119, dated 30-06-2000. Criminal Appeal No.720 of 2008 is against an identical acquittal in Criminal Appeal No.88 of 2007, the loan involved therein being Rs.10,00,000/- and the cheque dishonoured therein in Cheque No.792118, dated 30-06-2000 being for Rs.10,00,000/-. Criminal Appeal No.842 of 2008 is an identical appeal against an identical acquittal in Criminal Appeal No.89 of 2007 involving a loan of Rs.10,00,000/- and a dishonoured cheque for an equal sum dated 10-04-2000 in Cheque No.313733. All the six cases were tried by the Chief Metropolitan Magistrate, Vijayawada, on complaints by the appellant in all the cases though the accused were different. The Chief Metropolitan Magistrate, Vijayawada, in identical judgments in all the six cases on 30-06-2007 handed over Rigorous Imprisonment for one year and a fine of Rs.5,000/- each to all the accused in all the cases, which convictions and sentences were reversed by the Appellate Court in identical judgments dated 25-01-2008 further directing refund of the fines paid. The facts before the VIII Additional District and Sessions Judge, (Fast Track Court), Vijayawada, which is the Appellate Court in the remaining five appeals also, are identical as in Criminal Appeal No.689 of 2008 and the reasons for the decisions of the Appellate Court are also same requiring no repetition herein. Sri R. Prasad, learned counsel representing the learned counsel for the appellant in all the cases and Sri Ambadipudi Satyanarayana, learned counsel representing Smt. Ch. Lakshmi Chaya, learned counsel for the respondents-accused in all the cases are heard. The point for consideration is whether the acquittal of the accused of an offence punishable under Section 138 of the Act is liable to be reversed in these appeals? As the questions of fact and law which arise in all the six appeals are the same and as the complainant is the same in all the six appeals though the accused are different, all the appeals are being disposed of by this common judgment at the request and with the consent of the learned counsel for both parties. The facts in all the cases as proved by the evidence on record before the trial Court and as admitted by the parties are not in dispute. The existence of legally enforceable debts/liabilities against the different accused is admitted. The issuance of the subject cheques towards discharge of such debts/liabilities and their dishonour due to insufficiency of funds are also admitted. The filing of suits before a Civil Court for recovery of the loans, the decree of those suits, the execution of the said decrees and full satisfaction of the said decrees on payment of all the amounts due under all the decrees by the respective judgment debtors are also admitted. The trial Court felt that even the full satisfaction of the decrees concerning the same liabilities/debts will not erase the criminal liability of the accused for the offence under Section 138 of the Act on the admitted facts. The Appellate Court differed with that view and deduced from the precedents cited before it that the accused deserved an acquittal in view of the admitted discharge of the debts, though subsequently. In Vinay Devanna Nayak v. Ryot Seva Sahakari Bank Ltd[1] relied on by the Appellate Court, the parties had a final settlement between themselves outside the Court when the matter was coming up for admission-hearing before the Supreme Court and the Apex Court observed that in Cranex Ltd, & another v. Nagarjuna Finance Ltd., and another (2000 AIR SCW 3483) the Supreme Court directed consideration of the settlement between the parties during the pendency of an appeal before the Court of Session and to take appropriate action in accordance with law. Similarly, in O.P. Dholkia v. State of Haryana & another {(2000) 1 SCC 762}, the conviction was confirmed up to revision after which a compromise was arrived at between the parties and entire amount was paid to the creditor. The nature of the offence and the compromise were taken into account by the Supreme Court to grant permission in the peculiar facts and circumstances of the case to acquit the accused. The Supreme Court also referred to its earlier decision in Nambiram Veetil Pocker v. State of Kerala another {(2003) 9 SCC 214} and observed that it is thus clear that even though technically the provisions of Section 320 of the Code of Criminal Procedure did not apply to offences not covered by the Indian Penal Code, the fact as to compromise between the parties and payment of dues under Section 138 of the Act was considered a relevant factor by the Court. After referring to the above and three other precedents, the Apex Court took into account the purpose for which the provision was designed and observed that it was intended to prevent dishonesty on the part of the drawers of negotiable instruments in issuing cheques without sufficient funds. The promotion of efficacy of banking operations and ensuring credibility in transacting business through cheques was thus noted to be to curb cases of issuing cheques indiscriminately and therefore, in such matters normally compounding of offences should not be denied. It was ultimately observed that as the matter was compromised and the amount was paid towards full and final settlement, the accused was entitled to acquittal. Though the element of compromise is lacking in the present case, it is evident from the various observations of the Apex Court that beyond the provisions of Section 320 of the Code of Criminal Procedure, 1973, the Court can consider appropriate action in such cases keeping in view the object and purpose of enacting Section 138 of the Negotiable Instruments Act, 1881. Even in the later decision of the Apex Court in Damodar S. Prabhu v. Sayed Babalal H.[2], a Three Judge Bench of the Apex Court again noted the object of bringing Section 138 into the statute to be to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. T h e Apex Court referred to the provisions and precedents including Vinay Devanna Nayak v. Ryot Seva Sahakari Bank Ltd (1 supra) and referred to a later decision in K.M. Ibrahim v. K.P. Mohammed (2010) 1 SCC 798) wherein the compounding of the offences at later stages of litigation in cheque bouncing cases has been held to be permissible. The Apex Court concluded that it is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect and while laying down the guidelines to be followed to avoid undue delay in compounding the offence, the Apex Court still observed that the scale of costs has been suggested in the interest of uniformity and still left the matter to the discretion of the competent court to reduce the costs with regard to the specific facts and circumstances of a case for reasons to be recorded. The guidelines thus framed in exercise of power of the Supreme Court to do complete justice under Article 142 of the Constitution of India, still provided for a leverage to the competent court to consider variance in imposition of costs even for the most belated compounding of an offence under Section 138 of the Negotiable Instruments Act. In effect and substance, the principle that the compensatory aspect of the remedy should be given priority over the punitive aspect was directed to govern the manner in which such cases have to be dealt with. The accused herein have fully satisfied the respective decrees even before the trial concluded before the trial Court and it is only due to taking a strictly technical view that full satisfaction of the decrees will not erase the criminal liability that the trial Court proceeded to convict the accused in various cases. The accused undergoing the ordeal of criminal prosecution from 2007, had the dagger of conviction and sentence of imprisonment and fine hanging over their heads till the disposal of the criminal appeals on 25-01-2008 and had been again facing the prospects of a reversal of acquittal during the pendency of these appeals up-to-date. The physical and mental suffering the accused were thus undergoing since the institution of the complaints up-to-date can be considered to have more than adequately answered the need for any punitive considerations in respect of their default in answering what primarily is a civil liability. Interference with a judgment of acquittal is admittedly exceptional requiring very strong grounds and if the Appellate Court had taken a particular view of its power to exercise its discretion in a particular way to acquit the accused on the ground of discharge of the liabilities based on the binding observations of the Apex Court in different precedents, the mere possibility of a second view being taken on the inferences to be drawn from the precedents may not be a ground for reversing an acquittal. Under the circumstances, I find no reasonable grounds to interfere with the judgments of acquittal and the Criminal Appeals have to accordingly fail. In the result, all the Criminal Appeals are dismissed. _____________________ G. BHAVANI PRASAD, J Date: 23-12-2011 Ksn [1] 2007 AIR SCW 7844 [2] (2010) 5 Supreme Court Cases 663