Dilip S. Dahanukar vs Kotak Mahindra Co. Ltd. & Anr

Accused No.1-M/s. Goodvalue Marketing Co. Ltd., a company registered and incorporated under the Companies Act, 1956 and Accused No.2-Appellant herein were convicted for commission of an offence involving Section 138 of the Act by a judgment of conviction and sentence dated 23.2.2006 holding :

The accused No.2 is also directed to pay compensation to the complainant, quantified (sic) at Rs.15,00,000/- (Rupees Fifteen lakhs only), under Section 357(3) of Cr.P.C. The accused No.2 is entitled to pay the amount of compensation in two equal monthly instalments of Rs.7,50,000/- each. The first instalment of Rs.7,50,000/- shall be paid on or before 23-03-2006 and the second instalment of Rs.7,50,000/- shall be paid on or before 24-04-2006 in default of payment of the amount of compensation the accused No.2 shall suffer further S.I. for 2 month."

An appeal was preferred thereagainst. The Appellate Court by an order dated 27.4.2006 while admitting the appeal, directed them to deposit a sum of Rs. 5 lakhs each within four weeks from the said date. A writ petition was filed by the appellants questioning the legality of the said order which by reason of the impugned judgment has been dismissed.

11. Broadly speaking, therefore, an appeal is a proceeding taken to rectify an erroneous decision of a court by submitting the question to a higher court, and in view of the express language used in sub-section (1) of Section 34 of POTA the appeal would lie both on facts and on law. Therefore even an order granting bail can be examined on merits by the High Court without any kind of fetters on its powers and it can come to an independent conclusion whether the accused deserves to be released on bail on the merits of the case. The considerations which are generally relevant in the matter of cancellation of bail under sub-section (2) of Section 439 of the Code will not come in the way of the High Court in setting aside an order of the Special Court granting bail. It is, therefore, evident that the provisions of POTA are in clear contradistinction with that of the Code of Criminal Procedure where no appeal is provided against an order granting bail. The appeal can lie only against an order of the Special Court and unless there is an order of the Special Court refusing bail, the accused will have no right to file an appeal before the High Court praying for grant of bail to them.

Doctrine of Purposive Interpretation in a situation of this nature, in our opinion, shall be applied.

We, generally, agree with the observations made by the learned Judge, the same shall, however, be subject to any observations made hereinbefore.

It is also of some significance to note that whereas under Section 357(1) of the Code of Criminal Procedure a fine of Rs. 5000/- can be imposed; fine in terms of Section 357 (2) thereof can be twice the amount of cheque whereas there is no upper limit for award of a compensation. But the same would be subject to other provisions of the Code of Criminal Procedure which mandates that the amount of fine imposed on an accused cannot be more than Rs. 5000/-. The very fact that the Parliament did not think it fit to put a ceiling limit in regard to the amount of compensation leviable upon an accused, the discretionary jurisdiction thereto must be exercised judiciously. Ordinarily, an accused shall not be taken in custody during trial. Thus, while exercising the appellate power, ordinarily, a person should not suffer imprisonment only because the conditions imposed for suspending the sentence are harsh.

We are of the opinion that having regard to the aforementioned factors the amount of compensation not only must be reasonable one, the conditions for suspending the sentence should also be reasonable. It is only with that intent in view, the doctrine of purposive construction should be applied.

We, therefore, are of the opinion :

In the facts and circumstances of the case, we, however, think it reasonable to direct the appellant to deposit a sum of Rs. 1 lakh within a period of four weeks, from date. The Respondent - Company, however, would be entitled to withdraw the said amount. The deposit of such amount by the appellant shall be without prejudice to the rights and contentions of the parties in the appeal.

These appeals are allowed to the aforementioned extent. In the facts and circumstances of this case, there shall be no order as to costs.