Full Judgment Text
2024 INSC 16
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. OF 2024
(@ SPECIAL LEAVE PETITION (CRL.) NO.7433 OF 2019)
SATISH P. BHATT …APPELLANT
VERSUS
THE STATE OF MAHARASHTRA
& ANR …RESPONDENTS
J U D G M E N T
VIKRAM NATH, J.
1. The facts of this case bring to light a situation
marked by a persistent disregard for judicial
directives and a lackadaisical approach to legal
and financial obligations. The behaviour of the
Petitioner stands as a testament to how an
Signature Not Verified
Digitally signed by
Neetu Khajuria
Date: 2024.01.04
11:01:37 IST
Reason:
Civil Appeal No.1598 of 2023 Page 1 of 17
individual’s nonchalant attitude towards
financial responsibilities and court orders can
undermine the essence of judicial efficacy.
2. The High Court took a firm stance against the
appellant’s continued failure to fulfil his
financial obligations, culminating in the
cancellation of his bail and suspension of
sentence. This decision, reflecting the
frustration of the legal system with repeated
non-compliance, sets the stage for our
deliberation.
3. Leave granted.
4. The present appeal assails the correctness of
the judgment and order dated 23.07.2019
passed by the High Court of Judicature at
Bombay cancelling the order of suspension of
sentence and bail granted to the appellant as
Civil Appeal No.1598 of 2023 Page 2 of 17
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 paragraph 3 of the order dated
20.03.2019 granting extension of time to
comply.
5. 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
1
Instruments Act, 1881 vide judgment and
1
NI Act
Civil Appeal No.1598 of 2023 Page 3 of 17
order of the Trial Court dated 26.08.2011 in
three separate cases and were awarded
sentence of ten months with total liability of
Rs.5 crores cumulatively in all the three cases.
The operative portion of the conviction and
sentence as recorded by the Trial Court in one
of the cases is reproduced hereunder:
“I) Accused No.2 Mr.Satish Padamanath
Bhat, aged 54 years and accused no.3
Mr.Vishwanath Ramakrsishna Nayak,
aged 50 years both r/o.Borivali (E),
Mumbai-400 066 are hereby convicted
vide provisions under Section 255(2) of
Cr.P.C. for offence under Section 138 of
Negotiable Instruments Act and they are
sentenced to suffer Simple Imprisonment
for 10 (ten) months each.
II) Both accused shall also to pay in total
Rs.1,10,00,000/- (Rupees one crore and
ten lakhs only) as compensation to
Complainant vide provisions under
Civil Appeal No.1598 of 2023 Page 4 of 17
Section 357(3) of Cr.P.C. within 3 months.
In default to suffer further Simple
imprisonment for 6 (six) months each.
III) Cash security of Rs.3000/- of accused
no.2 shall stand continued till appeal
period is over and P.R. bond of accused
no.3 stands cancelled….”
6. Three appeals jointly filed by the appellant, the
intervenor as also AGPL were dismissed by the
Sessions Court vide common judgment and
order dated 30.01.2014. The Sessions Court
granted a month’s time to surrender in order to
undergo the sentence.
7. 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/- would be
Civil Appeal No.1598 of 2023 Page 5 of 17
paid to the complainant-respondent no.2. 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
be paid in installments. The payment schedule
was also laid down in paragraphs 6 and 7
whereas paragraph 5 mentioned amount of
settlement. Paragraph 8 of the settlement
mentioned that the said amount would be paid
equally by the appellant and the intervenor.
However, 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.
8. Based on the undertaking, the learned Single
Judge of the High Court passed an order on the
same day i.e. 03.07.2018 and granted interim
protection by suspending the sentence of
Civil Appeal No.1598 of 2023 Page 6 of 17
imprisonment and they were directed to be
released on bail on furnishing a personal bond
in the sum of Rs.25,000/- with one or more
sureties in the like amount. The Court further
directed that no further extension shall be
granted for payment of the settled amount and
th
fixed 8 October, 2018 for reporting
compliance.
9. As per the undertaking, Rs.2 crores was to be
th
paid on or before 30 September, 2018, in
addition to Rs.25 lakhs which was paid on the
date of passing of the order. Remaining amount
of Rs. 1 crore 65 lakhs was to be paid on or
th
before 15 March, 2019. Thereafter the matter
th
was taken up by the High Court on 20 March,
2019 by which time they had paid only Rs.82
lakhs. Further time was sought to pay the
th
balance amount till 20 April, 2019. The
Civil Appeal No.1598 of 2023 Page 7 of 17
counsel for the complainant pointed out that
the amount due was Rs.1,69,10,000/-. The
High Court on 20.03.2019 extended the time for
th
payment of Rs.1,69,10,000/- till 20 April,
2019 and further provided that if the said
amount was not paid then the order granting
bail and also suspending the sentence shall
stand cancelled forthwith without further
reference to Court.
10. Thereafter it appears that the present appellant
Satish P.Bhatt filed a criminal application in the
th
pending revision on 16 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
rd
order dated 3 July, 2018 and, therefore, he
may be absolved of the charges and acquitted.
On the said application, notice was issued to the
th th
complainant on 19 June, 2019 fixing 10 July,
Civil Appeal No.1598 of 2023 Page 8 of 17
th
2019. On that date, it was adjourned to 16
th
July, 2019. Thereafter on 16 July it was
rd rd
adjourned to 23 July, 2019. On 23 July,
2019, the High Court passed the impugned
order cancelling the suspension of sentence and
rd
bail granted vide order dated 3 July, 2018 for
non-compliance of the undertaking and in view
th
of the order dated 20 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.
11. Learned counsel for the appellant has sought to
argue that out of Rs.3,90,00,000/- his half
share would amount to Rs.1,95,00,000/- which
has duly been paid and, therefore, the order of
the High Court cancelling his bail and
Civil Appeal No.1598 of 2023 Page 9 of 17
suspension of sentence was not warranted and
deserves to be set aside.
12. On the other hand, learned counsel for the
complainant has submitted that as of date there
is still an outstanding amount of
Rs.83,10,000/- and has, therefore, claimed that
the complainant would be entitled to receive
Rs.83,10,000/- along with compound interest @
th
12% p.a. from 15 March, 2019 till actual
payment is made along with costs against the
appellant as also the intervenor.
13. The intervenor has also filed his response and
according to him the partnership between the
appellant and the intervenor was in the ratio of
60:40 and that they had actually agreed to pay
the settled amount of Rs.4,63,50,000/- in that
proportion as per their shares in the firm. It is
also his case that the amount of Rs.73,50,000
Civil Appeal No.1598 of 2023 Page 10 of 17
had been paid by him alone prior to 03.07.2018
during the time when the appeal was pending
before the Sessions Court and, therefore, he was
entitled to adjustment of the said amount.
Further his case is that out of the settled
amount to be paid to the complainant i.e.
Rs.4,63,50,000/- his share being 40%, the
amount liable to be paid by him would be
Rs.1,85,00,000/-. As he had paid Rs.73,50,000
earlier he was liable to pay a further amount of
Rs.1,11,90,000/-. According to him, he has
paid the said amount of Rs.1,11,90,000/- after
the order dated 03.07.2018. The outstanding
amount of Rs.83,10,000/- falls in the share of
the appellant whose total liability being 60% of
the settled amount would come to
Rs.2,78,10,000/- and he having paid only
Civil Appeal No.1598 of 2023 Page 11 of 17
Rs.1,95,00,000/- there is a shortfall of
Rs.83,10,000/- which the appellant should pay.
14. It is further submitted that the intervenor is
being unnecessarily suffering because of
remaining amount not being paid by the
appellant. It is also the case of the intervenor
that as per the e-mails exchanged between them
which have been duly placed on record prior to
the undertaking dated 03.07.2018, it was
decided and agreed between them that the
amount would be paid as per their respective
shares i.e. in the ratio of 60:40. The said
exchange of e-mails and the draft settlement
was also shared with the lawyer and the same
was duly accepted. The intervenor was not
dealing with the lawyer directly and it was the
appellant who was dealing with the lawyer. The
appellant has mischievously and fraudulently
Civil Appeal No.1598 of 2023 Page 12 of 17
altered the words “as per the respective shares”
by substituting it with “equally”. The intervenor
was hurriedly made to sign the undertaking on
the date it was being filed i.e. 03.07.2018 and
he trusted the appellant and the lawyer who was
appearing for both of them. It is further stated
that the intervenor has also filed before the High
Court by way of a modification application to
deal with this aspect of the matter, which
application is still pending.
15. We have perused the undertaking dated
03.07.2018 as also the order dated 03.07.2018
and also the subsequent orders passed by the
High Court. It is apparent from the same that
the complainant was entitled to receive a total
amount of Rs.4,63,50,000/-. The undertaking
as also the order dated 03.07.2018 clearly
mention that both of them will pay the amount
Civil Appeal No.1598 of 2023 Page 13 of 17
equally as agreed by and between them and it
further contains a stipulation that in default of
the payment by either of them as per their
agreed share in the settlement, they shall be
held liable and prosecuted as per law.
16. The settlement between the two directors i.e. the
appellant and the intervenor is inter se these
two only and the complainant is not bound by
the same. Complainant’s agreement or consent
was only to the extent of accepting
Rs.4,63,50,000/- only. He was not a signatory
to the agreement which was signed by the two
parties. Admittedly, both the appellant and the
intervenor were Chairman and Vice-Chairman
of the company AGPL and, therefore, were
convicted by the Trial Court and their conviction
was affirmed by the Appellate Court.
Civil Appeal No.1598 of 2023 Page 14 of 17
17. We are not inclined to go into 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. We
find no infirmity in the impugned order.
18. 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
Civil Appeal No.1598 of 2023 Page 15 of 17
receive a much lesser amount than he was
entitled to under the order of the Trial Court. He
has been litigating since 2007 almost 16 years
by now.
19. 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 No. 2
(Complainant) within four weeks from today. It
is clarified that this amount of costs will not be
adjusted against the compensation awarded to
the respondent No.2 but will be in addition to it.
20. It is further directed that the appellant and the
intervenor to surrender within a period of four
weeks from today to undergo the sentence. If
they do not surrender, the High Court to take
appropriate coercive measures to get the
sentence executed. The revisions before the
Civil Appeal No.1598 of 2023 Page 16 of 17
High Court are still pending. The High Court will
proceed to decide the revisions as also pending
applications if any and ensure that the
undertaking is fully complied with and the
complainant is suitably compensated for the
further harassment caused.
21. Pending application(s), if any, stand disposed of.
………………………………………….J.
(Vikram Nath)
………………………………………….J.
(Rajesh Bindal)
New Delhi,
January 03, 2024
Civil Appeal No.1598 of 2023 Page 17 of 17