Maninder Sharma Vs. State Tax Officer, State, Mobile Wing, Jalandhar, Punjab, CRM-M-24033-2021(O&M) Decided on 31.08.2022

Representing Advocates:

Mr. R.S. Rai, Sr. Advocate, with Ms. Eknoor Kaur Sara, Advocate, and Mr. Nimish Chib, Advocate, for the petitioner.

Ms. Ramta K Chaudhary, DAG, Punjab.

Mr. A.P.S. Deol, Sr. Advocate, with Mr. S.S. Deol, Advocate, for the complainant.

Anticipatory Bail – Application under Section 438 Cr.P.C. for grant of anticipatory bail in a case involving alleged misappropriation and cheating in a government contract – Petitioners accused of not delivering the agreed quantity of rice, leading to financial loss to the department. [Para 1, 2]

Arbitration Clause – Reliance on an arbitration clause in the contract by petitioners – Clause not applicable in cases of fraud, theft, or misappropriation, as per the agreement terms – Petitioners' failure to invoke arbitration for disputed claims within the specified period. [Para 6, 7]

Criminal Proceedings – Argument by State counsel on non-applicability of arbitration in cases of fraud, theft, or misappropriation – Petitioners' non-delivery of required rice amount prima facie constituting misappropriation. [Para 4, 8]

Arrest and Custodial Interrogation – Consideration of necessity for arrest or custodial interrogation under Sections 41 and 41A Cr.P.C. – Factors such as existing cooperation with the investigation, partial recovery of claimed amount, and attached property for remaining recovery. [Para 9, 14]

Grant of Anticipatory Bail – Application allowed based on circumstances including deposit of a significant amount post-FIR, no prior service of Section 41A notice, and attachment of land for recovery – Conditions for bail and continued cooperation with the investigation stipulated. [Para 16]

Premature Release – Denial of Premature Release – Petitioner’s plea for premature release rejected – Convicted under Sections 302, 323, 34 of IPC and Arms Act – Serving life imprisonment since 2001 – Contention based on Punjab Government policy dated 08.07.1991 regarding sentence remissions. [Paras 1-3]

Policy Interpretation – Punjab Government’s 1991 policy for life convicts – Minimum actual imprisonment of 10 years and total of 14 years including remission for certain categories – Petitioner's claim of fulfilling these criteria for premature release. [Paras 7-9]

Actual Sentence Calculation – Discrepancy between petitioner’s claim and state’s submission on actual sentence served – State’s formula excludes parole period from actual sentence – Reference to Supreme Court’s decision in Avtar Singh Vs. State of Haryana regarding non-inclusion of parole in actual sentence calculation. [Paras 10-12, 14-15]

Legal Precedent – Reliance on Supreme Court’s judgment in Avtar Singh case – Upholding legislative provision excluding parole period from actual sentence calculation – Impact on the petitioner’s claim for premature release. [Paras 13-16]

Decision – Petition Dismissed – Petitioner not meeting the actual sentence requirement as per 1991 policy after excluding parole period – Petitioner ineligible for premature release. [Para 18]

Specific Relief Act – Application under Section 28 to rescind the agreement to sell – Dismissal of application by the Court of Civil Judge (Junior Division) – Suit for specific performance filed by respondent – Ex-parte decree in favor of respondent – Petitioner’s contention that respondent failed to deposit the balance sale consideration within the stipulated period of 3 months – Allegation of illegal permission granted by the Court to deposit the balance sale consideration – Petitioner’s application under Section 28 filed after more than 2 years of the passing of the ex-parte decree – Delay in depositing balance sale consideration condoned by the trial Court – Petitioner’s failure to establish sufficient grounds for rescission of the agreement to sell – Revision petition dismissed for lack of merit. [Para 1-9]

Quashing of Proceedings – Section 482 Cr.P.C. – Petition for quashing complaint under Section 138 of the Negotiable Instruments Act 1881 – Complaint and subsequent summoning order challenged – Petitioner not a signatory to the disputed cheque, issued from a joint account with her husband. [Para 1, 2, 4]

Principal of Liability – Cheque Dishonour – Liability under Section 138 of the Negotiable Instruments Act 1881 – Emphasis on prosecution of the drawer of the cheque only – Reference to the Supreme Court rulings in Aparna A Shah Vs. M/s Sheth Developers P. Ltd. and Alka Khandu Avhad Vs. Amar Syamprasad Mishra for guidance on the liability of the signatory. [Para 3, 7, 9, 10]

Judicial Interpretation – Drawer’s Liability – Analysis of Section 138 of the Negotiable Instruments Act and Supreme Court judgments – Reaffirmation that only the drawer of the cheque can be prosecuted under Section 138 – Joint account holders not automatically culpable unless they are signatories to the cheque. [Para 8, 11, 27, 28]

Decision – Quashing of Proceedings Against Petitioner – Petition accepted – Proceedings against the petitioner quashed based on her non-signatory status to the cheque – Proceedings may continue against her husband, the signatory of the cheque. [Para 11, 12]

Civil Suit – Rejection of plaint – Jurisdiction of the trial court to reject the plaint under Order 7 Rule 11 CPC – Interpretation of the nature of relief sought by the petitioners – Distinction between seeking cancellation and seeking declaration of invalidity – Applicability of ad valorem court fees – Incorrect interpretation of the petitioner’s claim – Impugned order set aside. [Para 1-13]

Disposition of Revision Petition – Revision petition allowed, and the impugned order is set aside – Directions for the trial court to proceed with the suit expeditiously – No expression of opinion on the merits of the case. [Para 14-15]

Criminal Application – Compounding of Offence under Section 138 of the Negotiable Instruments Act – Application for compounding rejected by Magistrate – Application made by accused directors of a company for dishonour of a cheque amounting to Rs. 15 lakhs – Appeal against the non-compounding of the offence. [Para 2, 3, 4, 6]

Insolvency Proceedings – Impact on Criminal Proceedings – Accused company admitted to insolvency and Interim Resolution Professional appointed – Claim of non-applicant filed before IRP – Relevance of insolvency proceedings to criminal liability under Section 138 of the NI Act. [Para 5, 30, 31]

Compounding of Offences – Guidelines and Judicial Interpretation – Consideration of Supreme Court guidelines in Damodar S. Prabhu vs. Sayed Babalal and Meters & Instruments Pvt. Ltd. vs. Kanchan Mehta – Ability of courts to compound offences under Section 138 of the NI Act in absence of complainant’s consent, subject to adequate compensation to complainant. [Para 7, 8, 10, 11, 12, 13, 19, 20, 21, 22, 23, 24, 28, 29]

Judicial Discretion in Compounding – Piecemeal Compromise and Compounding Permitted – Court’s power under Section 482 of CrPC to compound offences even without complainant’s consent in appropriate cases, ensuring adequate compensation to complainant. [Para 32, 35, 36]

Decision – Magistrate's order rejecting compounding application set aside – Offence against applicants compounded subject to deposit of cheque amount with interest and litigation costs – Applicants discharged upon deposit of amount – No cost payable to District Legal Services Authority. [Para 37]

Temporary Stay on Order – Post-judgment request for stay of order’s operation – Granted for six weeks to allow respondent no.2 to appeal to the Supreme Court. [Post-judgment note]

Writ Petition – Joining of Landlord as a Party in Tenant's Suit Against Corporation for Demolition Action – Examination of the necessity and propriety of landlord's inclusion in tenant's suit for protection against demolition. [Para 1, 28]

Civil Procedure – Impleadment of Parties under Order I Rule 10(2) of CPC – Power of court to join a party as necessary for effective adjudication of the suit – Analysis of the judicial discretion involved in the inclusion of landlords in tenant's litigation against municipal demolition. [Para 6, 7, 28]

Supreme Court Precedents – Interpretation of Aliji Momonji & Co. v. Lalji Mavji and Mohamed Hussain Gulam Ali Shariffi v. Municipal Corporation of Greater Bombay – Assessment of the Supreme Court's stance on the participation of landlords in suits initiated by tenants or licensees against municipal corporations. [Para 16, 17, 23]

Judicial Discretion – Consistent Exercise in Adding Landlord as Proper Party in Tenant's Suits – Recognition of landlord's direct interest in property subject to demolition notice and the rationale for their inclusion as proper parties in relevant lawsuits. [Para 28, 30]

Legal Principle – Landlord as a Proper Party in Tenant’s Suit Against Demolition – Affirmation that landlords can be joined as proper parties in tenant-initiated suits against municipal demolition actions, based on their direct interest in the property and potential impact on their rights. [Para 32]

Decision – Resolution of Divergent Views Amongst Single Judges of High Court – Clarification of legal position regarding the inclusion of landlords in tenant's suits against municipal corporations, aligning with Supreme Court precedents. [Para 31, 33]

Industrial Disputes Act – Strike by workers – Entitlement to wages during the strike period – Tribunal’s award granting 50% wages during an illegal strike challenged – Principles of law regarding payment of wages during work stoppages due to strikes discussed. [Para 8]

Industrial Tribunal’s Award – Failure to consider relevant factors – Disregard of financial repercussions on management – Tribunal’s award set aside for not taking into account the impact of modernization and the need for higher production. [Para 9]

Certiorari – Writ of Certiorari issued – Industrial Tribunal’s award quashed – Writ Petition allowed. [Para 10-11]