Supreme Court Upholds Cancelation of  Bail in Financial Non-Compliance In Offence U/S 138 N.I. Act

In a significant ruling, the Supreme Court of India upheld the High Court of Judicature at Bombay's decision to cancel the suspension of sentence and bail of Satish P. Bhatt and Vishwanath Ramakrishna Nayak, former directors of M/s Astral Glass Private Limited. The apex court's decision in the case of "2024 INSC 16" came as a firm reinforcement of judicial directives and financial responsibilities in legal proceedings.

Justice Vikram Nath, presiding over the bench with Justice Rajesh Bindal, underscored the gravity of the situation. "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," Justice Nath remarked, highlighting the defendants' nonchalant attitude towards their financial responsibilities and court orders.

The case stemmed from the failure of Bhatt and Nayak to fulfil their financial obligations after being convicted under Section 138 of the Negotiable Instruments Act, 1881. The High Court had earlier suspended their sentence based on an undertaking of settlement, which they subsequently failed to comply with. The Supreme Court noted this non-compliance as a violation of the trust and leniency afforded by the legal system.

In a detailed observation, the court pointed out the intricacies of the settlement agreement and the division of payment liabilities among the directors. The judgment emphasized the importance of adhering to judicial orders and financial settlements, with the court stating, "The settlement between the two directors is inter se these two only and the complainant is not bound by the same."

Highlighting the long-drawn litigation and the subsequent delay in justice, the Supreme Court observed, "He [the complainant] has been litigating since 2007, almost 16 years by now." This aspect brought to light the prolonged struggle for justice faced by the complainant.

The apex court dismissed the appeal with additional costs, directing the appellants to surrender within four weeks to undergo their sentence and instructing the High Court to ensure full compliance with the undertaking. The decision sets a precedent for the importance of compliance with financial settlements and court orders, sending a clear message about the consequences of non-adherence to legal obligations.

Date of Decision: January 03, 2024

SATISH P. BHATT VS THE STATE OF MAHARASHTRA & ANR