Ravindran Vs. P. Srichand - Court Judgment

Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. orderk. natarajan, j.1. this criminal revision petition has been filed against the order of viith additional sessions judge, chennai dated 11-9-1998 modifying the conviction and sentence passed by the xith metropolitan magistrate, chennai under section 138 of the negotiable instruments act.2. the brief facts are :-on the complaint of the respondent, the revision petitioner/accused was tried for an offence under section 138 of the negotiable instruments act by the xith metropolitan magistrate, saidapet, chennai on the ground that the accused issued a cheque for rs. 1,25,000/- which got bounced from the bank. the learned trial magistrate found the accused guilty and imposed a sentence of three months simple imprisonment and also a fine of rs. 1,25,000/-, in default to undergo simple imprisonment for three months. 3. on appeal, the learned viith additional sessions judge, chennai set aside the order of imprisonment for three months, but confirmed the sentence of the fine of rs. 1,25,000/-.4. the learned counsel for the revision petitioner urged a legal submission relying on the decision of the supreme court of india in k. bhaskaran v. sankaran vaidhyan balan reported in : 1999crilj4606 . the supreme court had observed therein that even though the negotiable instruments act has provided that fine amounting to twice the cheque can be imposed by the magistrate, the limit of fine that can be imposed by a first class magistrate as provided under section 29(2) of the code of criminal procedure also should be taken into account and had held that a first class magistrate cannot impose a fine more than rs. 5000/-. it is useful to refer to paragraphs 28 to 31 of the ruling of the supreme court, which is extracted below :-28. in this context a reference to section 29(2) of the code is necessary as it contains a limitation for the magistrate of first class in the matter of imposing fine as a sentence or as a part of the sentence. section 29(2) reads thus:-the court of a magistrate, of the firs class may pass a sentence of imprisonment for a term not exceeding three years or of fine not exceeding five thousand rupees or of both. 29. the trial in this case was held before a judicial magistrate of first class who could not have imposed a fine exceeding rs. 5000/- besides imprisonment. the high court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit.30. it is true, if a judicial magistrate of first class were to order compensation to be paid to the complainant from out of the fine released the complainant will be the loser when the cheque amount exceeded the said limit. in such a case a complainant would get only the maximum amount of rupees five thousand.31. however, the magistrate in such cases can alleviate the grievance of the complainant by making resort to section 357(3) of the code. it is well to remember that this court has emphasised the need for making liberal use of that provision. hari krishna and state of haryana v. sukhbir singh : 1989crilj116 no limit is mentioned in the sub-section and, therefore, a magistrate can award any sum as compensation. of course while fixing the quantum of such compensation the magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. thus even if the trial was before a court of magistrate of first class in respect of a cheque which covers an amount exceeding rs. 5000/- the court has power to award compensation to be paid to the complainant.the said ruling of the supreme court has been pronounced on 29-1-1999, whereas the judgment in this case has been pronounced by the metropolitan magistrate, on 25-3-1998. therefore, it is obvious that the learned magistrate and the learned counsel for both the sides could not have been aware of the ruling of the supreme court, as it came into existence later. in the said judgment, the learned judges of the supreme court had directed the matter to be sent to the trial court for appropriate orders taking into consideration the provision under section 29(2) of the code of criminal procedure and the observation made in their judgment. in the present case also, i am of the view that the matter has to be sent back to the trial court to pass appropriate orders taking into consideration the provision under section 29(2) of the code of criminal procedure and also the principle of law enunciated by the supreme court of india.5. on a consideration of the submissions made by the learned counsel for both the sides and the records of the case, i am of the view that no other legal error except the question of sentence has been committed by the learned trial magistrate and, therefore, there is no need to order de novo trial.6. in the result, the conviction of the offence under section 138 of the negotiable instruments act imposed on the revision petitioner is maintained and the modified sentence awarded by the viith additional sessions judge is set aside. the matter shall be sent to the trial magistrate to pass orders regarding sentence and award of compensation, if any, deemed necessary. the revision petition is ordered accordingly. consequently, the connected miscellaneous petition is closed.

Judgment:
ORDER

K. Natarajan, J.

1. This criminal revision petition has been filed against the order of VIIth Additional Sessions Judge, Chennai dated 11-9-1998 modifying the conviction and sentence passed by the XIth Metropolitan Magistrate, Chennai under Section 138 of the Negotiable Instruments Act.

2. The brief facts are :-

On the complaint of the respondent, the revision petitioner/accused was tried for an offence under Section 138 of the Negotiable Instruments Act by the XIth Metropolitan Magistrate, Saidapet, Chennai on the ground that the accused issued a cheque for Rs. 1,25,000/- which got bounced from the Bank. The learned trial Magistrate found the accused guilty and imposed a sentence of three months simple imprisonment and also a fine of Rs. 1,25,000/-, in default to undergo simple imprisonment for three months.

3. On appeal, the learned VIIth Additional Sessions Judge, Chennai set aside the order of imprisonment for three months, but confirmed the sentence of the fine of Rs. 1,25,000/-.

4. The learned counsel for the revision petitioner urged a legal submission relying on the decision of the Supreme Court of India in K. Bhaskaran v. Sankaran Vaidhyan Balan reported in : 1999CriLJ4606 . The Supreme Court had observed therein that even though the Negotiable Instruments Act has provided that fine amounting to twice the cheque can be imposed by the Magistrate, the limit of fine that can be imposed by a First Class Magistrate as provided under Section 29(2) of the Code of Criminal Procedure also should be taken into account and had held that a First Class Magistrate cannot impose a fine more than Rs. 5000/-. It is useful to refer to paragraphs 28 to 31 of the ruling of the Supreme Court, which is extracted below :-

28. In this context a reference to Section 29(2) of the Code is necessary as it contains a limitation for the Magistrate of first class in the matter of imposing fine as a sentence or as a part of the sentence. Section 29(2) reads thus:-

The Court of a Magistrate, of the firs class may pass a sentence of imprisonment for a term not exceeding three years or of fine not exceeding five thousand rupees or of both. 29. The trial in this case was held before a Judicial Magistrate of first class who could not have imposed a fine exceeding Rs. 5000/- besides imprisonment. The High Court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit.

30. It is true, if a Judicial Magistrate of first class were to order compensation to be paid to the complainant from out of the fine released the complainant will be the loser when the cheque amount exceeded the said limit. In such a case a complainant would get only the maximum amount of rupees five thousand.

31. However, the Magistrate in such cases can alleviate the grievance of the complainant by making resort to Section 357(3) of the Code. It is well to remember that this Court has emphasised the need for making liberal use of that provision. Hari Krishna and State of Haryana v. Sukhbir Singh : 1989CriLJ116 No limit is mentioned in the sub-section and, therefore, a Magistrate can award any sum as compensation. Of course while fixing the quantum of such compensation the Magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus even if the trial was before a Court of Magistrate of first class in respect of a cheque which covers an amount exceeding Rs. 5000/- the Court has power to award compensation to be paid to the complainant.

The said ruling of the Supreme Court has been pronounced on 29-1-1999, whereas the judgment in this case has been pronounced by the Metropolitan Magistrate, on 25-3-1998. Therefore, it is obvious that the learned Magistrate and the learned counsel for both the sides could not have been aware of the ruling of the Supreme Court, as it came into existence later. In the said judgment, the learned Judges of the Supreme Court had directed the matter to be sent to the trial Court for appropriate orders taking into consideration the provision under Section 29(2) of the Code of Criminal Procedure and the observation made in their judgment. In the present case also, I am of the view that the matter has to be sent back to the trial Court to pass appropriate orders taking into consideration the provision under Section 29(2) of the Code of Criminal Procedure and also the principle of law enunciated by the Supreme Court of India.

5. On a consideration of the submissions made by the learned counsel for both the sides and the records of the case, I am of the view that no other legal error except the question of sentence has been committed by the learned trial Magistrate and, therefore, there is no need to order de novo trial.

6. In the result, the conviction of the offence under Section 138 of the Negotiable Instruments Act imposed on the revision petitioner is maintained and the modified sentence awarded by the VIIth Additional Sessions Judge is set aside. The matter shall be sent to the trial Magistrate to pass orders regarding sentence and award of compensation, if any, deemed necessary. The revision petition is ordered accordingly. Consequently, the connected miscellaneous petition is closed.