NOOR MOHAMMED versus KHURRAM PASHA on 2 August 2022

1. Leave granted.

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2. This appeal challenges the correctness of the judgment andorder dated 17.12.2021 passed by the High Court of Karnataka atBengaluru (‘the High Court’, for short) in Criminal Revision Petition No.39 of 2021.

3. The instant proceedings arise out of Complaint Case No. 244of 2019 instituted by the Respondent herein in respect of offencepunishable under Section 138 of the Negotiable Instruments Act, 1881(‘the Act’, for short) in the court of the Senior Civil Judge & JMFC,Nagamangala, submitting inter alia:

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a)A cheque dated 25.02.2019 in the sum of Rs.7,00,000/- wasdrawn by the Appellant in favour of the Respondent towardsDrepayment of hand loan received by the Appellant from theRespondent.

b)Said cheque was presented for encashment on 01.03.2019but was dishonoured on account of “insufficient funds”.

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c)Statutory notice was issued by the Respondent to the Appellanton 12.03.2019.

d)However, the Appellant failed to repay the amount to theRespondent.

e)Consequently, the Appellant was guilty of offence punishableunder Section 138 of the Act.

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4. After the cognizance of the aforesaid complaint was taken andthe summons were issued, the Appellant appeared before the concernedcourt through his counsel on 16.08.2019. On the very same date, anorder was passed by the Trial Court directing the Appellant to deposit20% of the cheque amount as interim compensation in terms of Section143(A) of the Act within 60 days. The period so granted, got over on15.10.2019 and on the request of the Appellant further extension of 30days was granted; but no deposit was made by the Appellant.

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A5. When the matter was taken-up for examination of witnesses,an application was made on behalf of the Appellant under Section 145(2)of the Act seeking permission to cross-examine the Respondent. In viewof his failure to deposit the interim compensation as directed, theapplication preferred by the Appellant was found to be not maintainableand was dismissed by the Trial Court vide order dated 25.10.2019.B

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6. By subsequent order dated 29.11.2019 the Complaint Case wasaccepted by the Trial Court finding the Appellant guilty under Section138 of the Act. The Trial Court directed the Appellant to pay fine in thesum of Rs.7,00,000/-, in default whereof to undergo simple imprisonmentfor six months. Out of the aforesaid sum, Rs.5,000/- was to be remittedCto the State while the remaining amount of Rs.6,95,000/- was directed tobe made over to the Respondent as compensation under Section 357 ofthe Criminal Procedure Code, 1973 (‘the Code’, for short).

7. The Appellant being aggrieved, preferred Criminal Appeal No.190 of 2019 in the court of V Addl. District and Sessions Judge, Mandya,Dwhich appeal however was dismissed by the Appellate Court by itsorder dated 28.10.2020. The order of conviction and sentence passed bythe Trial Court was thus affirmed. During the course of its order one ofthe points raised for consideration was whether the Trial Court had givensufficient opportunity to the Appellant to cross- examine the Respondent.EIt was observed by the Court:- “18. It is relevant to mention here that in the present appeal also,after filing of this appeal, accused did not comply with the orderof this Court dated 30.12.2019 to deposit 20% of cheque amount,hence, it discloses that the accused is reluctant in complying withFthe order of this Court. Under these circumstances, this Court isof the opinion that learned Magistrate has rightly refused the prayermade by accused seeking permission to cross-examine P.W.1 andproceeded to pass impugned order”

8. The matter was carried further by the Appellant by filing CriminalGRevision Petition No. 39 of 2021 in the High Court. The High Court byits judgment and order dated 17.12.2021, which is presently underchallenge, dismissed said Criminal Revision Petition affirming the viewtaken by the courts below. It was observed that the conduct of theAppellant in not depositing the interim compensation as directed, showedthat he was only interested in protracting the proceedings for one reasonHor the other.

9. In this appeal while issuing notice to the Respondent, this Courtby its Order dated 01.04.2022 directed the Appellant to deposit a sum ofRs.3,50,000/- in the Registry of this Court and the amount has since thenbeen deposited.

10. We have heard Mr. Shailesh Madiyal, learned advocate forthe Appellant and Mr. Anand Nuli, learned Advocate for the Respondent.

In the submission of Mr. Madiyal, in case the order of interimcompensation as directed in terms of Section 143A of the Act is notcomplied with, the amount can be recovered in terms of Sub-Section 5of said Section 143A as if it were a fine under Section 421 of the Code,but it would not be within the competence of the court to deprive anaccused of his right to cross- examine a witness; the denial of suchright resulted in great prejudice to the Appellant and as such, thejudgments and orders passed by the courts below suffered from illegalityand are required to be set aside.

On the other hand, Mr. Nuli submits that the orders passed by thecourts below were consistent with the mandate of Section 143A and theright to cross- examine was rightly closed by the courts below.

11. Before we examine the matter in issue, we may extract therelevant provision namely Section 143A of the Act, which is to the followingeffect:- “143A. Power to direct interim compensation. – (1)Notwithstanding anything contained in the Code of CriminalProcedure, 1973 (2 of 1974), the Court trying an offence undersection 138 may order the drawer of the cheque to pay interimcompensation to the complainant –

(a) in a summary trial or a summons case, where he pleads notguilty to the accusation made in the complaint; and (b) in any other case, upon framing of charge.

(2) The interim compensation under sub-section (1) shall not exceedtwenty per cent of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days fromthe date of the order under sub-section (1), or within such furtherperiod not exceeding thirty days as may be directed by the Courton sufficient cause being shown by the drawer of the cheque.

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A(4) If the drawer of the cheque is acquitted, the Court shall directthe complainant to repay to the drawer the amount of interimcompensation, with interest at the bank rate as published by theReserve Bank of India, prevalent at the beginning of the relevantfinancial years, within sixty days from the date of the order, orwithin such further period not exceeding thirty days as may beBdirected by the Court on sufficient cause being shown by thecomplainant.

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(5) The interim compensation payable under this section may berecovered as if it were a fine under section 421 of the Code ofCriminal Procedure, 1973 (2 of 1974).

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(6) The amount of fine imposed under section 138 or the amountof compensation awarded under section 357 of the Code ofCriminal Procedure, 1973 (2 of 1974), shall be reduced by theamount paid or recovered as interim compensation under thissection.”D

12. After empowering the court to pass an order directing theaccused to pay interim compensation under Sub-Section 1 of Section143A, Sub-Section 2 then mandates that such interim compensation shouldnot exceed 20 per cent of the amount of the cheque. The period withinwhich the interim compensation must be paid is stipulated in Sub-SectionE3, while Sub-Section 4 deals with situations where the drawer of thecheque is acquitted. Said Sub-Section 4 contemplates repayment ofinterim compensation along with interest as stipulated. Sub-Section 5 ofsaid Section 143A then states “the interim compensation payable underthis Section can be recovered as if it were a fine”. The expression interimFcompensation is one which is “payable under this Section” and wouldthus take within its sweep the interim compensation directed to be paidunder Sub-Section 1 of said Section 143A.

13. The remedy for failure to pay interim compensation as directedby the court is thus provided for by the Legislature. The method andGmodality of recovery of interim compensation is clearly delineated bythe Legislature. It is well known principle that if a statute prescribes amethod or modality for exercise of power, by necessary implication, theother methods of performance are not acceptable. While relying on thedecision of the Privy Council in Nazir Ahmad vs. King Emperor[1], a Bench of three Judges of this Court made following observations inState of Uttar Pradesh vs. Singhara Singh and others[2].

“7. In Nazir Ahmed case, 63 Ind App 372; (AIR 1936 PC 253(2)) the Judicial Committee observed that the principle applied inTaylor v. Taylor [(1875) 1 Ch D 426, 431] to a court, namely, thatwhere a power is given to do a certain thing in a certain way,thething must bedone in that way or notat alland that other methodsof performanceare necessarily forbidden, applied to judicialofficers making arecordunderSection164and, therefore, heldthat the Magistrate could not give oral evidence of the confessionmade to him which he had purported to record under Section 164of the Code. It was said that otherwise all the precautions andsafeguards laid down in Sections 164 and 364, both of which hadto be read together, would become of such trifling value as to bealmost idle and that “it would beanunnaturalconstructiontoholdthatanyotherprocedure was permitted than that which is laiddown with suchminuteparticularityinthesectionsthemselves”.

8. The rule adopted in Taylor v. Taylor [(1875) 1 Ch D 426, 431]is well recognised and is founded on sound principle. Its result isthat if a statute has conferred a power to do an act and has laiddown the method in which that power has to be exercised, itnecessarily prohibits the doing of the act in any other manner thanthat which has been prescribed. The principle behind the rule isthat if this were not so, the statutory provision might as well nothave been enacted. AMagistrate, therefore, cannot in the courseof investigation recordaconfessionexceptinthemannerlaiddownin Section164.The power to record the confession had obviouslybeen given so that the confession might be proved by the recordof it made in the manner laid down. If proof of the confession byother means was permissible, the whole provision of Section 164including the safeguards contained in it for the protection ofaccused persons would be rendered nugatory. The section,therefore, by conferring onMagistratesthepowertorecordstatementsor confessions,bynecessaryimplication,prohibitedaMagistrate from giving oral evidence of the statements orconfessionsmadetohim.”

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AIn J.N. Ganatra vs. Morvi Municipality[3], exercise of power ofdismissal having not been done in conformity of the Act, the same wasset aside. It was stated:- “4. We have heard the learned counsel for the parties. We are ofthe view that the High Court fell into patent error in reaching theBconclusion that the dismissal of the appellant from service, in utterviolation of Rule 35 of the Rules, was an “act done in pursuanceor execution or intended execution of this Act …”. It is no doubtcorrect that the General Board of the Municipality had the powerunder the Act to dismiss the appellant but the said power couldonly be exercised in the manner indicated by Rule 35 of the Rules.CAdmittedlythepowerofdismissalhasnotbeen exercised theway it was required to be done under the Act. It is settledproposition of law that a power under a statute has to be exercisedin accordance with the provisions of the statute and in no othermanner.In view of the categoric finding given by the High CourtDto the effect that the order of dismissal was on the face of itillegal and void, we have no hesitation in holding that the dismissalof the appellant was not an act done in pursuance or execution orintended execution of the Act. The order of dismissal being patentlyand grossly in violation of the plain provisions of the Rules. Itcannot be treated to have been passed under the Act.”

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In Commissioner of Income Tax, Mumbai vs. Anjum M.H.Ghaswala[4], a Constitution Bench of this Court stated the normal rule ofconstruction in such cases as under:- F

“27. Then it is to be seen that the Act requires the Board toexercise the power under Section 119 in a particular manner i.e.by way of issuance of orders, instructions and directions. Theseorders, instructions and directions are meant to be issued to otherincome tax authorities for proper administration of the Act. TheGCommission while exercising its quasi-judicial power of arrivingat a settlement under Section 245-D cannot have the administrativepower of issuing directions to other income tax authorities. Itisa 3 (1996) 9 SCC 495H4 (2002) 1 SCC 633

normalrule ofconstructionthat when a statute vests certain powerin an authority to be exercised in a particular manner then the saidauthority has to exercise it only in the manner provided in thestatute itself. If that be so, since the Commission cannot exercisethe power of relaxation found in Section 119(2)(a) in the mannerprovidedthereinitcannotinvokethatpower under Section119(2)(a) to exercise the same in its judicial proceedingsbyfollowingaprocedurecontrarytothat providedinsub-section(2)ofSection119.”

14. The concerned provision nowhere contemplates that anaccused who had failed to deposit interim compensation could be fastenedwith any other disability including denial of right to cross-examine thewitnesses examined on behalf of the complainant. Any such orderforeclosing the right would not be within the powers conferred upon thecourt and would, as a matter of fact, go well beyond the permissibleexercise of power.

15. Since the right to cross-examine the respondent was deniedto the Appellant, the decisions rendered by the courts below suffer froman inherent infirmity and illegality. Therefore, we have no hesitation inallowing this appeal and setting aside the decisions of all three courtswith further direction that Complaint Case No. 244 of 2019 shall standrestored to the file of the Trial Court. The Trial Court is directed to permitthe Appellant to cross-examine the Respondent and then take theproceedings to a logical conclusion. With these observations the appealis allowed.

16. It is also directed that 20% of the cheque amount namelyRs.1,40,000/- must be deposited by the Appellant as interim compensation.The Registry is directed to make over a sum of Rs.1,40,000/- to the TrialCourt i.e. Senior Civil Judge & JMFC, Nagamangala, Karnataka. Theamount shall be kept in deposit in Complaint Case No. 244 of 2019 andshall abide by such orders as the Trial Court may deem appropriate topass. Rest of the amount along with accrued interest, if any, shall bemade over to the Appellant. The Registry shall take out a Pay Order inthe name of the Appellant which shall be handed over to the learnedcounsel for the Appellant.

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[2022] 6 S.C.R.

A17. In the end, it must be clarified that we have not and shall notbe taken to have reflected on the merits of the matter which shall begone into after affording right to cross-examine as stated above.

Bibhuti Bhushan BoseB

Appeal allowed.

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