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

JUDG MENT

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

Signature Not Verified Petitioner stands as a testament to how an

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

Instruments Act, 18811 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

fixed 8th October, 2018 for reporting

compliance.

9. As per the undertaking, Rs.2 crores was to be

paid on or before 30th 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

before 15th March, 2019. Thereafter the matter

was taken up by the High Court on 20th March,

2019 by which time they had paid only Rs.82

lakhs. Further time was sought to pay the

balance amount till 20th 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

payment of Rs.1,69,10,000/- till 20th 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

pending revision on 16th 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

order dated 3rd July, 2018 and, therefore, he

may be absolved of the charges and acquitted.

On the said application, notice was issued to the

complainant on 19th June, 2019 fixing 10th July,

Civil Appeal No.1598 of 2023 Page 8 of 17

 2019. On that date, it was adjourned to 16th

July, 2019. Thereafter on 16th July it was

adjourned to 23rd July, 2019. On 23rd July,

2019, the High Court passed the impugned

order cancelling the suspension of sentence and

bail granted vide order dated 3rd July, 2018 for

non-compliance of the undertaking and in view

of the order dated 20th 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 @

12% p.a. from 15th 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

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