SATISH P. BHATTversusSTATE OF MAHARASHTRA & ANR

                   [2024] 1 S.C.R. 241 : 2024 INSC 16
                                     Case Details

                                  Satish P. Bhatt
                                           v.
                     The State of Maharashtra & Anr
                        (Criminal Appeal No.42 of 2024)
                                  03 January 2024
                [Vikram Nath* and Rajesh Bindal, JJ.]
                              Issue for Consideration
       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 the order of suspension of sentence. Whether the
       High Court was justified.

                                      Headnotes
       Judicial Directives – Disregard for – The High Court cancelled
       the order of suspension of sentence and bail granted to the
       appellant and intervenor (petitioner before the High Court) as
       they violated the undertaking given before the High Court and
       further violated the condition in an order granting extension
       of time to comply – Propriety:
       Held: 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/- (Out of
       the said amount Rs.73,50,000/- was already paid and remaining
       amount of Rs.3,90,00,000/- was to be paid in instalments) would
       be paid to the complainant-respondent no.2 – Based on the said
       undertaking an interim protection was granted by suspending the
       sentence of imprisonment and they were directed to be released
       on bail on furnishing a personal bond – However, there was a
       failure to fulfil financial obligations – Appellant and intervenor
       made submissions before the Supreme Court regarding, who is
       to pay how much amount – The Court not inclined to go into the
       said question – The fact remains that the total amount agreed
       to be paid has not been paid and as per the order of the High
       Court, the revisionists (appellant and intervenor) 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       way of bail and suspension of sentence, would stand withdrawn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 – No infirmity in the impugned
       order of the High Court – The appeal is accordingly dismissed
* Author
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                    DIGITAL SUPREME COURT REPORTS


       with costs quantified at Rs. 5 lakhs to be paid to the respondent
       No. 2 (Complainant). [Paras 7, 8, 17, 19]

                                List of Keywords
       Disregard for judicial directives; undermining judicial efficacy.

           Other Case Details Including Impugned Order and
                             Appearances

       CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.42 of
       2024.
       From the Judgment and Order dated 23.07.2019 of the High Court
       of Judicature at Bombay in CRLAP No.244 of 2019.
       Appearances:
       Atul Babasaheb Dakh, Diganta Gogoi, Bitu Kumar Singh, Advs. for
       the Appellant.
       Aaditya Aniruddha Pande, Siddharth Dharmadhikari, Bharat Bagla,
       Sourav Singh, Aditya Krishna, Siddharth Sangal, Ms. Richa Mishra,
       Chirag Sharma, Ms. Nilanjani Tandon, Ms. Harshita Agrawal, Manoj
       K. Mishra, Ghanshyam Upadhyay, A. Baskar, J.K. Mishra, Umesh
       Dubey, Vishal, Ms. Madhulika, Advs. for the Respondents.

                 Judgment / Order of The Supreme Court
                                    Judgment
       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 Petitioner stands
       as a testament to how an 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.
[2024] 1 S.C.R.                                                                243

        SATISH P. BHATT v. THE STATE OF MAHARASHTRA & ANR


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 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 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 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….”


1    NI Act
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                  DIGITAL SUPREME COURT REPORTS


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 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 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 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.
[2024] 1 S.C.R.                                                        245

      SATISH P. BHATT v. THE STATE OF MAHARASHTRA & ANR


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, 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 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 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
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                  DIGITAL SUPREME COURT REPORTS


       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
       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 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 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
[2024] 1 S.C.R.                                                         247

      SATISH P. BHATT v. THE STATE OF MAHARASHTRA & ANR


     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.
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 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
    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.


     Headnotes prepared by: Ankit Gyan              Result of the case: Appeal
                                                                    dismissed.