The Supreme Court of India (“Supreme Court”), in the case of Muskan Enterprises v. The State of Punjab, Criminal Appeal No. 5491/2024 on December 19, 2024,  held that the dismissal of a petition filed under Section 482 of the Code of Criminal Procedure, 1973 (“Cr.P.C.”) does not prevent the accused from filing a subsequent petition filed due to a change in the law, even without seeking specific liberty in the earlier petition. It was also held that if the earlier petition was withdrawn without seeking liberty to file afresh, the subsequent Petition will still be maintainable.

FACTS:

1. The Appellants were convicted for an offence under Section 138 of the Negotiable Instruments. Act, 1881 (“N.I. Act”). The second Appellant, being the proprietor of the first Appellant, was sentenced to two years of rigorous imprisonment and was further, directed to pay a compensation of Rs. 74,00,000/- (Rupees Seventy-Four Lakhs only).

2. The Appellants appealed the conviction and sentence before the Sessions Court, which suspended the sentence and imposed a deposit of 20% (twenty percent) of the compensation amount, as per Section 148 of N.I. Act.

3. The Appellants challenged the direction of the deposit of 20% (twenty percent) of the compensation amount, which was a condition for suspension of the sentence following their conviction under Section 138 of the N.I. Act, by way of a Petition under Section 482 of Cr.P.C before the High Court of Punjab and Haryana.

4. At that time, the decision of the Supreme Court in Surinder Singh Deswal v. Virender Gandhi, 2019 (11) SCC 341 governed the interpretation of Section 148 of the N.I. Act, thereby, making the deposit condition mandatory. As a result of the decision in Surinder Singh (supra), the Appellants made a statement to withdraw the Petition, which was granted by the High Court.

5. Subsequently, the Supreme Court in a matter concerning Section 148 of the N.I. Act titled Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Limited, (2023) 10 SCC 446 held that in exceptional cases, the Appellate Court is within its right to dispense away with such a requirement.

6. In light of the change in law, the Appellants filed a fresh Petition under Section 482 of Cr.P.C., which was again dismissed by the High Court on the grounds that it was not maintainable due to the earlier petition being withdrawn without leave to file afresh.

7. The Appellants, as a result of the above, filed the Special Leave Petition before the Supreme Court.

RELEVANT LAW:

The relevant extract of Section 148 of the N.I. Act is reproduced hereinbelow:

 “(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial Court”

The relevant extract of the judgment in Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Limited, (2023) 10 SCC 446 is reproduced hereinbelow:

“…. 6. What is held by this Court is that a purposive interpretation should be made of Section 148 of the NI Act. Hence, normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% (twenty percent) will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded.

7. Therefore, when Appellate Court considers the prayer under Section 389 of the Cr. P.C. of an accused who has been convicted for offence under Section 138 of the N.I. Act, it is always open for the Appellate Court to consider whether it is an exceptional case which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount. As stated earlier, if the Appellate Court comes to the conclusion that it is an exceptional case, the reasons for coming to the said conclusion must be recorded...”.

DECISION:

The Supreme Court held that change of law can legitimately be regarded as a vital change in circumstance clothing the high court with the power, competence and jurisdiction to entertain the subsequent petition notwithstanding the fact that the earlier petition was withdrawn without obtaining any leave. The Court clarified that Section 148 of the N.I. Act grants the Appellate Court discretion to order a deposit pending Appeal, with a minimum amount of 20% (twenty percent) of the fine or compensation. It emphasized the importance of interpreting the terms "may" and "shall" in their proper contexts, concluding that the Appellate Court should retain discretion to refrain from ordering a deposit in exceptional cases. Additionally, the Court held that a change in law, specifically the new interpretation of Section 148 of the N.I. Act in Jamboo Bhandari (supra), Case justified the filing of the subsequent Petition.

The Supreme Court also observed that though there being a contradiction in the judgments of Surinder Singh (supra) and Jamboo Bhandari (supra), the views expressed in Jamboo Bhandari (supra) was held to be correct. It was also held that there is no provision akin to res judicata, as is traceable in Code of Civil Procedure, 1973, in criminal proceedings. There is a specific provision in Cr.P.C. which prohibits power of review. In light of the above, the Supreme Court observed that the High Court was unjustified in dismissing the subsequent Petition on the grounds that the Appellants had withdrawn the earlier Petition without leave to file afresh, rendering the new Petition inadmissible.  As a result, the Supreme Court allowed the Appeal and remitted the matter to the Sessions Court to reconsider the deposit issue in light of the Jamboo Bhandari (supra).

AUTHOR’S VIEW:

The decision highlights the importance of allowing subsequent petitions when there is a significant change in law, without abusing the process of justice. The parties are vested with the right to file a fresh petition, even in a case, when a higher court is seized of a matter, which would have a direct impact on the case. It is also to be borne in mind that such a right cannot be used as a right of ‘review’, which is strictly prohibited in Cr.P.C. It is pertinent to highlight that the decisions of Muskan Enterprises (supra), Surinder Singh (supra) and Jamboo Bhandari (supra) were passed by a bench of similar composition. The bench in Muskan Enterprises (supra) while acknowledging the divergence in view in Surinder Singh (supra) and Jamboo Bhandari (supra) still proceeded to uphold the view in Jamboo Bhandari (supra), which ought to have referred the matter to a larger bench.  

Please find attached a copy of the judgment.

This update has been contributed by Namitha Mathews (Partner) and Pulkit Malhotra (Senior Associate).

Argus Knowledge Centre is now on WhatsApp! Send us a message on +91 8433523504 to receive updates from our Knowledge Centre.