Credit Consumers Association « Protecting Your Interest!

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The Recovery of Loans

The accepted practice is for people to approach civil courts for relief in respect of civil offences and for criminal offences to be tried in criminal courts. In addition to this, no one can be sent to gaol because of having committed a civil offence. Neither can people be jailed merely because they are unable to repay debts. This has been accepted not only at the national level but has in fact been enshrined in international covenants which have been signed by a vast majority of the world’s countries.

However, there are times when some financial entities and assorted money lenders have been accused of trying to turn civil wrongs into criminal offences by abusing the legal process. In all probability
this is done to pressurize borrowers to repay money.

The method which is apparently usually used is to accuse the borrower of having cheated and having committed a criminal breach of trust. Both cheating and criminal breaches of trust are offences under the Indian Penal Code, the former in the infamous Section 420 and the latter in Section 406.

High Courts are of course empowered to stop this from happening and frequently do. In the case of Alpic Finance v. Sadasivam, the Supreme Court upheld the order of the High Court quashing a criminal complaint against a borrower under such circumstances.

Also, although lawyers often use the ‘cheating and criminal breach of trust’ template, it is unclear exactly how it is possible to be guilty of both offences at the same time considering that, as the Madras High Court held in the 1936 case of R v. McIver, the two are incompatible. One rests on an intention to deceive while the other rests on a foundation of trust, so to speak.

Even if it is somehow possible to commit the offences simultaneously, the fact remains that civil wrongs are not to be disguised as criminal offences, and ordinarily, it should be possible to prevent this from happening by approaching the High Court.

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Maintainability of the Bail Applications in High Court: Time to Ponder

Maintainability of the Bail Applications in High Court: Time to Ponder

Through this detailed article I make an endeavour to show that the bail applications being filed in the High Courts entire the country are not maintainable and the Hon’ble High Courts do not have any jurisdiction to even entertain the bail petitions, what to talk of passing any order.

It is a known fact that Chapter 23 of Cr.P.C. deals with provisions specifically related to bail but the epicentre of my article shall not be all the provisions related to bail but shall be Clause 1 of Section 439 Cr.P.C. Before trying to interpret Clause 1 of Section 439 Cr.P.C it becomes pivotal to mention here that bail applications in the courts, across the whole country, are firstly filed in the court of Magistrate. When the bail applications get dismissed from the court of Magistrate then bail applications are moved, u/S 439 Cr.P.C., in the court of Sessions. If the Court of Sessions grants bail to an accused-applicant then the matter ends but if the Court of Sessions rejects the bail then an accused-applicant rushes to the High Court for seeking bail u/S 439 Cr.P.C. This trend is being followed in all the courts of the country. Now reverting to Section 439(1) Cr.P.C., it reads as follows:

Section 439: Special powers of High Court or Court of Session regarding bail-
(1) A High Court or Court of Session may direct-
(a) That any person accused of an offence and in custody be released on bail and if the offence is of the nature specified in sun-section (3) of Section 437, may impose any condition which it considers necessary for the purposes mentioned in that sub-section.
(b) That any condition imposed by a Magistrate when releasing any person on bail be set aside or modified.

Under Section 439 Cr.P.C. concurrent powers have been conferred to the High Court and Court of Session in matters relating to the grant of bail as the word ‘or’ provides equal powers to both the courts. This remains an undisputed fact. Now, the question which always trickles and boggles my mind is if the bail application has been moved by an accused person in the Court of Sessions u/S 439 Cr.P.C. then can he move another bail application before High Court also u/S 439 Cr.P.C.? I think that the answer to this query should be ‘NO’ as Section 439(1) Cr.P.C. provides an option to an accused person to move the bail application, once it gets rejected from the court of Magistrate, either in the Court of Session or before the High Court.

Through Section 439 Cr.P.C. legislature wanted to confer an option to an accused person to move the bail application, once it gets rejected from the Court of Magistrate, to either the Court of Session or the High Court. That’s why it had used the word ‘or’ conferring equal powers to both the courts in matters relating to the grant of bail. If the accused person did not want to move the bail application in the Court of Sessions, because of certain unavoidable reasons, then he could have moved the bail application in the High Court. This is what Hon’ble Apex Court has also said in Gurcharan Singh and others v State(Delhi Administration)((1978)1 SCC 118)(Para 24) :

“24. Section 439(1) Cr.P.C. of the new Code, on the other hand, confers special powers on the High Court or the Court of Session in respect of bail. Unlike under Section 437(1) there is no ban imposed under Section 439(1) Cr.P.C. against granting of bail by the High Court or the Court of Session to persons accused of an offence punishable with death or imprisonment for life. It is, however, legitimate to suppose that the High Court or the Court of Session will be approached by an accused only after he has failed before the Magistrate and after the investigation has progressed throwing light on the evidence and circumstances implicating the accused. Even so, the High Court or the Court of Session will have to exercise its judicial discretion in considering the question of granting of bail under Section 439(1) Cr.P.C. of the new Code. ….”

Let me illustrate a very simply paradigm to explain the things clearly. Suppose a father says to his son “Son, you can spend your summer vacations of 2010 in Canada or in London.” This will provide a choice to the son to choose his summer destination which can be either Canada or London. This interpretation will never mean that son has been provided with an opportunity to visit both Canada and London during summer vacations. He has been allowed only to visit either of the two places. Suppose Son spends his part summer vacations in London and returns to his house and then seeks leave from his father to visit Canada. The father will straightaway refuse to grant any leave to visit Canada because he had only provided one of the two places for summer vacations. He never intended both the places. Here the word “or” cannot be interpreted as word “and”. The same thing must be considered in Section 439(1) Cr.P.C. Unfortunately instead of the intention of the legislature being followed, in letter and spirit, a wrong custom has developed in all the High Courts to entertain and decide the bail applications only after they get rejected from the Court of Session. It looks as if High Court sits as a court of appeal over the Court of Session in matters relating to the grant of bail, confirming, reversing, altering the findings and order recorded by the Court of Session, which is legally not tenable.

The Constitution Bench of the Hon’ble Apex Court has further defined the word ‘or’ in M/s Ranchhoddas Atmaram and another v The Union of India and others(AIR 1961 SC 935)to mean either of the two. Para 13 of the aforesaid ruling states

“ 13. It is clear that if the words form an affirmative sentence, then the condition of one of the clauses need only be fulfilled. In such a case “or” really means “either” “or”. In the shorter Oxford Dictionary one of the meanings of the word “or” is given as “A particular coordinating two(or more) words, phrases or clauses between which there is an alternative.” It is also there stated, “The alternative expressed by “or” is emphasised by prefixing the first member or adding after the last, the associated adv. EITHER.” So, even without “either,” “or” alone creates an alternative. If, therefore, the sentence before us is an affirmative one, then we get two alternatives, any one of which may be chosen without the other being considered at all. In such a case it must be held that a penalty exceeding Rs.1,000 can be imposed.”

Through the above mentioned case Constitution Bench of the Apex Court clarified way back in the year 1961 as to what word “or” really connotes. A 3 Judges (Division) Bench of the Hon’ble Supreme Court further got an opportunity to interpret the word “or”. In Manmohan Das Shah and others v Bishun Das(AIR 1967 SC 643) the Division Bench tried to interpret and differentiate between the word “or” and “and”. Para 6 reads as follows

“6.In our view Clause (c)of Section 3(1) cannot bear the construction suggested by Mr. Desai. The clause is couched in simple and unambiguous language and in its plain meaning provides that it would be a good ground enabling a landlord to sue for eviction without the permission of the District Magistrate if the tenant has made or has permitted to be made without the landlord’s consent in writing such construction which materially alters the accommodation or is likely substantially to diminish its value. The language of the clause makes it clear that the legislature wanted to lay down two alternatives which would furnish a ground to the landlord to sue without the District Magistrate’s permission, that is, where the tenant has made such construction which would materially alter the accommodation or which would be likely to substantially diminish its value. The ordinary rule of construction is that a provision of a statute must be construed in accordance with the language used therein unless there are compelling reasons, such as, where a literal construction would reduce the provision to absurdity or prevent the manifest intention of the legislature from being carried out. There is no reason why the word “or” should be construed otherwise than in its ordinary meaning. ……”

Section 24 I.P.C. defines Dishonestly as “ Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly.” Here also the interpretation of the word “or” shall be done in the same way as it was done earlier in the other cases. Thus, causing only wrongful gain or only wrongful loss to any person shall be sufficient to come within the definition of dishonestly. This has been affirmed by the Supreme Court in Dr. Vimla v The Delhi Administration(AIR 1963 SC 1572).Para 5 reads as follows:

“…………To illustrate, in the definition of “dishonestly, wrongful gain or wrongful loss is the necessary ingredient. Both need not exist, one would be enough………..”.

In the same way Section 397 Cr.P.C. provides the concurrent powers of revision to both the Sessions Court and the High Court by virtue of the word “or”. But in revision opposite trend is followed. A person moves a revision petition either in the Court of Session or the High Court and not in both the courts. This is the prevalent trend in all the courts of the country. The noticeable thing is that the word “or” is there in both the Sections- Section 397(1) Cr.P.C. and Section 439(1) Cr.P.C. but is being interpreted in a different way in both the sections. A revision petition once filed in the Court of Session and dismissed is not filed again in the High Court as both enjoy concurrent powers in matters relating to revision but a bail application moved before the Court of Session if gets dismissed is again moved in the High Court though both the Courts enjoy equal powers in matters relating to the grant of bail. In C.B.I. V State of Gujarat ((2007)6 SCC 156)(Para 4) SC has clarified that against the order of C.J.M. under Section 397 Cr.P.C. either the Sessions Court or the High Court could be approached. Lawyers and Judges are aware that once revision gets dismissed another revision does not lie. This is by virtue of Section 397(3) Cr.P.C., which debars any further revision by the same person whose revision has been dismissed earlier. There is no such provision in Section 439 Cr.P.C., which debars filing of further bail application if the bail application gets rejected once. Absence of any such provision would not change the interpretation of word “or”. So, if any such provision would have been there in the statute then there would not have been further bail petitions, once the bail application is filed before the Court of Session.

The next question which makes my mind anxious is that can the High Court entertain the bail application directly after it gets rejected from the court of Magistrate? The answer should be a big yes as u/S 439 Cr.P.C. it can be approached directly bypassing the court of Session but I fear it might invite wrath of the Hon’ble Judges and the reporting section of High Court as it has been mandated by law to annex the bail rejection order of the Court of Session in the bail petition. Clause 1 of Rule 18 of the Chapter 18 of Allahabad High Court Rules,1952 says

18. Application for bail----(1) No application for bail shall be entertained unless accompanied by a copy of the judgment or order appealed against or sought to be revised and a copy of the order passed by the Sessions Judge on the bail application for the applicant and unless the accused has surrendered except where he has been released on bail after conviction under Section 389(3) of the Code of Criminal Procedure,1973.

So, Rule 18(1) of the High Court Rules mandates to annex the copy of the bail rejection order passed by the Sessions Judge, which indirectly implies that one has to move the bail application first before the Court of Session and then the High Court. The Rule thus tries to interpret the word “or” used in Section 439 Cr.P.C. as the word “and”, which is legally not feasible. It is also widely known that if there is a conflict between any Central law and the State law(local law) then it is the Central law, which prevails. The way High Courts are entertaining and deciding the bail applications, it appears as if they are sitting in a court of appeal in matters relating to the grant of bail. The Sessions Judge dismisses the bail application but the High Court allows the bail application. Can the High Court entertain and pass any order opposite to the order passed by the Court of Session, though both enjoy the concurrent powers? If not, then why this rampant practice is not being curtailed. It is further relevant to mention here that Supreme Court too grants and cancels bail. Supreme Court is not permitted by any law to do that as there is no specific provision in the Cr.P.C. which confers powers on the Supreme Court to grant or cancel bail. Supreme Court derives such powers by virtue of Article 142 of Constitution. It is an extra constitutional power conferred upon the Supreme Court to do any act for the sake of justice but the High Court does not enjoy any such powers in matters relating to bail. High Court enjoys only vast powers under writ jurisdiction and 482 Cr.P.C.

High Court is governed by Chapter 23 of Cr.P.C. only in matters relating to bail. It is governed by provisions of statute. In matters relating to bail High Court does not enjoy any vast or inherent powers where it can do anything for the sake of justice. I don’t say that High Court does not have powers to grant bail nor can I dare to say that. Question is when and how can High Court exercise the powers to grant or refuse bail. If the word “and” would have been used in place of the word “or” in Clause 1 of Section 439 Cr.P.C. then position would have been much different. If word ‘and’ would have been used in lieu of ‘or’ then u/S 439 Cr.P.C. both the courts would have powers(not concurrent powers) to grant or refuse bail. Then if the bail application of a person would have been rejected from the Court of Session then definitely he would have got a statutory right to move the bail application in the High Court. But apex court further says that penal provisions are to be interpreted strictly and not leniently as has been held in U. Suvetha v State by Inspector of Police and another (2009(3)ACR 2889(SC))(Para13) and R. Kalyani v Janak C. Mehta and others (2009)1 SCC 516)(Para 36).So, the word “or” cannot be interpreted as word “and”. Moreover, the word “or” can prove to be more beneficial as allowing an incarcerated person to move the bail application in only one of the two courts u/S 439 Cr.P.C. would not only save his time and money but it will also reduce the burden of cases in the courts.

I hope my effort today would prove to be fruitful, open the eyes of readers and will force the legal think tanks to delve into the issue and understand the concepts in a correct way. There are many other topics on which I wish to write. There are many issues which need reconsideration; after all it’s a dynamic field of law.

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Knowledge for Lawyers | A blog about KM in the legal sector.

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Update knowledge, Justice Kapadia tells judges, lawyers, Law News - By

New Delhi: Chief Justice of India-designate Justice S.H. Kapadia on Sunday said that it was incumbent upon judges and lawyers to learn commercial laws to compete in global environment and to lend stability to the recession-hit economy.

Delivering the valedictory address at a two-day national consultation for second generation reforms in legal education here, Justice Kapadia said: "I am reliably told that an impression is being formed that the judges and lawyers in India do not even conceptually have any knowledge of business and commercial laws."

He said knowledge of economic and accountancy laws was a pre-requisite for the stability of the economy hit by recession.

Justice Kapadia pointed to his own yearning for updating knowledge and said: "I live like a hermit and work like a horse."

In his address, the Chief Justice-designate dealt with several issues including judicial activism, role of senior lawyers in legal reforms and the nature of the legal education that should be imparted to budding lawyers.

Expressing concern over the impression about lack of knowledge among lawyers of business and commercial laws, Justice Kapadia said it was detrimental to the interests of advocates.

As a result of this, some of the legal work involving preparation of contracts is getting routed to foreign law firms, he said.

In this context, Justice Kapadia said that interpretation of the production sharing contract was a difficult area and "we are not up to the mark" in it.

In an apparent disapproval of judicial activism, Justice Kapadia said judicial activism and judicial restraint were two inter-linked facets of a court's functioning.

"If judicial activism goes beyond a point, then it is against the principle of judicial restraint," he said.

The Chief Justice-designate chided senior lawyers for their lack of seriousness for deliberation involving judicial reforms or legal education.

"I don't see that kind of dedication among the senior lawyers. Could they have not spared half an hour time? Are they so busy?" he asked.

Addressing law students, Justice Kapadia said there was a difference between intelligence and intellect. He said that what we need in our students is intellect - a probing mind.

He said that "experience and a probing mind is the very basis of intellect and you (students) need to nurture it".

Talking about teachers imparting legal education, Justice Kapadia said: "What we have said about lawyers and judges equally applies to the professors."

He said that professors of law institutions too should brush up their knowledge of the commercial laws.

Presenting the resolution adopted by the two-day meet, Law Minister M. Veerappa Moily said that the legal system was in a state that required major surgery to put it on track.

"We need a major surgery. A mere a dose of medicine would not cure all that is ailing our legal system," Moily said.

The law minister said: "We look forward to the type of dramatic changes (as suggested by the prime minister in his inaugural address on Saturday) under the leadership of Chief Justice-designate Justice S.H. Kapadia."
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