Karnataka High Court
Case BriefsHigh Courts

Karnataka High Court (Dharwad Bench): Suraj Govindaraj, J. while deciding a matter regarding handcuffing of an accused during arrest, held that “handcuffing should be by way of last resort and such handcuffing should mainly be only for the reason of whether there is a possibility of the accused and/or under trial prisoner escaping custody, causing harm to himself or causing harm to others.

Some disputes had arisen between a law student studying in Shikshan Prasrak Mandals Law College at Raibag (‘the petitioner’) and Babu Annappa regarding a mortgage deed executed in respect of agricultural lands belonging to the petitioner. Due to this, five criminal cases were filed against the petitioner for offences under Section 138 of the Negotiable Instruments Act, 1881 on account of dishonour of cheques issued in pursuance of the said mortgage. Pursuant to this, the petitioner was arrested by the Respondent 3- Police Sub-Inspector, Ankali Police Station after a non-bailable warrant was issued Thereafter, he was allegedly paraded with handcuffs in Ankali Town and later on was taken in a bus in handcuffs from Ankali to Chikodi Police Station, without being produced before the Court.

Later on, the petitioner’s bail application was rejected, and he was remanded to judicial custody. He appealed the order of conviction which was thereby stayed The petitioner alleged that despite the conviction being stayed, he was repeatedly harassed by the police as they would illegally arrest or detain him, visit his house, and threaten him. Thus, the petitioner filed the present writ petition seeking relief in nature of compensation under Articles 226 and 227 of Constitution of India, for the damage caused to his life and reputation due to illegal detention and illegal handcuffing even prior to the petitioner being proven guilty.

Issues framed by the Court:

1. Whether the accused who is arrested can be handcuffed? If so, under what circumstances?

2. If there is any violation by the Arresting Officer, would the accused be eligible for compensation?

3. On what basis is the compensation required to be determined and paid?

4. Whether the accused suffered damage to his life and reputation or not? If yes, then what amount of compensation should be awarded?

Relevant Statutory Provisions regarding Arrest and Handcuffing

A perusal of Section 46 of the Code of Criminal Procedure, 1973 ‘CrPC’ indicates that a person can be arrested by touching or confining the body of the person to be arrested, unless there is a submission to custody by word or action. It is only when there is a resistance to the arrest or evasion of arrest that the Police Officer may use all means necessary to effect the arrest.

Section 49 CrPC indicates that a person arrested shall not be subjected to more restraint than is necessary to prevent his escape. Therefore, it is the requirement of law that the restraint has to be reasonable and only to the extent that the person does not escape from custody.

Section 220 of Penal Code, 1860 ‘IPC’ indicates that if a person who has legal authority to confine a person, confines such a person contrary to law, he shall be punishable with imprisonment, which may extend to seven years or with fine or with both.

Sections 831, 832, 833, 834 and 835 of the Karnataka Police Manual provide for instructions for using handcuffs. A perusal of the said provisions would indicate that the prisoner should not be normally handcuffed, unless he is violent or disorderly or circumstances necessitate such handcuffing. In the event of an accused is handcuffed, the facts and reasons for it is required to be recorded in the Station House Dairy.

Analysis and Findings:

Reliance was placed on Prem Shankar Shukla v. Delhi Administration, (1980) 3 SCC 526 and Antonio Sebastiao Mervyn Degbertde Piedade Pacheco v. State of Goa 2008 (6) AIR Bom R 585 and observed that normally during arrest an accused cannot be handcuffed. Only under extreme or exceptional circumstances, such as violent tendencies or the possibility of escape, can an accused be handcuffed. Furthermore, there are some requirements to be fulfilled by the authorities in such a case:

  • When an accused is handcuffed, the Arresting Officer is required to record the reasons for handcuffing, which would have to sustain the scrutiny of the Court.

  • Whenever an accused is produced before the Court of law, it would be required of the Court to enquire if the accused had been handcuffed or not and if handcuffed, to ascertain the reasons recorded by the Arresting Officer on the justifiability on the same.

Thus, the court held that “handcuffing should be by way of last resort and such handcuffing should mainly be only for the reason of whether there is a possibility of the accused and/or under trial prisoner escaping custody, causing harm to himself or causing harm to others. The nature of offences and the punishment prescribed for the said offence are not relevant for the matter of handcuffing.

Dealing with the issue regarding compensation, reliance was placed on D.K. Basu v. State of West Bengal (1997) 1 SCC 416 and Nilabati Behera v. State of Orissa (1993) 2 SCC 746 and observed that “if there is a violation by the Arresting officer in putting handcuffs on the petitioner, the petitioner would be eligible for compensation”. Thus, in the present case, the State is responsible for compensating the petitioner and the amount of damage is to be calculated on the basis of any evidence and documents produced by the petitioner.

Regarding the third issue, the court held that there are a few considerations that have to be made while awarding the compensation, these considerations are as follows:

  • The court should take into consideration the loss/damage that might have been caused to the person who has been handcuffed.

  • The court should also consider the imposition of compensation as a deterrent to the Police Officers who do not discharge their duties in a proper manner and/or violate the applicable law. Additionally, although the State would be required to pay the compensation, the State would be at liberty to recover the same from the concerned defaulter(s).

Thus, the court observed that “Compensation which is required to be paid as aforesaid being a Public Law Remedy, there cannot be a straitjacket formula which could determine the amount of compensation that has to be paid. Be that as it may. The compensation which is required to be paid is by applying the principles of strict liability.

Lastly, the court held that the evidence provided by the petitioner does not sufficiently prove that the petitioner was paraded in handcuffs and his reputation has been as immensely damaged as he claims. Thus, for the procedural irregularity of handcuffing, the petitioner was awarded Rs. 2 lakhs as compensation as opposed to Rs 25 lakhs which was originally demanded.

[Suprit Ishwar Divate v. State of Karnataka, 2022 SCC OnLine Kar 1133 decided on 10-06-2022]


Advocates who appeared in this case :

Santosh P. Pujari, Advocate, for the Petitioner;

Praveen K. Uppar, Advocate, for the Respondent.

Case BriefsDistrict Court

Tis Hazari Court, Delhi: While deciding the instant complaint filed under S. 138 of Negotiable Instruments Act, 1881, wherein the dispute revolved around the non-compliance of the clauses of Non-Competing Agreement (NCA) executed between the parties to the dispute; the accused company was acquitted from the charges levied under S. 138. Presiding over the matter, Devanshu Sajlan, D.J.S., while making detailed observations concerning S. 138 of NI Act and S. 27 of Contact Act and, held that the accused company has successfully raised a probable defence in its favour and the complainant has failed to prove his case beyond reasonable doubt.

Facts of the Case: The accused company  and complainant  had signed into a Non-Competing Agreement (NCA) stating that a compensation of Rs. 3,80,00,000 was required to be paid in 120 equal installments of Rs. 3, 16, 666 each to the complainant  for agreeing to resign from the accused company under clause 4.1 of the NCA. In partial discharge of the aforesaid liability, the accused company issued the cheque(s) in question thus giving the complainant the right to proceed under section 138 of the NI Act in the event of dishonour of the said cheques.

The parties  also signed a share purchase agreement (SPA) in violation of which both parties invoked arbitral proceedings, which they settled with a consent award which stated the requirement of furnishing fresh bank guarantee which would be considered valid till the payment of the last instalment. As a security for payment of monthly installments, cheques were given.

The case revolved around the non-compliance of the clauses of NCA due to which the accused  is not obligated to make any payment and possess no legal liability towards the complainant. The case also concerns with the arbitral award give liberty to the complainant in order to explore its legal remedies under the NCA. It is filed to pursue the remedies given under NCA.

The complainant further alleged that the present cheque(s) which were given to the complainant towards payment of the installment of the compensation contemplated under NCA, were returned dishonoured with remarks ‘Funds insufficient’. Thereafter, the complainant sent a legal demand notice to the accused persons, but the accused persons allegedly failed to pay the cheque amount and therefore, thus complainant was compelled to file the present complaint.

Issues:

  1. Whether the accused had committed breach of consent award by not paying the cheque amount as agreed upon in the NCA?
  2. Whether the liability has arisen if the requirements under S. 138 of NI Act are not met with?
  3. Whether a post-dated cheque is for “discharge of debt or liability” U/S 138 of NI Act depends on the nature of the transaction?
  4. Whether a mutually settled arbitral award demarcates the liability of payment signed under NCA?

Submissions: The submissions of the accused were centred around the second ingredient of S. 138 of NI Act i.e. “The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability”.

 

It was submitted that the cheque(s) were given as advance payment towards the monthly instalment amount pertaining to the total compensation under the non-compete agreement. The said cheque(s) were not issued in discharge of any existing/ subsisting debt.

Accused contended that payments were made regularly to the complainant until the breach of terms of contract came to their notice. It was submitted that the accused had no liability to pay non-competing fees to the complainant  as he  failed to  comply with statutory obligations.

It was further argued by the accused that since the complainant is being aptly compensated for not practicing the competing business, hence it cannot be said that NCA is in restraint of trade and is in violation of S.27 of Contract Act, 1872. It was also submitted that cheque(s) were suspended as advance payment constituting to total compensation procured under NCA.

 

Meanwhile, the complainant submitted that there can be no challenge for the validity of the NCA since the arbitral consent award under NCA is legally enforceable.  It was also submitted to the court that since the legal liability of giving payment liquidates due to non-performance of NCA, it does not matter if the issued cheque was dated for advance payment of a liability debt.

Observations – Upon perusal of the contentions, the Court made the following salient observations:

  • The liability had crystallised/ matured when the cheque(s) in question were presented. The monthly liability to pay non-compete fee arose in the present matter upon performing of non-competing service by the complainant for the said month. Thus, the cheque(s) in question cannot be held to be not for a subsisting liability.
  • It was further observed that the NCA clearly stipulated that in case the consent award is breached, the complainant can file a complaint under S. 138 of NI Act. It was noted that there was not even a shred of evidence available on record to support the assertion of the accused no. 2 that complainant breached the terms of the NCA. Therefore, the burden of proof placed upon the accused persons have not been discharged as regards the contention of breach of NCA.
  • The Court also referred to Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, which held that the crucial test for applicability of S. 138 of NI Act is that such liability should have arisen on the date mentioned on the post-date cheque or the date when the cheque is handed over in order for it to constitute as an offence under S. 138 of NI Act.
  • The Court made detailed observations regarding the NCA being voidable in light of S. 27 of the Indian Contract Act. It was stated that the NCA in the present case is a simplicitor contract of restraint of trade by which the complainant has been refrained from involving in a trade of similar domain for a period of 10 years after he files his resignation. The Court pointed out that this case does not fall within the ambit of the exception of sale of goodwill of business. The NCA or the connected SPA between the same parties nowhere mentions that the complainant is transferring goodwill of the business of the accused company to the new management. Thus, such non-compete agreements such as the NCA in question, squarely falls within the mischief prohibited under S. 27 of Indian Contract Act, 1872. Thus, the instant NCA is void agreement under S. 27. It was observed that the right against restraint of trade cannot be waived off by the conduct of the parties. The court cannot enforce a void contract based on the waiver of the respective parties, especially in a case when a clause is based on the public policy of India.

 

Decision: It was held that since the NCA is void pursuant to S. 27 of the Indian Contract Act, the cheque(s) in question given to discharge the liability under the NCA cannot be held to be issued in discharge of a legally enforceable liability. In the present case, since the complainant’s promise (to not do competing business) is unlawful, there is no legal reciprocal consideration to make the NCA a valid binding contract. Regarding the validity of NCA vis-a-vis the arbitral consent award, the Court held that while it is correct that the arbitral consent award was passed to settle the disputes under the NCA and SPA, there is no specific undertaking that the cheques in question, which were issued prior to the arbitral award, will be used to secure the consent arbitral award. “It would have been a different case if the cheques in question would have been issued pursuant to the arbitral award since the same would then have been considered to have been issued to enforce the consent award (which is akin to a consent decree), and hence enforceable”. [Anil Thakur v. Blazeflash Courier Ltd., 2022 SCC OnLine Dis Crt (Del) 23, decided on 31-05-2022]

Counsel for Complainant: S.K. Gupta

                                          Vikas Gupta

Counsel for Accused: S N Gupta

                                    Sanjay Goel


*Sucheta Sarkar, Editorial Assistant has reported this brief.