Andhra HC (Pre-Telangana)
A.M. Agencies (In All) vs United Phsophorus Ltd. And Ors. on 25 August, 2000
Equivalent citations: 2000(2)ALD(CRI)610, 2001(1)ALT(CRI)1
ORDER T. Ch. Surya Rao, J.
1. These Revision Cases arise out of the Judgements dated 12.04.1999 passed by the learned II Additional Sessions Judge, Guntur, in Criminal Appeal Nos.82 to 88 of 1998. The Criminal Appeals, in turn, have been preferred against the convictions and the sentences passed by the learned IV Additional Munsif Magistrate, Guntur, in C.C.Nos.15 to 19 of 1995; 89 & 90 of 1995. One set of revision cases have been filed by the complainant in Criminal Revision Case Nos.302, 437 to 442 of 2000 and the other set in Criminal Revision Case Nos.767 to 773 of 1999 have been filed by the accused. Since the parties are same in all these revision cases and common questions of law are involved, all these revision cases can be disposed of together.
2. The factual matrix germane for effective adjudication of the points involved may be stated thus:
The Criminal complaints were filed under Sections 138 and 142 of the Negotiable Instruments Act ('the Act' for brevity) by the complainant-United Phosphorus Limited against the accused M/s A.M.Agencies represented by its Proprietor Vasireddi Ashok Babu. The complainant is the manufacturer of pesticides and the accused is the dealer purchasing the pesticides on credit basis from the complainant company. A regular khata existed between the parties, inter se, and was continued between them. In the course of dealings between the parties, the accused became indebted to the complainant company. The accused company was making payments from time to time towards the khata and issued several cheques for the repayment of the said khata debt. When the cheques issued by the accused company were presented by the complainant company before the Corporation Bank, Guntur Branch, they were dishonoured due to insufficiency of funds. Thereupon, the complainant company issued notice to the accused company through its counsel calling upon the accused company to pay the amounts covered by the cheques. The accused company having received the legal notice, failed to issue any reply nor paid the amounts covered by the cheques. Therefore, the complainant company filed seven complaints against the accused company, as aforesaid, under Section 138 of the Act.
3. The trial Court after conducting the trial convicted the accused and sentenced him to suffer simple imprisonment for one year and to pay different fine amounts equivalent to the amounts covered by the cheques plus an amount of five thousand in all the cases.
4. Having been aggrieved by the convictions and sentences passed against him, the accused filed Criminal Appeals No.82 to 88 of 1998. The appeals, too, ended in dismissal confirming the convictions, of course, modifying the sentences by reducing the sentence of imprisonment from one year to nine months while maintaining the sentence of fine. However, the appellate Court ordered that the modified sentences imposed by it in all the appeals, to run concurrently.
5. Having been aggrieved by the order of the learned II Additional Sessions Judge, Guntur, in directing the sentences to run concurrently imposed in all the criminal cases, the complainant filed seven revision cases. Challenging the conviction and the modified sentences passed by the appellate Court under the impugned judgements the accused company filed the other seven revisions.
Sri C.Padmanabha Reddy, learned senior counsel appearing for the revision petitioners, contends that the sentence of fine imposed by the trial Court and confirmed by the appellate Court is beyond the competence of the Magistrate in view of Section 29(2) of the Criminal Procedure Code ("the Code" for brevity). The learned senior counsel further contends that a civil suit has already been filed for recovery of an amount of Rs.60 lakhs towards the debt due by the complainant-company against the accused-company and the same is pending adjudication and, therefore, imposing a fine equivalent to the amount covered by the cheques, in addition to an mount of Rs.5,000/- and awarding compensation to the extent covered by the cheques is not correct. The learned senior counsel further contends that the direction given by the appellate Court to run all the sentences concurrently is in conformity with Section 427 of the Code.
6. Sri K.Raja Reddy, learned counsel appearing for the complainant-company, on the other hand, contends that the direction given by the appellate Court to run the sentences of imprisonment imposed in all the cases to run concurrently is not correct, particularly when the magnitude of the offence committed by the accused is considered. The learned counsel further contends that the very object of the Section providing for sentence of fine up to double the amount covered by the cheques is to see that the complainant is suitably compensated and, therefore, there is nothing illegal in awarding compensation to the extent of the amount covered by the cheques.
7. In view of the respective contentions, the points that arise for my determination in this batch of revision cases are:
1) Whether a Judicial Magistrate of First Class is competent to impose sentence of fine more than the limit prescribed under Section 29 of the Criminal Procedure Code?
2) Whether the appellate Court is right in directing all the sentences of imprisonment to run concurrently under Section 427 of the Criminal Procedure Code?
3) Whether a Magistrate can grant compensation to the complainant, if so, to what quantum and from out of what amount?
4) How to recover the compensation amount granted under Section 357(3) of the Criminal Procedure Code?
The points germane for adjudication in this batch of revision cases are although short, but gain any amount of significance as they might arise very often for determination by the Courts. Although the conviction of the accused is also assailed in these revision cases that has not been seriously disputed at the time of hearing. Diverse pleas have been taken by the accused before the trial Court while resisting the criminal prosecution and most of them are meant to thwart the criminal prosecution. Khata maintained between the parties is not in dispute as can be seen from both the Judgements. Issuing of the cheques in payment of the debt has been proved. The validity of the legal notice issued calling upon the accused to repay the debt when the cheques were bounced had been questioned, but ultimately it was answered in the positive. Inasmuch as the cheques issued by the accused company in discharge of the existing debt had been bounced ultimately, the criminal cases ended in conviction against the accused company. The appellate Court, too, concurred with the trial Court.
8. As against the concurrent findings of both the Courts below, there is nothing much to assail the conviction of the accused in all the criminal cases. Perhaps, that is the reason why the accused company has not seriously pressed that part of the Judgement pertaining to the finding of guilt in these revision cases.
Turning to the first point, Section 138 of the Act is the relevant provision. The said Section insofar as relevant for the present purpose may be extracted hereunder: -
"Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque or with both..."
A perusal of the above provision shows that a Magistrate can impose the sentence of imprisonment for a term, which may extend to one year or fine, which may extend to twice the amount of the cheque or both. However, the Act has not envisaged any separate procedure to be followed in trying the offences punishable under Section 138 of the Act. But Section 142 of the Act ordains that no court shall take cognisance of any offence punishable under Section 138 of the Act, except upon a complaint in writing made by the payee or as the case may be the holder in due course of the cheque. The Section further shows that no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of First Class shall try any offence punishable under Section 138 of the Act.
According to Section 4(2) of the Code, all offences under any other law, other than the offences under the Penal Code shall be investigated, enquired into, tried and otherwise dealt with according to the provisions of the Code, subject however to the provisions of any enactment regulating the manner or place of investigating, enquiring into, trying, or otherwise dealing with such offences. According to Section 26 of the Code, the offence shall be tried by the High Court or Court of Sessions or any other court shown in the First Schedule in respect of the offences under the Indian Penal Code and in respect of any offence under any other law shall be tried by that court as mentioned in the Act, and if no court is so mentioned, may be tried by the High Court or any other court, shown in the Second schedule. Schedule II appended to the Code deals with classification of offence or offences enumerated in other laws. According to item 3 of the Schedule II, if the offence is punishable with imprisonment for less than 3 years or with fine only, the said offence is non-cognisable, bailable and can be tried by any Magistrate. However, this is subject to Section 141 of the Act. Therefore schedule-II of the Act shall have to be read along with Section 142 of the Act. If both of them are read in conjunction with each other, the offence is non-cognizable, bailable, but triable only by the Judicial Magistrate of First Class or Metropolitan Magistrate. In view of the legal position that the offence under Section 138 of the Act shall be enquired into, tried and otherwise dealt with, according to the provisions of the Code and inasmuch as the punishment provided under Section 138 of the Act is a sentence of imprisonment extending up to one year or with fine or with both, it becomes a summons case and therefore, the procedure to be adopted by the courts is the summons procedure, envisaged by Chapter 20, in Sections 251 to 259 of the Code. Although the penal provisions under the relevant Act enable the Magistrate to impose sentence as is enumerated therein, the powers of the Magistrate in imposing sentence of fine is circumscribed by the code. Section 29 of the Code is germane in this context for consideration.
Sub-section (2) of Section 29 of the Code may be extracted hereunder:
"The Court of a Magistrate of First Class may pass a sentence of imprisonment for a term not exceeding three years, or of fine not exceeding five thousand rupees, or of both."
Sub-section (4) of Section 29 of the Code reads as under:
"The Court of a Chief Metropolitan Magistrate shall have the powers of the Court of a Chief Judicial Magistrate and that of a Metropolitan Magistrate, the powers of the Court of a Magistrate of the First Class."
A mere glance at Section 29(2) of the Code, the provision germane in the context for consideration perhaps leaves no room for any doubt. It shows that the Code circumscribes the power of a Judicial Magistrate of First Class or a Metropolitan Magistrate as the case may be to pass a sentence of imprisonment or sentence of fine notwithstanding the fact that either the Indian Penal Code or Special Law provides for a more sentence. Therefore although Section 138 of the Act enables a Magistrate to impose a sentence of imprisonment extending up to a term of one year or sentence of fine, which may extend to twice the amount of cheque or with both he is not competent to impose the same.
9. It is germane here to consider again sub-section (2) of Section 4 of the Code which ordains that all offences under any other law shall be investigated, enquired into, tried or otherwise dealt with according to the provisions of the Code, but subject to any enactment for the time being in force regulating the manner or place of investigation, enquiry or trial or otherwise dealing with such offences. Section 5 of the Code is a saving clause, which reads as follows:
"Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred or any special form of procedure prescribed, by any other law for the time being in force."
10. A plain reading of these Sections shows that the provisions of the Code will not affect the provisions of special or local law in the absence of any specific provision to the contrary either on account of the restriction enjoined under Section 4(2) or on account of the provisions of Section 5 of the Code. Therefore the power of the Magistrate to impose a sentence of either imprisonment or fine provided in Section 138 of the Act cannot be said to have been affected in any manner by Section 29 (2) of the Code. A Bench of this court in B.MOHAN KRISHNA Vs. UNION OF INDIA1 in para-55 of its judgement held as follows:
"When Section 142 was enacted, the Union Parliament was aware of the fact that the jurisdiction of the Metropolitan Magistrate or Judicial Magistrate of First the First Class was limited to imposing a sentence of imprisonment for a term not exceeding three years and fine not exceeding Rs.5000/-. That is why the Section begins with a non-obstante clause. Further under Section 4(2) of the Code of Criminal Procedure, offences under any law other than the Indian Penal Code, although to be tried in accordance with the provisions of the code, the same shall be " subject to any enactment for the time being in force regulating the manner or place of investigation, enquiring into or otherwise dealing with such offences. Therefore, a Judicial Magistrate of First Class or a Metropolitan Magistrate trying the offence under Section 138 of the Act has power to impose fine not exceeding Rs.5000/-if the fact situation so warrants".
The position therefore, seems to be obvious that the Magistrate can impose a sentence of fine extending to twice the amount of the cheque. However, all this is not germane for consideration in view of the recent judgement of the Apex Court in K.BHASKARAN Vs. SANKARAN VAIDYAN BALAN2. In para 28 the Apex Court held as follows:
"In this context a reference to Section 29(2) of the Code is necessary as it contains a limitation for the Magistrate of First Class in the matter of imposing fine as a sentence or a part of sentence. Section 29(2) reads thus:
"The Court of a Magistrate of the First Class may pass a sentence of imprisonment for a term not exceeding three years or a offence not exceeding five thousand rupees, or both."
In para 29 the Court has categorically held thus:
"The trial in this case was held before a Judicial Magistrate of First Class who could not have imposed a fine exceeding Rs.5000? - besides imprisonment. The High Court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit."
In view of the latest pronouncement of the Apex Court in K.BHASKARAN Vs. SANKARAN VAIDHYAN BALN referred to supra there has been a change in the law.
11. It is no doubt true that the Apex Court has not considered Section 138 of the Act in juxtaposition to Section 29(2) and Section 4(2) of the Code. Nonetheless the Judgment of the Apex Court is binding on all the Courts including this Court under Article 141 of the Constitution of India. In view of this change of law, it cannot but be held that the sentence passed by the trial court in these cases imposing fine equivalent to the cheques amount plus an additional amount of Rs.5,000/- is obviously wrong and is, therefore, liable to be set aside, in as much as it is beyond the competence of the trial court. The appellate Court also in appeal cannot inflict a greater punishment for the offence which in its opinion the accused has committed, than might have been inflicted for that offence by the Court passing the order or sentence, under appeal, in view of the second proviso to clause (c) of Section 386. The judgement of this Court in B.MOHAN KRISHNA AND OTHERS Vs. UNION OF INDIA AND OTHERS referred to supra is no more a good law.
12. Apropos, the question of compensation, Section 357 of the Code is the relevant provision. It is expedient here to consider the said Section in the first instance insofar as it is relevant for the present purpose thus:
"357. Order to pay compensation:- (1) When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment, order the whole or any part of the fine recovered to be applied -
(a) ................................................
(b) in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the Court recoverable by such person in a Civil Court
(c) ..........................................
(d) ..........................................
(2) .............................................
(3) When a court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment, order the accused person to pay, byway of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced.
(4) ....................................
(5) At the time of awarding compensation in any subsequent civil suit relating to the same matter, the Court shall take into account any sum paid or recovered as compensation under this Section.
A perusal of the said provision makes it manifest that the criminal court while imposing a sentence of fine can direct the whole or any part of the fine recovered to be applied towards compensation for any loss or injury caused by the offence to the victim provided the victim is entitled to recover such compensation in a Civil Court against the offender, in the opinion of the Court. If there is no remedy of suit for damages or compensation as the case may be, on a plain reading of clause (b) of sub-Section (1) of Section 357 it is obvious that the Criminal Court cannot order any payment of compensation from out of the fine imposed by it and recovered. This order of the Criminal Court in directing payment of compensation thereafter to be taken into account by the Civil Court at the time when it is awarding compensation in the suit filed by the victim against the offender. In view of sub-Section (2) of Section 29 of the Code the power to impose a sentence of fine is circumscribed and limited to the extent of Rs.5000/- alone. Therefore the Criminal Court can grant compensation only to the maximum extent of Rs.5000/-. However, sub-section (3) envisages a different situation. According to this provision, if the Court imposes a sentence of which fine does not form part, then the power of the Court in ordering the accused to pay the compensation is not subjected to the limitation envisaged by sub-section (2) of Section 29 of the Code or sub-section (1) of Section 357 of the Code. Sub-section (3) of Section 357, in other words, contemplates payment of compensation to any extent, which is reasonable in the view of the Court but the Court can do so, in my considered view, only when it has not imposed the sentence of fine. That means, when the Court imposes only sentence of imprisonment, but not sentence of fine, then it can invoke sub-section (3) of Section 357 of the Code. Once it imposes both the sentence of imprisonment and fine or imposes only the sentence of fine, without there being any sentence of imprisonment, in my considered view, sub-section (3) of Section 357 of the Code cannot be invoked.
13. On a perusal of Section 357 of the Code, the scheme as envisaged by the said Section is depending upon three conditions, namely, (1) that in the first instance the compensation shall be recoverable in the opinion of the Court from the offender in Civil Court, (2) that the Court shall impose a sentence of fine so that it may order the whole or any part of the fine recovered towards expenses or compensation, and (3) that when the Court has not imposed any sentence of fine, the Court may order the payment of compensation, such amount which is reasonable in its view, notwithstanding the limit provided under sub-section (2) of Section 29 of the Code.
14. It is apposite here to consider Section 117 of the Act, insofar as it is relevant, which reads thus:
"Section 117. Rules as to compensation: - Compensation payable in case of dishonour of a promissory note, bill of exchange or cheque, by any party liable to the holder or any endorsee, shall be determined by the following rules: -
(a) the holder is entitled to the amount due upon the instrument, together with the expenses properly incurred in presenting, noting and protesting it
(b) .....................................
(c) an indorser, who being liable, has paid the amount due on the same is entitled to the amount so paid with interest at 18 per centum per annum from the date of payment until tender or realisation thereof, together with all expenses caused by the dishonour and payment;
(d) ...................................
(e) the party entitled to compensation may draw a bill upon the party liable to compensate him, payable at sight or on demand, for the amount due to him, together with all expenses properly incurred by him. Such bill must be accompanied by the instrument dishonoured and protest thereof (if any). If such bill is dishonoured, the party dishonouring the same is liable to make compensation thereof in the same manner as in the case of original bill.
Section 117 of the Act, therefore, envisages the payment of compensation in the event of dishonour of any promissory note, bill of exchange or cheque and the said Section further provides for Rules for such payment of the compensation and payment. It is therefore, obvious that under Section 117 of the Act, a party is entitled to compensation against the promissor in the event of dishonour of the cheque issued by him either for insufficiency of funds or no funds in his account with the Bank on which the cheque has been drawn earlier. It may be mentioned here that this remedy of compensation is in addition to the common law remedy for recovery of the amount covered by the negotiable instrument.
15. Turning to Section 357 of the Code, the Criminal Court can while passing judgement, order the whole or any part of fine recovered to be applied as compensation in the event of any dishonour of a cheque, as compensation is recoverable from the offender in a Civil Court in view of the Section 117 of the Act. Now, as discussed supra, the compensation can be ordered to be paid when the Court imposes a sentence of fine and is recovered, in which case the limit obviously up to an amount of Rs.5,000/-. This compensation can also be ordered to be paid to any amount, which is reasonable in the view of the Court only when the Court has not imposed a sentence of fine. In other words, if the Court is inclined to order payment of compensation exceeding the limit engrafted under sub-section (2) of Section 29 of the Code it shall not impose a sentence of fine. Therefore, an anomalous situation arises in cases where the Court has not imposed any sentence of fine for recovery of the amount of compensation ordered to be paid.
16. Coming to the point of recovery of the compensation amount so ordered by the Criminal Court it is apposite here to consider Section 421 of the Code. Coming in the realm of Chapter XXXII of the Code, Section 421 envisages an action for recovery of the fine mount imposed. Section 421 of the Code reads as under:
"421 Warrant of levy of fine:- (1) When an offender has been sentenced to pay a fine, the Court passing the sentence may take action for the recovery of the fine, in either or both of the following ways, that is to say, it may-
(a) issue a warrant of levy of the amount by attachment and sale of any movable property belonging to the offender;
(b) issue a warrant to the Collector of the District, authorising him to realise the amount as arrears of land revenue from the movable or immovable property, or both, of the defaulter;
Provided that, if the sentence directs that in default or payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no Court shall issue such warrant unless, for special reason to be recorded in writing, it considers it necessary so to do, or unless it has made an order for the payment of expenses or compensation out of the fine under Section 357.
(2) where the Court issues a warrant to the Collector under clause (b) of sub-Section (1) the Collector shall realise the amount in accordance with the law relating to recovery of arrears of land revenue, as if such warrant were a certificate issued under such law"
(emphasis is mine)
17. It is obvious on a mere glance at the Section that the Section envisages two modes of recovery of the fine when the offender has been sentenced to pay a fine with or without any default sentence. If for any reason, by invoking sub-section (3) of Section 357 of the Code the Court orders payment of compensation, the difficulty in ordinary course arises as to the recovery of the said amount. On a prima facie consideration of Section 421 of the code it cannot be invoked in the absence of any sentence of fine imposed by the Court. There arises therefore an anomalous situation, for realisation of the compensation ordered to be paid by invoking sub-section (3) of Section 357 of the Code. But, then it is not an insurmountable contingency. The beneficial provision under Section 357 has been incorporated into the Code with an avowed object of alleviating the misery of the victim who suffered the injury or damage at the hands of the perpetrator of the crime against him. The compensation that will be granted by the Criminal court, under Section 357 of the Code is certainly in addition to the common law remedy available to the victim to claim compensation or damages, as the case may be, from the offender by instituting a properly constituted suit before appropriate forum. But, that remedy necessarily occupies some time for realisation of the compensation ultimately in the event of any decree passed in favour of the victim. Therefore, it cannot cater to the immediate need of the victim to the necessary succour or relief. But on an intrinsic examination with a holistic view of all the provisions relevant, as has been discussed supra, in my considered view, there is no point in saying that either of the modes envisaged by Section 421 of the Code cannot be invoked when the Criminal court directed payment of compensation without imposing a sentence of fine under sub-section (3) off the code. Otherwise, the very purpose would be lost and sub- section (3) of Section 357 of the Code becomes otiose.
18. The Apex court in BHASKARAN VS. SANKARAN VAIDYAN BALAN (Supra) in para 30 and 31 of its judgment held as follows:
" 30. It is true, if a judicial magistrate of first class were to order compensation to be paid to the complainant from out of the fine realised the complainant will be the loser when the cheques amount exceeded the said limit. In such a case a complaint would get only the maximum amount of Rupees five thousand;
31. However, the Magistrate, in such cases can alleviate the grievance of the complainant by making resort to Section 357(3) of the Code. It is well to remember that this court has emphasized the need for making liberal use of that provision (Hari Singh v. Sukhbir Singh, . No limit is mentioned in the sub-Section and therefore, a magistrate in the sub Section and therefore, a magistrate can award any sum as compensation. Of course, while fixing the quantum of such compensation the Magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus, even if the trial was before a court of magistrate of first class in respect of a cheques which covers an amount exceeding Rs.5000/- the Court has power to award compensation to be paid to the complainant."
19. The Apex Court in HARI KISHAN & STATE OF HARYANA VS. SUKHBIR SINGH3 held in paras 10 and 11 of its Judgment as follows:
"It is an important provision but courts have seldom invoked it. Perhaps due to ignorance of the object of it. It empowers the court to award compensation to victims while passing judgment of conviction. In addition to conviction, the court may order the accused to pay some amount by way of compensation to victim who has suffered by the action of the accused. It may be noted that this power of courts to award compensation is not ancillary to other sentences but it is in addition thereto. This power was intended to do something to reassure the victim that he or she is not forgotten in the criminal justice system. It is a measure of responding appropriately to crime as well of reconciling the victim with the offender. It is, to some extent, a constructive approach to crimes. It is indeed a step forward in our criminal justice system. We, therefore, recommend to all courts to exercise this power liberally so as to meet the ends of justice in a better way.
The payment by way of compensation must, however, be reasonable. What is reasonable may depend upon the facts and circumstances each case. The quantum of compensation maybe determined by taking into account the nature of crime, the justness of claim by the victim and the ability of accused to pay".
20. The Apex court in the said judgment has not considered the distinction between sub-sections (1) and (3) of Section 357 of the Code. At any rate, the judgment cannot be read to conclude that sub-section (3) can be invoked even in cases where the sentence of fine is imposed by the court. Similarly, the latest judgment of the Apex court in Bhaskaran's case (supra). Therefore, in my considered view, it is difficult to discern from both the judgments that compensation granted by invoking sub-section (3) of Section 357 of the Code can also be directed to be recovered as in the other case where compensation is granted under Section 357(1) of the Code and is recoverable from out of the fine amount. Sub-section (1) of Section 357 of the Code envisages the application of the amount recovered towards the fine for defraying the expenses properly incurred in the prosecution and for paying compensation for any loss or injury caused by the offences. On a plain reading of the above provision tells that in the event of the sentence of fine imposed and is recovered in accordance with the provisions contained in the code elsewhere for such recovery that recovered amount shall be applied in defraying the expenses and in payment of compensation. If no sentence of fine is imposed by the court for any reason and the court passes the judgment directing the offender to pay compensation as is envisaged under sub-section (3) of Section 357 of the code, there is no provision in the code for recovery of that amount. Section 421 of the code can be invoked only in the event of sentence of fine is imposed on the offender. The compensation awarded to the victim can also be directed to be paid when that amount imposed by means of fine is recovered, from out of it. On a plain reading of sub- sections (1) and (3) of Section 357 and Section 421 of the Code it is obvious. However the object behind the Section 357 of the Code and the intention of the parliament shall have to be considered before coming to a conclusion. Section 357 of the code is a beneficial provision meant to alleviate the misery and sufferance of the victim of a crime. Such a benefit cannot be restricted by construing these provisions in a narrow and parochialistic manner to say that the compensation can be recovered only when there is a sentence of fine imposed by the court but not otherwise. Such an attempt may tantamount to classifying the victims into two different classes namely the victims who are entitled to compensation only when the sentence of fine is imposed on the offender and is recovered in accordance with the provisions of Section 421 of the Code and the victims who are entitled to compensation without any limit, granted by the court invoking sub-section (3) of Section 357 of the Code and without imposing any sentence of fine. Therefore, Sections 357 and 421 are to be construed harmoniously so as to extend the benefit envisaged under Section 357 of the code to all the victims, notwithstanding the fact that sentence of fine has been imposed upon conviction on the offender or no sentence of fine is imposed but compensation has been granted reasonably, exceeding the limits of fine prescribed by the concerned penal provisions. Such a construction, in my considered view, is a purposive construction so as to avoid the mischief and the eventual damage being caused to the second category of victims when the court has not imposed any sentence of fine upon the offenders but only directed them to pay compensation. The defect on account of the lack of specific provision for realization of the compensation amount when no sentence of fine is imposed shall have to be remedied by resorting to the purposive construction and by invoking the Heydon's Rule. I am fortified in my above view by the judgment of the Apex court in BENGAL IMMUNITY CO.LTD. VS. STATE OF BIHAR4. In another case in BHAGIRATHI VS. DELHI ADMINISTRATION5, the Apex Court had to consider the beneficial provision under Section 428 of the Code where the benefit of the pre-trial detention shall be given to the offender from out of the term of imprisonment imposed upon him on conviction. The problem had arisen as to whether such a benefit can be given where the offender was sentenced to suffer imprisonment for life. Section 428 of the Code, on its plain reading, envisages that the benefit of set off shall be given when the accused is convicted and sentenced to suffer imprisonment for a term. What happens when the offender is sentenced to suffer imprisonment for life is conspicuously absent from the said Section. The Apex Court held, in such circumstances, thus:-
"To deny the benefit of Section 428 to them (though sentenced to life imprisonment) is to withdraw the application of a benevolent provision from large majority of cases in which such benefit would be needed and justified".
Therefore, sub-section (1) and (3) of Section 357 and Section 421 of the Code shall have to be so construed and the benefit of realization of the amount from the offender as is envisaged by Section 421 of the Code can be extended to the cases where no sentence of fine is imposed by the Court upon the offender but compensation is awarded to the victim under sub-section (3) of Section 357 of the Code.
21. For the foregoing reasons, the Criminal court can certainly invoke Section 421 of the Code not only in cases where the compensation is ordered and is directed to be recovered from out of the fine amount imposed by the Court in accordance with Section 357(1) of the code, but also in cases where no sentence of fine has been imposed, but, compensation has been ordered to be paid invoking Section 357 (3) of the Code.
22. In view of the arguments addressed that if no compensation is directed to be paid in criminal proceedings initiated under Section 138 of the Act, the very object of providing a sentence of fine double the extent of the amount covered by the cheque dishonoured would be frustrated, and that the Legislature has clearly intended the payment of compensation from out of the fine to be imposed under Section 138 of the Act, it is apt here to consider the objects and reasons given under "The Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act 66 of 1988". Under this Act, Chapter XVII has been incorporated into the Negotiable Instruments Act, 1881, comprising Sections 138 to 142. Clause (xi) of the objectives enumerated therein may be extracted hereunder for better understanding of the matter:
" (xi) to enhance the acceptability of the cheques in settlement of liabilities by making a drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds in the accounts or for the reason that it exceeds the arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers".
23. A perusal of the above clause shows that the penal consequences have been envisaged as a deterrence so as to enhance the acceptability of the cheques issued in settlement of liabilities and to prevent the harassment of honest drawers. It is not discernable from this provision that the sentence of fine provided for under Section 138 of the Act to the extent of double the amount covered by the cheques is with an intention to see that the drawer is paid the amount covered by the cheques by means of compensation from out of the fine amount contemplated by the Section so as to settle the disputes in between the parties inter se. On the other hand, two objectives are discernable from the said provision, as discussed supra, in my considered view, namely 1) to enhance the acceptability of the cheques issued in settlement of the liabilities; and 2) to prevent the harassment of honest drawer. There is no room for the contention that the expression "settlement of liabilities" means that the settlement by means of paying compensation to the victim-drawee. Even otherwise it could not be so due to the existing provision in Section 117 of the Act. Section 117 of the Act envisages rules to be followed for payment of compensation, although the said Section does not in so many words fixed the liability to pay companion. When Rules are prescribed for payment of compensation, it goes without saying that the victim is entitled to compensation. In U.P. UNION BANK VS. DINA NATH RAJA RAM6 the Allahabad High Court held in para 39 of its judgment that Section 117 of the Act does not purport to lay down which party is liable to pay compensation to whom and liability to make payment is determined by other Sections of the Act. Indubitably, that there has been liability to pay compensation and Section 117 of the Act envisages the Rules for determination of the payment of compensation.
Be that as it, may, in view of the fact that the Act envisages payment of compensation and prescribes Rules for such compensation, it cannot now be heard to say that the intention of the Parliament in incorporating the words "for settlement of liabilities between the parties, inter se" is to see that compensation is ordered to be paid to the extent of the amount covered by the cheque dishonoured from out of the fine amount. Such an argument is fallacious and far fetched inasmuch as given the common law remedy for recovery of the amount covered by the cheque dishonoured and the remedy clearly envisaged by Section 117 of the Act, criminal Courts cannot be converted as a media for obtaining a relief expected to be got in ordinary course from the civil Courts.
Although Section 117 of the Act envisages payment of compensation in the event of dishonour of promissory note, bill of exchange, and cheque, Section 138 is confined only to the dishonour of cheques as on account of the same banking business is being affected. Beyond that, I am not able to see any other reason for providing compensation only in case of dishonour of cheques but not in respect of the other negotiable instruments covered by Section 117 of the Act. Compensation is being ordered by the Criminal Courts only by invoking Section 357 of the Code, which applies equally to all criminal cases and other cases under the special enactment or other laws. It is very difficult to discern either from the objects and reasons or in the context in which Sections 138 to 142 came to be incorporated into the Act that the Criminal courts should invariably grant compensation in all cases where cheques are dishonoured and criminal prosecution is launched by the victims. Perhaps, the criminal courts are often resorting to the provisions under Section 357 only to alleviate the misery of the holder or endorser of the cheques. Such an argument therefore cannot be countenanced.
As regards point No.3, Section 427 of the Code is the relevant provision under which the Court can direct the sentences passed against the offender in various cases to run concurrently. Sub-section (1) of Section 427 of the Code reads thus:
" 427. Sentence on offender already sentenced for another offence;- (1) When a person already undergoing a sentence of imprisonment is sentenced on a subsequent conviction to imprisonment or imprisonment for life such imprisonment or imprisonment for life shall commence at the expiration of the imprisonment to which he has been previously sentenced, unless the court directs that the subsequent sentence shall run concurrently with such previous sentence".
24. Reading the said provision in its plain sense, Sri Raja Reddy, learned counsel for the complainant-company, contends that the courts shall direct imprisonment to be commenced in a subsequent conviction in ordinary course at the expiration of imprisonment, which has been previously inflicted and that directing both the sentences to run concurrently is, therefore, an exception. The learned counsel further contends that having regarding to the gravity of the offence where nearly an amount of Rs.42 lakhs is involved, it is not proper to direct all the sentences to run concurrently.
25. The Apex Court in MOHD. AKTHAR ALIAS IBRHIM AHMED BHATTI VS. ASSISTNT COLLECTOR OF CUSTOMS (PREVENTION), AHMEDABAD AND OTHERS7 has considered this aspect as to when the court should direct the sentences to run concurrently or to run consecutively. It is apposite here to extract the relevant para 10 of its judgment thus:
"The basic rule of thumb over the years has been the so-called single transaction rule for concurrent sentences. If a given transaction constitutes two offences under two enactments generally, it is wrong to have consecutive sentences. It is proper and legitimate to have concurrent sentences. But this rule has no application if the transaction relating to offences is not the same or the facts constituting the two offences are quite different."
A Bench of this court relying upon the judgment of the Apex court referred to supra in AMARNATH UMAKANTH VS. STATE OF ANDHRA PRADESH8 held that the High Court has inherent power to direct subsequent sentences to run concurrently to the earlier sentences. However, the court shall take into account the totality of the facts of each case and also the totality of the sentences, which the accused has to undergo when the sentences are to run consecutively.
26. As can be seen from the factual matrix extracted above, all these cases arise out of a single transaction namely, the katha account between the complainant-company and the accused-company. This being a running katha account, various entries have been made and in discharge of the debt covered by those entries it is said that the different cheques have been issued. It is obvious, therefore, that all these cases emanate from a single transaction. Under such circumstances, the rule of thumb enunciated by the Apex court in the above judgment shall be applied. As many as seven complaints have been filed by the complaint-company against the accused -company. The accused has been convicted in all the cases and has been sentenced to suffer rigorous imprisonment for one year in each case. However, the Appellate Court reduced the sentence of imprisonment to nine months from one year. If all the sentences in seven cases were to run consecutively, the accused must serve five years and three months. I think it is quite unreasonable. Further in view of the authoritative pronouncement of the Apex Court and as the facts in this case disclose that it is a single transaction of katha account, the provisions under Section 427 of the code shall have to be invoked and for the said reason, I see no illegality or any irregularity committed by the Appellate Court in directing the sentences to run concurrently. For the foregoing reasons, the contention of Sri Raja Reddy, learned counsel for the complaint-company merits no consideration.
27. In view of the above conclusion, the sentence of fine inflicted in all the cases to the extent of the amount covered by the cheques plus Rs.5,000/- is quite unsustainable under law and is, therefore, liable to be set aside. In sequel thereto, the other order for payment of compensation for the amount equivalent to the amount covered by the cheques should also be set aside. In all these cases the sentences of imprisonment as inflicted by the trial court and as modified by the appellate court cannot be interfered with.
28. This then takes me to the other question as to whether any sentence of fine can be imposed, any compensation can be ordered and if so, to what amount in all these cases.
29. The Apex Court in Bhaskaran's case (supra) in para 22 held as follows;
"The question of sentence and award of compensation must be considered by the trial court. We deem it feasible that the magistrate shall hear the prosecution and the accused on those aspects. Of course, if the complainant and accused settle their disputes regarding these cheques, in the meanwhile, that fact can be certainly be taken into consideration in determining the extent or quantum of sentence."
30. It is therefore, expedient to leave the things to be considered by the trial court afresh on the question of sentence of fine and on the question of payment of compensation. Under the circumstances, this court has no option except to remit these matters to the trial court for fresh consideration while upholding the conviction of the accused under Section 138 of the Act and sentence of imprisonment as passed by the trial court and as modified by the appellate court later, leaving its consideration only to the question of sentence of fine to be passed, if any, and order of payment of compensation to be granted, if any. The court below should hear the parties afresh on those aspects by affording necessary opportunity and proceed to dispose of the same in the light of the observations made by this court supra in the judgment.
31. For the foregoing reasons, Criminal Revision Cases 767 to 773 of 2000 filed by the accused questioning the quantum of sentence of fine imposed by the trial court and confirmed by the appellate Court are allowed and Criminal Revision Cases 302,437 to 442 of 1999 filed by the complainant questioning the direction of the appellate Court making the sentences of imprisonment imposed in all the cases to run concurrently are hereby dismissed. The cases are remitted back to the trial court for fresh consideration in the light of the observations made in the judgment supra.