Punjab-Haryana High Court
Gaurav Khullar vs Eleven V Industries & Ors on 28 February, 2023
Author: Jasjit Singh Bedi
Bench: Jasjit Singh Bedi
Neutral Citation No:=2023:PHHC:036155
CRR-1631-2016 (O & M) ::1::
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CRR-1631-2016 (O & M)
Date of decision: 28.02.2023
Gaurav Khullar ...... Revisionist/complainant
V/s
Eleven V Industries and ors. ...Respondents
CORAM: HON'BLE MR. JUSTICE JASJIT SINGH BEDI
Present: Mr. Viren Jain, Advocate,
for the revisionist-complainant.
Mr. Rajesh Dhiman, Legal Aid Counsel
for the respondents.
*****
JASJIT SINGH BEDI, J. (Oral)
The prayer in the present revision petition under Section
397/401 read with Section 357(4) Cr.P.C. is for setting aside the order dated
20.01.2016 passed by the Court of the Additional Sessions Judge, Ludhiana
in Criminal Appeal No.124 of 15.12.2014 and registration No.CRA-1033-
2014 titled as 'Gaurav Khullar versus M/s Eleven V Industries and Ors.'
whereby the appeal filed by the revisionist/complainant against the omission
to grant of compensation under Section 357(1)(b) Cr.P.C. by the Magistrate
while passing the order of conviction and sentence dated 22.09.2014 in a
complaint under Section 138 of the Negotiable Instruments Act and for
enhancement of substantive sentence awarded by the Magistrate has been
dismissed and no amount of compensation has been granted to the
revisionist/complainant after the judgment of conviction and order of
sentence had been upheld by the Additional Sessions Judge, Ludhiana.
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2. The brief facts of the case are that the revisionist/complainant
(hereinafter known as 'the petitioner') had instituted a criminal complaint
under Section 138 of the Negotiable Instruments Act against the
respondents/convicts (hereinafter known as 'the respondents') on account of
the dishonour of a cheque bearing No.577096 dated 25.08.2011 for an
amount of Rs.7,75,000/-. A copy of the complaint is attached as Annexure
P-1 to the present petition.
2. After the completion of the Trial, the Trial Court convicted the
respondents vide judgment of conviction dated 22.09.2014 and sentenced
them to undergo rigorous imprisonment for 06 months alongwith a fine of
Rs.1,000/- each, in default of which, they were to undergo simple
imprisonment for one month. However, at the time of convicting and
sentencing, no compensation was awarded to the petitioner in terms of
Section 357 Cr.P.C. A copy of the judgment of conviction and order of
sentence dated 22.09.2014 passed by the Trial Court is attached as Annexure
P-2.
3. Against the non-grant of compensation to the petitioner by the
Trial Court under Section 357 Cr.P.C. as also the inadequacy of the
substantive sentence of 06 months imprisonment, an appeal was preferred by
him under the proviso to Section 372 Cr.P.C. challenging the non-grant of
compensation and for enhancement of sentence. A copy of the said appeal is
attached as Annexure P-3 to the present petition. The respondents also
preferred an appeal against the judgment of conviction and order of sentence
imposed upon them. The appeal filed by the respondents was dismissed by
the Additional Sessions Judge, Ludhiana and the judgment of conviction and
order of sentence passed by the Trial Court was upheld. However,
simultaneously, the appeal filed by the petitioner against the non-grant of
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compensation by the Trial Court was also dismissed by the Additional
Sessions Judge, Ludhiana without awarding any compensation and
enhancing the substantive sentence. The copy of the judgment dated
20.01.2016 passed by the Additional Sessions Judge, Ludhiana, whereby
both the appeals filed by the respondents as well as the petitioner
(complainant) respectively were dismissed is attached as Annexure P-4.
The present revision petition has been preferred against the
aforementioned judgment.
4. The primary contention raised in the present petition is that the
Additional Sessions Judge, Ludhiana has misinterpreted the provisions of
Section 357 Cr.P.C. as also the judgment of the Hon'ble Supreme Court in
the case of 'R. Vijayan versus Baby and another, 2011(4) RCR (Criminal)
743'. The Appellate Court had ignored the fact that a cheque had been
issued for a sum of Rs.7,75,000/- which came to be dishonoured and while
convicting the accused, no amount of compensation was awarded.
5. The learned counsel for the petitioner contends that the
Additional Sessions Judge, Ludhiana, has clearly misinterpreted the
provisions of Section 138 of the Negotiable Instruments Act read with
Section 357 Cr.P.C. It has also misinterpreted the judgment of the Hon'ble
Supreme Court in R. Vijayan (supra) which had been cited before it.
Despite the fact that the dishonoured cheque was for an amount of
Rs.7,75,000/-, a fine of only Rs.1,000/- each was imposed by the Trial Court
and the same was not enhanced by the Additional Sessions Judge, Ludhiana
in appeal so as to adequately compensate the complainant. It is his
contention that post-recording of a conviction it becomes the primary duty of
the Trial Court to not only punish the offender but to also invariably
compensate the complainant for the dishonour of the cheque because,
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usually, in such cases of dishonour, the complainant would not file a civil
suit for recovery assuming that he would get adequate compensation under
the provisions of the Negotiable Instruments Act. On the other hand, post-
recording of a conviction, the complainant would wait for the Trial to
conclude to file a suit for recovery which, in all probability, would be time-
barred as cases of cheque dishonour would not be concluded within three
years. Taking his argument further, the learned counsel contends that the
Hon'ble Supreme Court has gone to the extent of holding that even if the
convict who was ordered to pay compensation has not paid the same but had
instead, undergone the sentence in default, he was still liable to pay the
compensation and the same was recoverable as per law. He, thus, contends
that to bring a certain amount of consistency to the principles of sentencing,
adequate compensation commensurate with the cheque amount must be
awarded and there can be no justification for awarding a flee-bite sentence.
Reliance is placed by him on the judgments of 'Suganthi Suresh Kumar
versus Jagdeeshan, 2002(1) RCR (Criminal) 502, R. Vijayan versus Baby
and another, 2011(4) RCR (Criminal) 743, H. Pukhraj versus D.Parasmal
2014(4) RCR (Criminal) 557, Suresh Yedbaji Jantre versus State of
Maharashtra 2018(2) NIJ 767 and Kumaran versus State of Kerala and
another 2017(2) RCR (Criminal) 879''.
6. The Legal Aid Counsel for the respondents-accused, on the
other hand, contends that the respondents have already undergone the
sentence imposed upon them and now the same cannot be enhanced. Since
the fine had been made a part of the sentence, the compensation could not be
awarded. The complainant-revisionist was well withing his right to
approach the Civil Court to file a suit for recovery. Therefore, there is no
merit in the present petition and the same ought to be dismissed.
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7. I have heard the learned counsel for the parties.
8. Before proceeding further, it would be apposite to refer to the
provisions of Section 138 of the Negotiable Instruments Act and Section 357
Cr.P.C. are reproduced hereinbelow:-
Section 138 of the Negotiable Instruments Act
"138 Dishonour of cheque for insufficiency, etc., of funds in the ac-
count. --Where any cheque drawn by a person on an account main-
tained 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 ac-
count 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 19 [a term which may be extended to two years],
or with fine which may extend to twice the amount of the cheque, or
with both: Provided that nothing contained in this section shall apply
unless--
(a) the cheque has been presented to the bank within a period of six
months from the date on which it is drawn or within the period of its
validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case
may be, makes a demand for the payment of the said amount of money
by giving a notice in writing, to the drawer of the cheque, 20 [within
thirty days] of the receipt of information by him from the bank
regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said
amount of money to the payee or, as the case may be, to the holder in
due course of the cheque, within fifteen days of the receipt of the said
notice.
Explanation.-- For the purposes of this section, "debt or other
liability" means a legally enforceable debt or other liability".
Section 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
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passing judgment, order the whole or any part of the fine recovered to
be applied-
(a) in defraying the expenses properly incurred in the prosecution;
(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) when any person is convicted of any offence for having caused the
death of another person or of having abetted the commission of such
an offence, in paying compensation to the persons who are, under the
Fatal Accidents Act, 1855 (13 of 1855 ), entitled to recover damages
from the person sentenced for the loss resulting to them from such
death;
(d) when any person is convicted of any offence which includes theft,
criminal misappropriation, criminal breach of trust, or cheating, or of
having dishonestly received or retained, or of having voluntarily
assisted in disposing of, stolen property knowing or having reason to
believe the same to be stolen, in compensating any bona fide purchaser
of such property for the loss of the same if such property is restored to
the possession of the person entitled thereto.
(2) If the fine is imposed in a case which is subject to appeal, no such
payment shall be made before the period allowed for presenting the
appeal has elapsed, or, if an appeal be presented, before the decision of
the appeal.
(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, by way 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) An order under this section may also be made by an Appellate
Court or by the High Court or Court of Session when exercising its
powers of revision.
(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".
9. The various judgments referred to by the parties are as under:-
In the case of 'Suganthi Suresh Kumar versus Jagdeeshan,
2002(1) RCR (Criminal) 502', the Hon'ble Supreme Court held as under:-
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"2. Appellant in this case is the complainant before the court of
9th Metropolitan Magistrate, Saidapet, Chennai. The offence
pitted against the respondent was under Section 138 of the Ne-
gotiable Instruments Act. In fact there were two complaints
arising out of two sets of cheques which were dishonoured by
the drawer bank. The trial Magistrate after holding the re-
spondent guilty of the offence convicted him of the aforesaid of-
fence but sentenced him only to undergo imprisonment till
rising of the court and pay a fine of Rs. 5000/- in both cases.
Apparently the respondent was happy and therefore he did not
prefer any appeal. But the complainant/appellant was unhappy
and therefore he preferred two revisions before the High Court
on the premise that the sentence was grossly inadequate. He
contended before the High Court that the trial magistrate
should atleast have invoked the provision under section 357(3)
of the Code of Criminal Procedure, 1973 (for short the Code).
3. However the learned single Judge of the High Court of
Madras was not inclined to interfere with the sentence passed
on the respondent and therefore he dismissed both the revi-
sions. Nonetheless learned single judge has chosen this oppor-
tunity to send a message to the trial magistrates "to keep in
mind the object of providing stringent punishment and the
guidelines given by the Apex Court in Pankaj Bhai Nagjibhai
Patel v. State of Gujarat and another, 2001(1) RCR (Criminal)
343 (SC) : 2001(2) SCC 595". Nor did the High Court invoke
Section 357(3) of the Code.
XXXX XXXXX XXXX
12. The total amount covered by the cheques involved in the
present two cases was Rs. 4,50,000/-. There is no case for the
respondent that the said amount had been paid either during
the pendency of the cases before the trial court or revision be-
fore the High Court or this Court. If the amount had been paid
to the complainant there perhaps would have been justification
for imposing a flee-bite sentence as had been chosen by the
trial Court. But in a case where the amount covered by the
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cheque remained unpaid it should be the look out of the trial
magistrates that the sentence for the offence under Section 138
should be of such a nature as to give proper effect to the object
of the legislation. No drawer of the cheque can be allowed to
take dishonour of the cheque issued by him light-heartedly. The
very object of enactment of provisions like 138 of the Act would
stand defeated if the sentence is of the nature passed by the
trial Magistrate. It is a different matter if the accused paid the
amount atleast during the pendency of the case.
13. Learned counsel for the respondent contends that the com-
plainant has subsequently filed a civil suit and attached all the
properties of the respondent. That is not a ground for lessening
the gravity of the offence or to impose a minor sentence chosen
by the trial court".
The Hon'ble Supreme Court in the case of 'R. Vijayan versus
Baby and another, 2011(4) RCR (Criminal) 743', held as under:-
"9. It is evident from Sub-Section (3) of section 357 of the
Code, that where the sentence imposed does not include a fine,
that is, where the sentence relates to only imprisonment, the
court, when passing judgment, can direct the accused to pay, by
way 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 sen-
tenced. The reason for this is obvious. Sub-section (1) of sec-
tion 357 provides that where the court imposes a sentence of
fine or a sentence of which fine forms a part, the Court may
direct the fine amount to be applied in the payment to any per-
son of compensation for any loss or injury caused by the of-
fence, when compensation is, in the opinion of the court, recov-
erable by such person in a Civil Court. Thus, if compensation
could be paid from out of the fine, there is no need to award
separate compensation. Only where the sentence does not in-
clude fine but only imprisonment and the court finds that the
person who has suffered any loss or injury by reason of the act
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of the accused person, requires to be compensated, it is permit-
ted to award compensation under compensation under section
357(3).
10. The difficulty arises in this case because of two circum-
stances. The fine levied is only Rs. 2000/-. The compensation
required to cover the loss/injury on account of the dishonour of
the cheque is Rs. 20,000/-. The learned Magistrate having
levied fine of Rs. 2,000/-, it is impermissible to levy any com-
pensation having regard to section 357(3) of the Code. The
question is whether the fine can be increased to cover the sum
of Rs. 20,000/- which was the loss suffered by the complainant,
so that the said amount could be paid as compensation under
section 357(1)(b) of the Code. As noticed above, section 138 of
the Act authorizes the learned Magistrate to impose by way of
fine, an amount which may extend to twice the amount of the
cheque, with or without imprisonment. Section 29 of the Code
deals with the sentences which Magistrates may pass. The
Chief Judicial Magistrate is empowered to pass any sentence
authorised by law (except sentence of death or imprisonment
for life or imprisonment for a term exceeding seven years). On
the other hand, sub-section (2) of Section 29 empowers a court
of a Magistrate of First Class to pass a sentence of imprison-
ment for a term not exceeding three years or fine not exceeding
Rs. 5,000/- or of both. (Note : By Act No.25 of 2005, sub-sec-
tion (2) of Section 29 was amended with effect from 23.6.2006
and the maximum fine that could be levied by the Magistrate of
First Class, was increased to Rs. 10,000/-). At the relevant
point of time, the maximum fine that the First Class Magistrate
could impose was Rs. 5,000/-. Therefore, it is also not possible
to increase the fine to Rs. 22,000/- so that Rs. 20,000/- could be
awarded as compensation, from the amount recovered as fine.
XXXXX XXXXXX XXXXX
14. We propose to address an aspect of the cases under section
138 of the Act, which is not dealt with in Damodar S. Prabhu. It
is sometimes said that cases arising under section 138 of the
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Act are really civil cases masquerading as criminal cases. The
avowed object of Chapter XVII of the Act is to "encourage the
culture of use of cheques and enhance the credibility of the in-
strument". In effect, its object appears to be both punitive as
also compensatory and restitutive, in regard to cheque dishon-
our cases. Chapter XVII of the Act is an unique exercise which
blurs the dividing line between civil and criminal jurisdictions.
It provides a single forum and single proceeding, for enforce-
ment of criminal liability (for dishonouring the cheque) and for
enforcement of the civil liability (for realisation of the cheque
amount) thereby obviating the need for the creditor to move two
different fora for relief. This is evident from the following provi-
sions of Chapter XVII of the Act.
(i) The provision for levy of fine which is linked to the
cheque amount and may extend to twice the amount of
the cheque (section 138) thereby rendering section
357(3) virtually infructuous in so far as cheque dishon-
our cases.
(ii) The provision enabling a First Class Magistrate to
levy fine exceeding Rs. 5,000/- (Section 143) notwith-
standing the ceiling to the fine, as Rs. 5,000/- imposed by
section 29(2) of the Code;
(iii) The provision relating to mode of service of sum-
mons (section 144) as contrasted from the mode pre-
scribed for criminal cases in section 62 of the Code;
(iv) The provision for taking evidence of the complainant
by affidavit (section 145) which is more prevalent in civil
proceedings, as contrasted from the procedure for re-
cording evidence in the Code;
(v) The provision making all offences punishable under
section 138 of the Act compoundable.
15. The apparent intention is to ensure that not only the of-
fender is punished, but also ensure that the complainant invari-
ably receives the amount of the cheque by way of compensation
under section 357(1)(b) of the Code. Though a complaint under
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section 138 of the Act is in regard to criminal liability for the
offence of dishonouring the cheque and not for the recovery of
the cheque amount, (which strictly speaking, has to be enforced
by a civil suit), in practice once the criminal complaint is
lodged under section 138 of the Act, a civil suit is seldom filed
to recover the amount of the cheque. This is because of the pro-
vision enabling the court to levy a fine linked to the cheque
amount and the usual direction in such cases is for payment as
compensation, the cheque amount, as loss incurred by the com-
plainant on account of dishonour of cheque, under section 357
(1)(b) of the Code and the provision for compounding the of-
fences under section 138 of the Act. Most of the cases (except
those where liability is denied) get compounded at one stage or
the other by payment of the cheque amount with or without in-
terest. Even where the offence is not compounded, the courts
tend to direct payment of compensation equal to the cheque
amount (or even something more towards interest) by levying a
fine commensurate with the cheque amount. A stage has
reached when most of the complainants, in particular the finan-
cing institutions (particularly private financiers) view the pro-
ceedings under section 138 of the Act, as a proceeding for the
recovery of the cheque amount, the punishment of the drawer of
the cheque for the offence of dishonour, becoming secondary.
16. Having reached that stage, if some Magistrates go by the
traditional view that the criminal proceedings are for imposing
punishment on the accused, either imprisonment or fine or
both, and there is no need to compensate the complainant, par-
ticularly if the complainant is not a victim in the real sense, but
is a well-to-do financier or financing institution, difficulties and
complications arise. In those cases where the discretion to dir-
ect payment of compensation is not exercised, it causes consid-
erable difficulty to the complainant, as invariably, by the time
the criminal case is decided, the limitation for filing civil cases
would have expired. As the provisions of Chapter XVII of the
Act strongly lean towards grant of reimbursement of the loss by
way of compensation, the courts should, unless there are spe-
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cial circumstances, in all cases of conviction, uniformly exer-
cise the power to levy fine upto twice the cheque amount (keep-
ing in view the cheque amount and the simple interest thereon
at 9% per annum as the reasonable quantum of loss) and direct
payment of such amount as compensation. Direction to pay
compensation by way of restitution in regard to the loss on ac-
count of dishonour of the cheque should be practical and real-
istic, which would mean not only the payment of the cheque
amount but interest thereon at a reasonable rate. Uniformity
and consistency in deciding similar cases by different courts,
not only increase the credibility of cheque as a negotiable in-
strument, but also the credibility of courts of justice.
17. We are conscious of the fact that proceedings under section
138 of the Act cannot be treated as civil suits for recovery of the
cheque amount with interest. We are also conscious of the fact
that compensation awarded under section 357(1)(b) is not in-
tended to be an elaborate exercise taking note of interest etc.
Our observations are necessitated due to the need to have uni-
formity and consistency in decision making. In same type of
cheque dishonour cases, after convicting the accused, if some
courts grant compensation and if some other courts do not
grant compensation, the inconsistency, though perfectly accept-
able in the eye of law, will give rise to certain amount of uncer-
tainty in the minds of litigants about the functioning of courts.
Citizens will not be able to arrange or regulate their affairs in
a proper manner as they will not know whether they should
simultaneously file a civil suit or not. The problem is aggrav-
ated having regard to the fact that in spite of section 143(3) of
the Act requiring the complaints in regard to cheque dishonour
cases under section 138 of the Act to be concluded within six
months from the date of the filing of the complaint, such cases
seldom reach finality before three or four years let alone six
months. These cases give rise to complications where civil suits
have not been filed within three years on account of the pen-
dency of the criminal cases. While it is not the duty of criminal
courts to ensure that successful complainants get the cheque
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amount also, it is their duty to have uniformity and consistency,
with other courts dealing with similar cases.
18. One other solution is a further amendment to the provision
of Chapter XVII so that in all cases where there is a conviction,
there should be a consequential levy of fine of an amount suffi-
cient to cover the cheque amount and interest thereon at a fixed
rate of 9% per annum interest, followed by award of such sum
as compensation from the fine amount. This would lead to uni-
formity in decisions, avoid multiplicity of proceedings (one for
enforcing civil liability and another for enforcing criminal liab-
ility) and achieve the object of Chapter XVII of the Act, which
is to increase the credibility of the instrument. This is however
a matter for the Law Commission of India to consider".
In the case of 'H. Pukhraj versus D. Parasmal, 2014(4) RCR
(Criminal) 557', the Hon'ble Supreme Court has held as under:-
"6. Again, in R. Vijayan v. Baby & Anr., 2011(4) RCR
(Criminal) 743 : 2011(4) RCR (Civil) 834 : 2011(6) Recent
Apex Judgments (R.A.J.) 19 : (2012)1 SCC 260 this Court
considered the same question. This Court also examined the
need to award compensation to the complainant. This Court was
of the opinion that the traditional view that the criminal
proceedings are for imposing punishment on the accused, either
punishment or fine or both, and there is no need to compensate
the complainant, particularly if the complainant is not a victim
in the real sense, but is a well-to-do financier or financing
institution, gives rise to difficulties and complications. This
Court further observed that in those cases where the discretion
to direct payment of compensation is not exercised, it causes
considerable difficulty to the complainant, as invariably, by the
time the criminal case is decided, the limitation for filing civil
cases would have expired. This Court further observed that as
the provisions of Chapter XVII of the NI Act strongly lean
towards grant of reimbursement of the loss by way of
compensation, the courts should, unless there are special
circumstances, in all cases of conviction, uniformly exercise the
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power to levy fine upto twice the cheque amount keeping in view
the cheque amount and the simple interest thereon at nine per
cent per annum as the reasonable quantum of loss and direct
payment of such amount as compensation. This Court further
observed that the direction to pay compensation by way of
restitution in regard to the loss on account of dishonour of the
cheque should be practical and realistic which would mean not
only the payment of the cheque amount but interest thereon at a
reasonable rate.
7. In light of the above judgments, we are of the opinion that the
impugned order needs to be modified. Hence, we sentence the
respondent-accused to undergo simple imprisonment for a
period of six months for offence under Section 138 of the NI Act.
Considering the fact that the cheque amount is L 6,19,488/- (Ru-
pees six lakh nineteen thousand four hundred eighty eight only),
we direct the respondent-accused to pay compensation
of L 10,00,000/- (Rupees ten lakh only) to the appellant. In de-
fault of payment of compensation, the respondent-accused will
have to undergo simple imprisonment for a period of six
months".
In case of 'Suresh Yedbaji Jantre versus State of
Maharashtra, 2018(2)NIJ 767', the Magistrate convicted and sentenced"
the accused to simple imprisonment for 04 months and imposed a fine of
Rs.3,000/-. In default of payment of fine, he was to undergo simple
imprisonment for 15 days. The Sessions Court, altered the sentence and
reduced it to "till rising of the Court". The fine was maintained. The
complainant challenged the said order whereby the sentence had been
reduced "till rising of the Court". However, compensation was not sought in
appeal or revision. The Bombay High Court (Aurangabad Bench) held as
under:-
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"14. Since the learned Additional Sessions Judge, Osmanabad
had unnecessarily taken a lenient view and altered the sentence
awarded to the accused on the basis of only a pursis, which can
not be said to be an evidence; the said order of alteration of
sentence requires to be modified. The amount of the cheque in-
volved in the matter was Rs. 70,000/-. Though in R. Vijayan
Hon'ble Supreme Court had adviced to award interest @9%
p.a., such interest can not be awarded here in this case, as com-
plainant had not filed any appeal or revision challenging the
order of refusal of grant compensation. The compensation that
would be awarded now to the complainant is the outcome of the
afore-said reasons. Therefore, awarding amount equivalent to
the cheque amount would serve the interest of both the parties.
Hence, following order is passed.
ORDER
1. Criminal Revision Application is hereby partly allowed.
2. Respondent No. 2/original accused is sentenced to pay fine of Rs. 70,000/- for the offence punishable under section 138 of Negotiable Instruments Act. This amount of fine is in addition to the fine amount Rs. 3,000/- already deposited. The said amount be deposited by the respondent No. 2/accused in the trial Court within a period of 4 weeks from today.
3. In default of payment of said fine amount, accused will have to undergo simple imprisonment for a period of one month.
4. After the amount of fine is deposited in the trial Court, it be given to complainant under section 357 (1) of Code of Criminal Procedure, 1973.
5. It is clarified that the sentence of imprisonment till rising of Court awarded by Learned Additional Sessions Judge in Cri. Appeal No. 57 of 2013 on 29-06- 2016 is hereby not altered.
Appeal dismissed".
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In the case of 'Kumaran versus State of Kerala and another 2017(2) RCR (Criminal) 879', the question was as to whether on account of non-payment of compensation, if the convict had undergone the default sentence, could the compensation still be recovered or not. The Hon'ble Supreme Court has held as under:-
"27. These two judgments make it clear that the deeming fiction of Section 431 Cr.P.C. extends not only to Section 421, but also to Section 64 of the Indian Penal Code. This being the case, Section 70 I.P.C., which is the last in the group of Sections dealing with sentence of imprisonment for non- payment of fine must also be included as applying directly to compensation under Section 357(3) as well. The position in law now becomes clear. The deeming provision in Section 431 will apply to Section 421(1) as well, despite the fact that the last part of the proviso to Section 421(1) makes a reference only to an order for payment of expenses or compensation out of a fine, which would necessarily refer only to Section 357(1) and not 357(3). Despite this being so, so long as compensation has been directed to be paid, albeit under Section 357(3), Section 431, Section 70 I.P.C. and Section 421(1) proviso would make it clear that by a legal fiction, even though a default sentence has been suffered, yet, compensation would be recoverable in the manner provided under Section 421(1). This would, however, be without the necessity for recording any special reasons. This is because Section 421(1) proviso contains the disjunctive "or" following the recommendation of the Law Commission, that the proviso to old Section 386(1) should not be a bar to the issue of a warrant for levy of fine, even when a sentence of imprisonment for default has been fully undergone. The last part inserted into the proviso to Section 421(1) as a result of this recommendation of the Law Commission is a category by itself which applies to compensation payable out of a fine under Section 357(1) and,
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by applying the fiction contained in Section 431, to compensation payable under Section 357(3)".
10. A perusal of the aforementioned judgments would show that the Courts have held that unless there are special circumstances, in all cases of conviction, fine up to twice the cheque amount ought to be imposed and out of the said fine amount, adequate compensation must be awarded to the complainant. The Hon'ble Supreme Court has gone to the extent of holding that even if a convict had undergone the sentence in default for non-payment of compensation, the said compensation amount was still recoverable. The provisions of the Act also lean towards grant of reimbursement of the loss by way of compensation. Therefore, directions to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic. Uniformity and consistency in deciding similar cases by different courts not only increase the credibility of the cheques as a Negotiable Instruments Act but also the credibility of the Courts of justice.
This awarding of compensation as a reimbursement is on account of the fact that usually, when proceedings under Section 138 of the Negotiable Instruments Act are initiated, no simultaneous civil suit for recovery is filed as the complainant assumes that he would get compensation in the proceedings initiated under Section138 of the Negotiable Instruments Act.
On the other hand, such proceedings take a long time to culminate and therefore, if the complainant was not awarded adequate compensation at the culmination of such proceedings, a civil suit for recovery, if filed, would in, all probability be hopelessly time-barred. In fact, awarding such adequate compensation in proceedings under Section 138 of the Negotiable Instruments Act would also avoid multiplicity of litigation inasmuch as there would be little requirement to institute a civil suit on the one hand while 17 of 18 ::: Downloaded on - 03-06-2023 11:18:24 ::: Neutral Citation No:=2023:PHHC:036155 CRR-1631-2016 (O & M) ::18::
enforcing the criminal liability under Section138 of the Negotiable Instruments Act on the other.
11. In view of the above discussion, the instant criminal revision petition is allowed. The respondents-accused are sentenced to pay a fine of Rs.10,00,000/-. This amount of fine would be in addition to the fine of Rs.1,000/- each already imposed. The said amount shall be deposited by the accused-respondents in the Trial Court within a period of 04 weeks from the date of this order. In default of payment of fine, the accused would have to undergo simple imprisonment for a period of one month. After the amount of fine is deposited in the Trial Court, it be given to the petitioner as compensation under Section 357(1) Cr.P.C. However, it is clarified that the sentence of imprisonment awarded by the Additional Sessions Judge, Ludhiana in its judgment dated 20.01.2016 (Annexure P-4) is not altered.
( JASJIT SINGH BEDI) JUDGE February 28, 2023 sukhpreet Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Neutral Citation No:=2023:PHHC:036155 18 of 18 ::: Downloaded on - 03-06-2023 11:18:24 :::