Gauhati High Court
Bhagwan Das Damani vs Sachin Sarkar on 11 January, 2017
Author: Rumi Kumari Phukan
Bench: Rumi Kumari Phukan
1
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL
PRADESH)
Criminal Revision (P) No.357 of 2006
Sri Bhagwan Das Damani
Proprietor M/s Damani Medical Stores
Guwahati Roller Flour Mill,
Christan Basti, Guwahati-4
Present Address at C/o Peak Agencies,
City Tower, 1st Floor, S.C. Goswami Road,
Panbazar, Guwahati.
..........Petitioner/Complainant
Advocates for the Petitioner:
Mr. G.N.Sahewalla, Sr. Advocate.
Mr. Pran Bora, Advocate,
Md.Aslam, Advicate,
-Versus-
Sri Sachin Sarkar,
Proprietor of M/s Pharmatech India,
Mahal-3 Bengur Avenue Block-A
Kolkatta-700055
...........Respondent
Advocates for the Respondents:
Mr. Mr. B. D.Das, Sr. Advocate, Mr. H.K.Sarma, Advocate.
BEFORE
THE HON'BLE MRS JUSTICE RUMI KUMARI PHUKAN
Date of hearing : 6.12.2016
Date of Judgment & Order : 11.01.2017
2
JUDGMENT AND ORDER (CAV)
Heard Mr. Pran Bora, learned counsel for the petitioner and Ms. D. Borgohain, learned counsel appearing for the respondent No 2.
(2) By this revision the petitioner has challenged the judgment and order dated 19.7.2006 passed by the learned SDJM (S) No.1, Kamrup, sentencing the opposite party U/S 138 of the NI Act to pay a fine of Rs.1000/- in default s.i.for two months and also to pay a cheque amount of Rs.3 lakhs to the petitioner within 15 days.
(3) The petitioner /complainant was appointed as a selling agent by the opposite party/accused and in pursuance to the agreement entered into between the parties the petitioner deposited Rs.2 lakhs as security deposit. But the opposite party stopped the transaction and business with the petitioner so having no alternative the petitioner /complainant returned the consignment to the opposite party and demanded the security deposit of Rs.3 lakhs along with interest. After prolonged discussion the opposite party issued a cheque of Rs.3 lakhs as on 30.1.2001 but however on presentation of the said cheque it was dishonoured for which the petitioner filed the complaint case against the opposite party which was registered as CR Case No.1295C/2001.
(4) The opposite party contested the case and after examination of evidence and the opposite party U/S 313 CrPC the learned trial Court hold the accused guilty U/S 138 CrPC and has convicted the accused as aforesaid.
(5) Now the petitioner/complainant has challenged the aforesaid finding of the Court with a submission that the learned Court has taken a very lenient view in awarding sentence and finding of the Court has caused great prejudice to the petitioner/complainant and the punishment should be enhanced.
(6) It has been contended that the provisions making bouncing of cheques as an offence are intended to discourage people from not honouring their commitment by way of payment through cheque and to inculcate faith in such transaction. The instant 3 complaint case was filed in the year 2001 and hard earned money of the complainant has not been returned by the opposite party and the learned trial Court has taken very lenient view of the matter and sentenced only fine of Rs.1000/- and directed to pay the said amount of Rs.3 lakhs to the petitioner.
(7) It is to be noted that the revision has been directly preferred from the impugned judgment of the learned trial Court and on query made by the Court about the status of appeal the learned counsel for the petitioner has appraised this Court that the appeal preferred by the respondent has been dismissed for non-prosecution as on 20.7.2015. The learned counsel for the respondent has also admitted to the said position, although copy of order is not produced. A computer generated result of the aforesaid appeal has been produced before this Court. Accordingly, it can be assumed that the appeal has been dismissed and still no payment has been made by the respondent.
(8) It can be noted that the learned trial Court has not provided any substantive sentence while awarding punishment and has made a sentence of fine of Rs.1000/- only and also directed to pay the amount of cheque. Although, as per the provision of Section 138 of the NI Act, the Court can either pass sentence of imprisonment or fine or both and in view of the matter there can be no illegality in the aforesaid order. However it reflects that the learned trial Court has not recorded any reason for awarding only nominal fine while the cheque was issued against huge business transaction. The petitioner who is a businessman might have incurred heavy loss in the meantime. In fact, the aforesaid agreement between the parties was entered on 20.5.1999 with effect from 1.5.1999 to 31.3.2000 and for failure of carrying out the terms of said agreement the dispute arose and ultimately, as discussed above, the respondent issued a cheque of Rs.3 lakhs which was also dishonoured.
(9) The whole course of affairs reflects that even after such lenient judgment and finding the opposite party did not deposit the amount even after dismissal of appeal and in the process, loss of the petitioner can be calculated at least from the filing of aforesaid complaint case which is more than 16 years.
4In Damodar S. Prabhu-vs- Syed Babalal H. (2910) 5 SCC 663 the Hon'ble Apex Court briefly examined the object sought to be achieved by the provisions of Section 138 and the purpose underlying the punishment provided therein. Wherein it has been held that unlike other crimes, punishment in Section 138 cases is meant more to ensure payment of money rather than to seek retribution. The Court said:
"17...Unlike that for other forms of crime, the punishment her ( in so far as the complainant is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque."
(10) In Criminal Appeal No. 1902/2011 in R. Vijayan -vs- Babby and another, reported in (2012) 1 SCC 260 it has been held as follows-
"14. That it is some time said that the cases arises U/S 138 of the Act are really civil cases masquerading as criminal cases. The avowed object of Chapter XVII of the Act is to encourage the culture of the use of cheque enhance the credibility of the instrument. In effect, its object appears to be both punitive as also compensatory and restitutive in regard to cheque dishonoured cases.
Chapter XVII of the Act is an unique exercise which blurs the dividing line between civil and criminal jurisdiction. It provides a single Forum and a single proceeding, for enforcement of criminal liability ( for dishonouring of cheques) and for enforcement of civil liabilities. (For realisation of Cheque amount) thereby obviating the need for the creditors to move to different fora for relief.
15 -The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under section 357(1)(b) of the Code. Though a complaint under 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 provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, 5 the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under section 357 (1)(b) of the Code and the provision for compounding the offences 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 interest. 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 financing institutions (particularly private financiers) view the proceedings 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, particularly 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 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. 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 special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping 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 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. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.
In Criminal Appeal No.1651/2013 (Somnath Sarkar -vs- Utpal Basu Mallik & anr), the Hon'ble Apex Court has upheld the imposition of additional fine by the High Court in revision, in the following words-6
"Coming to the question whether additional amount which the High Court has directed the appellant to pay could be levied in lieu of sentence of imprisonment, we must keep significant aspects in view. First and foremost of the fact that the power to levy fine is circumscribe under the statute to twice the cheque amount. Even in a case where the Court may be taking a lenient view in favour of the accused by not sending him to prison, it cannot impose a fine more than twice the cheque amount."
(11) In a recent judgment decided on 18.9.2015 in Criminal Revision No. 583 of 2012 (Smti Meel Bai Age -vs- Rameshwar Prasad Chauhan, the High Court of Satisgarh law regarding grant of compensation U/S 357(3) in cases arising out of 138 of NI Act has been discussed in the following manner.
"24 Thus it is quite vivid that U/S 138 of the NI Act the Criminal Court is competent to levy fine upto twice the cheque amount and direct payment of such amount as compensation by way of restitution in regard to the loss on account of dishonour of cheque U/S 357(1)(b) CrPC and as such power U/S 357(3) CrPC cannot be exercised by the Criminal Court in the cheque dishonour cases."
(12) In the given case the findings of the learned trial Courts has attained the finality as soon as the appeal was dismissed. However, it is to be noted that though the considerable discretion has been vested in the trial Court to confer punishment but the same ought to have been exercised in valid reasons. The Court has imposes sentence of fine of Rs.1000/- in the year 2006 while the payment was made in 2001 and although the cheque amount was directed to be paid but the relief is not provided as mandated by the legislation that has been referred and discussed by the Hon'ble Apex Court. There can be no denial that the grievance of the complainant was not properly addressed by the impugned order. In the aforesaid decision of R. Vijayan (supra) reference has been made to the provision of Section 357(4) which provides that "An order under this Section may also be made by an appellate Court or by a High Court or by a Court of Sessions while exercising its power of revision.
(13) Having regard to all above it is apparent that the petitioner is still not getting the due from the respondent after long span of 16 years though the cheque amount has been directed to be given by the trial Court but the same is not at all adequate to 7 take care of loss incurred by the petitioner. That apart, though the learned trial Court has not indicated that the direction for payment of cheque amount has been given by way of compensation but same can be construed that it has been granted by way of compensation U/S 357(3) CrPC which is not permissible as has been discussed above.
(14) Taking into consideration the provisions contained in Section 138 of the NI Act in which punishment imposable is two years imprisonment or with fine which can be twice to the amount of cheque and taking note of the law laid down in this regard by the Hon'ble Supreme Court in the aforesaid cases that punishment to be awarded in Section 138 of the NI Act cases are meant to ensure payment of money and the threat of jail is only to ensure recovery and as such imposition of jail sentence is not mandatory. It is the considered view of this Court that the ends of justice would be served if the award of punishment with fine is maintained but the fine amount should redress the grievances of the applicant/complainant. Accordingly, while maintaining the conviction, the sentence made by the Court which is not at all proper is modified. The respondent is hereby directed to pay fine of Rs.6 lakhs (six lakhs which is twice the cheque amount) U/S 357(1)(b) CrPC within a period of two months and out of the said amount Rs.5.50 lakhs (Rupees Five Lakhs Fifty Thousand which will take care of loss of the complainant including interest etc.) be paid to the complainant/applicant in default the respondent is sentenced to suffer rigorous imprisonment for 1 year.
(15) As a fallout and corollary above, the Criminal Revision Petition is allowed in part, while maintaining the conviction and sentence is modified as indicated above. The petition is disposed of accordingly.
JUDGE Nandi