Justice Jasjit Singh Bedi in a Criminal revision petition noted that the direction to pay compensation for the loss on account of dishonour of the cheque should be practical and realistic and further explained that the compensation for proceedings under Section 138 of the NI Act is done on the account of the fact that, no simultaneous civil suit is filed by the complainant assuming that he would get compensation in the above proceedings only.
Brief Facts:
The current revision petition has been filed under Section 397/401 read with Section 357(4) Cr.P.C. for setting aside the order dated 20.01.2016 passed by the Court of the Additional Sessions Judge, Ludhiana.
The revisionist or the complainant that is the petitioner has instituted a criminal complaint under Section 138 of the Negotiable Instruments Act against the respondents on account of dishonor of a cheque for an amount of Rs.7,75,000/-. The trial court had convicted the respondents, but at the time of conviction, no compensation was awarded to the petitioner in terms of Section 357 Cr.P.C. Accordingly, the petitioner filed an appeal for non-grant of compensation and enhancing the respondent’s sentence. The respondents also filed an appeal against the judgment of the trial court. Both appeals were dismissed and now the petitioner has preferred the present revision petition.
Contentions of the Petitioner:
The petitioner contended that the trial court has misinterpreted the provisions of Section 138 of the NI Act, read with Section 357 Cr.P.C. It is then pointed out that even though the dishonored 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 the appeal to adequately compensate the complainant. The petitioner contended that it is the primary duty of the trial court to not only punish the offender but also invariably compensate the complainant. The petitioner relied on the judgments of the Supreme Court and contended 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.
Contentions of the Respondent:
The Counsel for the respondent contended that the respondents have already undergone the sentence that was imposed upon them and now it cannot be enhanced. And since the fine had been made a part of the sentence, compensation cannot be awarded.
Observations of the court:
The Court first referred to the provisions of Section 138 of the Negotiable Instruments Act, which talks about “Dishonour of cheque for insufficiency, etc., of funds in the account”, and Section 357 Cr.P.C., which talks about “Order to pay compensation”, as well as various judgments of the Supreme Court in this regard. Accordingly, it was concluded that unless there are special circumstances, in all cases of conviction, a 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. It was also pointed out that the Supreme Court has also held that the compensation was still recoverable even when the convict had undergone the sentence in default for non-payment of compensation. It was concluded that the direction to pay compensation by way of restitution in regard to the loss because of dishonour of the cheque should be practical and realistic. The Court then noted that awarding of compensation as reimbursement is because 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. Further, if the complainant is not awarded adequate compensation at the culmination of proceedings, then a civil suit for recovery, if filed would be time-barred.
The Decision of the Court:
The revision petition was allowed and the respondent was sentenced to pay a fine of Rs.10,00,000/-, in addition to the fine of Rs. 1,000/- each which was already imposed. However, the sentence of imprisonment was not altered.
Case Title: Gaurav Khullar v. Eleven V Industries and ors.
Coram: Justice Jasjit Singh Bedi
Advocate(s) for appellant: Mr. Viren Jain, Advocate, for the revisionist-complainant.
Advocate for the Respondent: Mr. Rajesh Dhiman, Legal Aid Counsel for the respondents.
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