Himachal Pradesh High Court

Reserved On: 18.8.2025 vs State Of H.P. And Another on 26 August, 2025

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Cr. Revision No. 130 of 2024

Reserved on: 18.8.2025

Date of Decision: 26.8.2025.

    Ravinder Kumar                                                                ...Petitioner

                                          Versus

    State of H.P. and another


    Coram
                            r                to                                  ...Respondents

Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 Yes.

For the Petitioner : Mr. M.A. Khan, Senior Advocate, with Mr. Azmat Hayat Khan, Advocate.

For Respondent No.1 : Mr. Prashant Sen, Deputy Advocate General.

For Respondent No.2 : Mr. Mayank Sharma, Advocate, with Mr. Rajiv Rai, Advocate.

Rakesh Kainthla, Judge

The present revision is directed against the judgment

dated 9.1.2024, passed by learned Sessions Judge, Hamirpur,

H.P. (learned Appellate Court), vide which the judgment of

conviction dated 31.5.2023 and order of sentence dated 5.6.2023,

Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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passed by learned Judicial Magistrate First Class, Court No.3,

Hamirpur, H.P. (learned Trial Court) were upheld and the appeal

filed by the petitioner (accused before the learned Trial Court)

was dismissed. (Parties shall hereinafter be referred to in the same

manner as they were arrayed before the learned Trial Court for

convenience.)

2. Briefly stated, the facts giving rise to the present

revision are that the complainant filed a complaint before the

learned Trial Court against the accused for the commission of an

offence punishable under Section 138 of the Negotiable

Instruments Act (NI Act). It was asserted that the accused had

agreed to sell the land to the complainant vide agreement dated

31.5.2017. He received an advance of ₹4.00 lacs out of the sale

consideration. He agreed to execute the sale deed or to return

the double amount of the advance taken by him in case of failure

to execute the sale deed. The accused failed to execute the sale

deed as per the terms and conditions of the agreement. He

issued a cheque of ₹8.00 lacs on 24.10.2017 drawn on Punjab

National Bank, Bhota, in favour of the complainant to return

double the amount promised by him. The complainant

presented the cheque to his bank, but it was returned with the

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remarks 'funds insufficient'. The complainant issued a legal

notice dated 2.11.2017, which was duly served upon the accused,

but the accused failed to repay the amount. Hence, the

complaint was filed before the learned Trial Court for taking

action as per law.

3. The learned Trial Court found sufficient reasons to

summon the accused. When the accused appeared, a notice of

accusation was put to him for the commission of an offence

punishable under Section 138 of the NI Act, to which he pleaded

not guilty and claimed to be tried.

4. The complainant examined Kiran Bindu (CW1), Tanuj

Rathour (CW2) and himself (CW3) to prove his case.

5. The accused, in his statement recorded under Section

313 of Cr.P.C., admitted that he had agreed to sell the land to the

complainant. He admitted that he had issued a cheque of ₹8.00

lacs. He claimed that he had issued a blank cheque as security,

and the complainant filled in the amount on the blank cheque.

He admitted that the cheque was dishonoured with an

endorsement 'funds insufficient'. He said that he was liable to

pay only ₹4.00 lacs. He asked the complainant to execute the

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sale deed; however, the complainant did not get the sale deed

executed. He examined himself (DW1).

6. Learned Trial Court held that the issuance of the

cheque was not disputed. The plea taken by the accused that the

cheque was issued as security will not help the accused because

the cheque issued towards the security also attracts the

provisions of Section 138 of the NI Act. The accused admitted his

signature on Mark-X. He could not evade his legal liability by

asserting that he was merely the Power of Attorney of Shakti

Chand when he had received ₹4.00 lacs and issued a signed

cheque in favour of the complainant. The cheque was

dishonoured with an endorsement 'funds insufficient'. The

notice was duly served upon the accused, and he failed to repay

the amount. Hence, the accused was convicted of the

commission of an offence punishable under Section 138 of the NI

Act and sentenced to undergo simple imprisonment for six

months, pay compensation of ₹8.00 lacs to the complainant and

a fine of ₹10,000/- to the State.

7. Being aggrieved by the judgment and order passed by

the learned Trial Court, the accused preferred an appeal which

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was decided by the learned Sessions Judge, Hamirpur, H.P.

(learned Appellate Court). Learned Appellate Court concurred

with the findings recorded by the learned Trial Court that there

is a presumption under Section 139 of the NI Act that the cheque

was issued in discharge of the debt or other liabilities, and the

burden is upon the accused to rebut this presumption. The

issuance of the cheque was not disputed. Therefore, a

presumption would apply to the present case. The statement of

the accused was insufficient to rebut this presumption. The plea

taken by the accused that the cheque was issued as a security

was of no avail, as a security cheque also attracts the provisions

of Section 138 of the NI Act. Therefore, the appeal filed by the

accused was dismissed.

8. Being aggrieved by the judgments and order passed

by the learned Courts below, the petitioner/accused has filed the

present petition, asserting that the learned Courts below failed

to properly appreciate the evidence. The amount was in the

nature of a penalty. The payment was due from Shakti Chand

and not from the accused, who was merely the Power of

Attorney of Shakti Chand. The complainant misused the cheque;

therefore, it was prayed that the present revision be allowed and

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the judgments and order passed by the learned Courts below be

set aside.

9. I have heard Mr. M.A. Khan, learned Senior Counsel,

assisted by Mr. Azmat Hayat Khan, learned counsel for the

petitioner/accused, Mr. Prashant Sen, learned Deputy Advocate

General, for respondent No.1-State and Mr. Mayank Sharma,

Advocate, vice Mr. Rajiv Rai, learned counsel for respondent

No.2.

10. Mr. M.A. Khan, learned Senior Counsel for the

petitioner/accused, submitted that it was undisputed that the

cheque was issued to the complainant as security, and the

accused was the Power of Attorney of Shakti Chand. The

payment was to be made by Shakti Chand and not by the

complainant. Learned Courts below erred in holding that the

accused is liable merely because he had received the money on

behalf of his principal. Therefore, he prayed that the present

revision be allowed and the judgments and order passed by the

learned Courts below be set aside.

11. Mr. Prashant Sen, learned Deputy Advocate General,

for respondent No.1-State, supported the judgments and order

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passed by the learned Courts below and submitted that no

interference is required with them.

12. Mr. Mayank Sharma, learned counsel representing

the complainant, submitted that the issuance of the cheque was

not disputed. The accused had failed to rebut the presumption

contained in Section 118(a) and 139 of the NI Act. The cheque

was dishonoured with an endorsement 'funds insufficient' and

the notice was duly served upon the accused. Therefore, all the

ingredients of the commission of an offence punishable under

Section 138 of the NI Act were duly satisfied, and the learned

Trial Court had rightly convicted and sentenced the accused.

Hence, he prayed that the present petition be dismissed.

13. I have given considerable thought to the submissions

made at the bar and have gone through the records carefully.

14. It was laid down by the Hon'ble Supreme Court in

Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8 SCC 204:

(2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC 786 that the revisional

court does not exercise an appellate jurisdiction and it can only

rectify the patent defect, errors of jurisdiction or the law. It was

observed at page 207: -

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"10. Before adverting to the merits of the contentions, at the outset, it is apt to mention that there are concurrent findings of conviction arrived at by two courts after a detailed appreciation of the material and evidence brought on record. The High Court

.

in criminal revision against conviction is not supposed to

exercise the jurisdiction like the appellate court, and the scope of interference in revision is extremely narrow. Section 397 of the Criminal Procedure Code (in short "CrPC") vests

jurisdiction to satisfy itself or himself as to the correctness, legality, or propriety of any finding, sentence, or order, recorded or passed, and as to the regularity of any proceedings of such inferior court. The object of the provision is to set right

a patent defect or an error of jurisdiction or law. There has to be a well-founded error which is to be determined on the merits of individual cases. It is also well settled that while considering the same, the Revisional Court does not dwell at

length upon the facts and evidence of the case to reverse those findings.

15. This position was reiterated in State of Gujarat v.

Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC

1294, wherein it was observed at page 695:

14. The power and jurisdiction of the Higher Court under Section 397CrPC, which vests the court with the power to

call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The

object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings.

15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section 397 has been considered and succinctly explained as under: (SCC p. 475, paras 12-13) "12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior

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court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has

.

to be a well-founded error, and it may not be appropriate

for the court to scrutinise the orders, which, upon the face of it, bear a token of careful consideration and appear to be in accordance with law. If one looks into the

various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under challenge are grossly erroneous, there is no compliance with the provisions of law, the finding

recorded is based on no evidence, material evidence is ignored, or judicial discretion is exercised arbitrarily or perversely. These are not exhaustive classes, but are merely indicative. Each case would have to be determined

on its own merits.

13. Another well-accepted norm is that the revisional jurisdiction of the higher court is a very limited one and cannot be exercised in a routine manner. One of the inbuilt restrictions is that it should not be against an

interim or interlocutory order. The Court has to keep in mind that the exercise of revisional jurisdiction itself should not lead to injustice ex facie. Where the Court is

dealing with the question as to whether the charge has been framed properly and in accordance with law in a

given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even the framing

of a charge is a much-advanced stage in the proceedings under the CrPC."

16. This Court in the aforesaid judgment in Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :

(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section 228CrPC is sought for as under : (Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27)

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"27. Having discussed the scope of jurisdiction under these two provisions, i.e., Section 397 and Section 482 of the Code, and the fine line of jurisdictional distinction, it will now be appropriate for us to enlist the principles

.

with reference to which the courts should exercise such

jurisdiction. However, it is not only difficult but inherently impossible to state such principles with precision. At best and upon objective analysis of various

judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section

397 or Section 482 of the Code or together, as the case may be:

27.1. Though there are no limits to the powers of the

Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised

in invoking these powers. The power of quashing criminal proceedings, particularly the charge framed in terms of Section 228 of the Code, should be exercised very sparingly and with circumspection, and that too in

the rarest of rare cases.

27.2. The Court should apply the test as to whether the

uncontroverted allegations as made from the record of the case and the documents submitted therewith prima

facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion, and

where the basic ingredients of a criminal offence are not satisfied, then the Court may interfere. 27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in a conviction or not at the stage of framing of charge or quashing of charge.

*** 27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether

2025:HHC:28730

there is sufficient material on the basis of which the case would end in a conviction; the court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of

.

the process of court leading to injustice.

*** 27.13. Quashing of a charge is an exception to the rule of

continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected

to marshal the records with a view to decide admissibility and reliability of the documents or records, but is an opinion formed prima facie."

17. The revisional court cannot sit as an appellate court and

start appreciating the evidence by finding out

inconsistencies in the statement of witnesses, and it is not legally permissible. The High Courts ought to be cognizant of the fact that the trial court was dealing with an application for discharge.

16. This position was reiterated in State of Gujarat v.

Dilipsinh Kishorsinh Rao, (2023) 17 SCC 688: 2023 SCC OnLine SC

1294, wherein it was observed at page 695:

14. The power and jurisdiction of the Higher Court under

Section 397CrPC, which vests the court with the power to call for and examine records of an inferior court, is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case.

The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings.

15. It would be apposite to refer to the judgment of this Court in Amit Kapoor v. Ramesh Chander [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460: (2012) 4 SCC (Civ) 687: (2013) 1 SCC (Cri) 986], where scope of Section

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397 has been considered and succinctly explained as under: (SCC p. 475, paras 12-13) "12. Section 397 of the Code vests the court with the

power to call for and examine the records of an

inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set

right a patent defect or an error of jurisdiction or law. There has to be a well-founded error, and it may not be appropriate for the court to scrutinise the orders, which, upon the face of it, bear a token of careful

consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under challenge are grossly

erroneous, there is no compliance with the provisions

of law, the finding recorded is based on no evidence, material evidence is ignored, or judicial discretion is exercised arbitrarily or perversely. These are not exhaustive classes, but are merely indicative. Each

case would have to be determined on its own merits.

13. Another well-accepted norm is that the revisional

jurisdiction of the higher court is a very limited one and cannot be exercised in a routine manner. One of

the inbuilt restrictions is that it should not be against an interim or interlocutory order. The Court has to keep in mind that the exercise of revisional

jurisdiction itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in the exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even the framing of the charge is a much-advanced stage in the proceedings under CrPC."

16. This Court in the aforesaid judgment in Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 :

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(2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986] has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section

.

228CrPC is sought for as under : (Amit Kapoor case [Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460 : (2012) 4 SCC (Civ) 687 : (2013) 1 SCC (Cri) 986], SCC pp. 482-83, para 27)

"27. Having discussed the scope of jurisdiction under these two provisions, i.e. Section 397 and Section 482 of the Code, and the fine line of jurisdictional distinction, it will now be appropriate for us to enlist

the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but inherently impossible to state such principles with precision. At best and upon objective

analysis of various judgments of this Court, we are

able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the

Code or together, as the case may be:

27.1. Though there are no limits to the powers of the

Court under Section 482 of the Code but the more the power, the more due care and caution is to be

exercised in invoking these powers. The power of quashing criminal proceedings, particularly the charge framed in terms of Section 228 of the Code, should be

exercised very sparingly and with circumspection and that too in the rarest of rare cases.

27.2. The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion, and where the basic ingredients of a criminal offence are not satisfied, then the Court may interfere.

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27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in a conviction or not at the stage of framing of charge or

quashing of charge.

*** 27.9. Another very significant caution that the courts

have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is

concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to

injustice.

*** 27.13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to

permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide

admissibility and reliability of the documents or records, but is an opinion formed prima facie."

17. The revisional court cannot sit as an appellate court and start appreciating the evidence by finding out

inconsistencies in the statement of witnesses, and it is not legally permissible. The High Courts ought to be cognizant of the fact that the trial court was dealing with an application for discharge.

17. It was held in Kishan Rao v. Shankargouda, (2018) 8 SCC

165: (2018) 3 SCC (Cri) 544: (2018) 4 SCC (Civ) 37: 2018 SCC OnLine SC

651 that it is impermissible for the High Court to reappreciate the

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evidence and come to its conclusions in the absence of any perversity.

It was observed on page 169:

.

"12. This Court has time and again examined the scope of

Sections 397/401 CrPC and the grounds for exercising the revisional jurisdiction by the High Court. In State of

Kerala v. Puttumana Illath Jathavedan Namboodiri [State of Kerala v. Puttumana Illath Jathavedan Namboodiri, (1999) 2 SCC 452: 1999 SCC (Cri) 275], while considering the scope of the revisional jurisdiction of the High Court, this Court has laid down the following: (SCC pp. 454-55, para 5)

"5. ... In its revisional jurisdiction, the High Court can call for and examine the record of any proceedings to satisfy itself as to the correctness, legality or propriety

of any finding, sentence or order. In other words, the

jurisdiction is one of supervisory jurisdiction exercised by the High Court for correcting a miscarriage of justice. But the said revisional power cannot be equated with the power of an appellate court, nor can

it be treated even as a second appellate jurisdiction. Ordinarily, therefore, it would not be appropriate for the High Court to reappreciate the evidence and come

to its conclusion on the same when the evidence has already been appreciated by the Magistrate as well as

the Sessions Judge in appeal unless any glaring feature is brought to the notice of the High Court which would

otherwise tantamount to a gross miscarriage of justice. On scrutinising the impugned judgment of the High Court from the aforesaid standpoint, we have no hesitation in concluding that the High Court exceeded its jurisdiction in interfering with the conviction of the respondent by reappreciating the oral evidence. ..."

13. Another judgment which has also been referred to and relied on by the High Court is the judgment of this Court in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke [Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke, (2015) 3 SCC 123: (2015) 2 SCC (Cri) 19]. This Court

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held that the High Court, in the exercise of revisional jurisdiction, shall not interfere with the order of the Magistrate unless it is perverse or wholly unreasonable or there is non-consideration of any relevant material, the

order cannot be set aside merely on the ground that another view is possible. The following has been laid down in para 14: (SCC p. 135)

"14. ... Unless the order passed by the Magistrate is perverse or the view taken by the court is wholly unreasonable or there is non-consideration of any relevant material or there is palpable misreading of

records, the Revisional Court is not justified in setting aside the order, merely because another view is possible. The Revisional Court is not meant to act as an appellate court. The whole purpose of the revisional

jurisdiction is to preserve the power in the court to do

justice in accordance with the principles of criminal jurisprudence. The revisional power of the court under Sections 397 to 401 CrPC is not to be equated with that of an appeal. Unless the finding of the court, whose

decision is sought to be revised, is shown to be perverse or untenable in law or is grossly erroneous or glaringly unreasonable or where the decision is based

on no material or where the material facts are wholly ignored or where the judicial discretion is exercised

arbitrarily or capriciously, the courts may not interfere with the decision in exercise of their revisional

jurisdiction."

14. In the above case, also a conviction of the accused was recorded, and the High Court set aside [Dattatray Gulabrao Phalke v. Sanjaysinh Ramrao Chavan, 2013 SCC OnLine Bom 1753] the order of conviction by substituting its view. This Court set aside the High Court's order, holding that the High Court exceeded its jurisdiction in substituting its views, and that too without any legal basis.

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18. This position was reiterated in Bir Singh v. Mukesh

Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40: (2019) 2 SCC (Civ)

309: 2019 SCC OnLine SC 13, wherein it was observed at page 205:

"16. It is well settled that in the exercise of revisional

jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record.

17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH [Southern Sales & Services v. Sauermilch Design and Handels GmbH, (2008) 14 SCC 457], it is a well-established principle of law that the

Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a

jurisdictional error. The answer to the first question is, therefore, in the negative."

19. The present revision has to be decided as per the

parameters laid down by the Hon'ble Supreme Court.

20. The complainant admitted in his cross-examination

that the agreement was executed regarding the land owned by

the father-in-law of the accused. He volunteered to say that the

accused was the Power of Attorney of his father-in-law. The

accused Ravinder Kumar (DW1) also stated that he was the

Power of Attorney holder of Shakti Chand, and the agreement

was executed on his behalf. This was not challenged in the

cross-examination; rather, it was suggested that the accused,

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being the Power of Attorney holder of Shakti Chand, could sell

his land.

21. Therefore, it was undisputed on record that the

accused was acting as the Power of Attorney holder of Shakti

Chand. Section 182 of the Indian Contract Act defines an agent as

a person employed to do any act of another or to represent

another in dealing with a third person. The person for whom

such an act is done or who is so represented is called a principal.

The accused was representing Shakti Chand for the sale of his

land; therefore, the accused was his agent, whereas Shakti

Chand was the principal.

22. Section 230 of the Indian Contract Act provides that

an agent cannot personally enforce contracts entered into by

him on behalf of his principal, nor is he personally bound by

them in the absence of a contract to the contrary. It was laid

down by the Hon'ble Supreme Court in Marine Container Services

South (P) Ltd. v. Go Go Garments [(1998) 3 SCC 247 that an agent

acting on behalf of a disclosed principal cannot sue nor can he be

sued on the transactions entered by him. This judgment was

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followed in Vivek Automobiles Ltd. v. Indian Inc., (2009) 17 SCC

657, wherein it was observed: -

.

"8. Section 230 of the Contract Act categorically makes it clear that an agent is not liable for the acts of a disclosed principal subject to a contract to the contrary.

No such contract to the contrary has been pleaded. An identical issue was considered by this Court in Marine Container Services South (P) Ltd. v. Go Go Garments [(1998) 3 SCC 247: AIR 1999 SC 80], where a

similar order passed under the Consumer Protection Act was set aside by this Court. It was held that by virtue of Section 230, the agent could not be sued when the principal had been disclosed."

23. A similar view was taken in Prem Nath Motors Ltd. v.

Anurag Mittal, (2009) 16 SCC 274, wherein it was held: -

"7. Section 230 of the Contract Act categorically makes it clear that an agent is not liable for the acts of a disclosed principal subject to a contract to the contrary.

No such contract to the contrary has been pleaded. An identical issue was considered by this Court in Marine

Container Services South (P)Ltd. v. Go Go Garments [(1998) 3 SCC 247: AIR 1999 SC 80], where a similar order passed under the Consumer Protection Act was set aside by this

Court. It was held that by virtue of Section 230, the agent could not be sued when the principal had been disclosed. A similar view has been expressed by a three- judge Bench of this Court in Civil Appeal No. 6653 of 2005 arising out of SLP (C) No. 19562 of 2004 [Vivek Automobiles Ltd. v. Indian Inc., (2009) 17 SCC 657].

24. This judgment was followed in Virender Khullar v.

American Consolidation Services Ltd., (2016) 15 SCC 308, and it was

observed: -

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14. Since Respondent 1 was simply acting as an agent of Coronet Group Inc., as such, in view of Section 230 of the Indian Contract Act, 1872, it cannot be held personally liable to enforce the contract entered into between its

.

principal and the appellants. This Court, in its order dated 10-9-2009 [American Consolidation Service Ltd. v. Virendra Khullar, Civil Appeal No. 2080 of 2004, order dated 10-9-

2009 (SC)], has accepted the plea of Respondent 1 that Respondent 1 is not a consignee, but only an agent of the intermediate consignee. That being so, Respondent 1 cannot be held to be liable in respect of the claim made by

the appellants. We think it relevant to mention here that in Marine Container Services South (P) Ltd. v. Go Go Garments [Marine Container Services South (P) Ltd. v. Go Go Garments, (1998) 3 SCC 247], this Court has already made

clear that defence under Section 230 of the Indian

Contract Act, 1872 is available in the cases under the Consumer Protection Act, 1986 by the agents of the principal with whom the complainant had the agreement.

25. In the present case, the complainant knew that the

accused was an agent of Shakti Chand and was representing him.

This is apparent from the fact that the complainant admitted

that the land belonged to Shakti Chand, and the accused was

acting as the Power of Attorney holder of Shakti Chand. Hence,

the accused was acting on behalf of a disclosed principal, and no

contract could have been enforced against him personally,

which was entered into by him on behalf of the principal.

26. It was submitted that the accused had signed the

cheque, and he is liable to pay the amount to the complainant.

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This submission is only stated to be rejected. The accused can be

held liable if he has a subsisting liability, and not merely by

signing the cheque. The cheque carries a presumption that it was

issued for consideration and in discharge of liability. However,

when the evidence of the complainant shows that the

transaction was with Shakti Chand and the accused was acting

only as his agent, he cannot be held personally liable as per

Section 230 of the Indian Contract Act. Thus, the evidence of the

complainant rebutted the presumption of consideration, and the

learned Courts below erred in holding that the accused is liable

to pay the amount.

27. Both the learned Courts proceeded on a presumption

and did not notice the provisions of Section 230 of the Indian

Contract Act, which had a material bearing on the present case.

The learned Trial Court also directed the payment of

compensation to the complainant as well as the payment of a

fine to the State. This is impermissible. Section 357(1) of the

Cr.P.C. deals with a situation when the Court imposes a sentence

and fine or a sentence of which fine forms a part. It reads as

under: -

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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) 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 shelf all offence,

in paying in, 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 his 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

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such amount as may be specified in the order to the person who has suffered any loss or injury reason of the act for which the accused person his been so sentenced.

(4) An order under this section may also be made by all

Appellate Courts 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.

28. It is apparent from the perusal of the Section that

when the Court orders the payment of a fine, the whole or part of

the fine can be ordered to be paid as compensation. It was laid

down by the Hon'ble Supreme Court in Dilip S. Dahanukar v.

Kotak Mahindra Co. Ltd., (2007) 6 SCC 528: 2007 SCC OnLine SC

489, that when the fine is imposed, the compensation has to be

awarded from that amount. It was observed at page 538: -

"10. It is, therefore, apparent that if a court imposes a sentence of fine or a sentence or where it forms a part thereof, the court is entitled to direct that whole or any

part of the fine recovered, to be applied to in respect of the factors enumerated in Clauses (a), (b), (c) or (d). Section 421 of the Code deals with the mode and manner in which the fine levied is to be recovered. Section 424 deals with the steps required to be taken by the court where the amount of fine has not been paid forthwith. Section 357 deals with two types of cases, namely, (i) where only a sentence has been imposed, and (ii) where a fine also forms part of the sentence. When a fine is imposed sim- pliciter, Section 421 read with Section 424 would be appli-

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cable, but where a fine forms part of the sentence, it would not have any application.

xxxxxx

.

26. The distinction between sub-sections (1) and (3) of

Section 357 is apparent. Sub-section (1) provides for the application of an amount of fine while imposing a sen- tence of which fine forms a part; whereas sub-section (3)

calls for a situation where a court imposes a sentence of which fine does not form a part of the sentence. xxxxx

44. Magistrates cannot award compensation in addition

to a fine. When a fine is imposed, however, the private party has no right to insist that compensation may be awarded to him out of the amount of the fine. The power to award compensation under Section 357(3) is not an an-