Punjab-Haryana High Court
Sanjiv Kumar vs Santokh Singh on 16 April, 2024
Author: Pankaj Jain
Bench: Pankaj Jain
Neutral Citation No:=2024:PHHC:051205
CRR-3656-2017 1
2024:PHHC:051205
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
262
CRR-3656-2017
Reserved on : 31.01.2024
Pronounced on : 16.04.2024
Sanjiv Kumar ...... Petitioner
versus
Santokh Singh ...... Respondent
CORAM : HON'BLE MR. JUSTICE PANKAJ JAIN
Present: Mr. S.S. Sidhu, Advocate
for the petitioner.
Mr. A.S. Shergill, Advocate for
Mr. Navjot Singh, Advocate
for the respondent.
****
PANKAJ JAIN, J. (Oral)
1. Complainant is in revision. Challenge is to the order dated
24.07.2017 passed by Additional Sessions Judge, Bathinda to the extent
that the appeal preferred by the complainant seeking enhancement of
sentence stands dismissed.
2. Petitioner filed complaint under Section 138 of the
Negotiable Instruments Act, 1881 (in short 'the N.I. Act') against the
respondent qua cheque bearing No.027942 dated 05.05.2014 drawn for a
sum of Rs.5 lakhs on account of the respondent was dishonoured with the
remarks of 'payment stopped by the drawer being instrument loss'.
Respondent was summoned to face trial. On the basis of evidence, JMIC
Talwindo Sabo held respondent guilty of offence punishable under
Section 138 of the N.I. Act and sentenced him to undergo R.I. for a period
of one year. He was further directed to pay a fine of Rs.1 lakh and in
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default of payment of fine to further undergo simple imprisonment for
two months. Both the parties preferred appeal. Respondent-accused was
aggrieved of conviction. Petitioner-complainant was aggrieved of
nominal fine and sought enhancement thereof. Appellate Court dismissed
both the appeals. Appeal preferred by the petitioner-complainant was
dismissed holding that there was no ground to enhance sentence as the
sentence awarded was appropriate.
3. Petitioner is before this Court impugning the judgment
passed by the Appellate Court.
4. While assailing the quantum of sentence awarded to the
respondent, counsel for the petitioner submits that the Courts below did
not appreciate that even though the petitioner successfully proved the
guilt of the accused, but has remained empty handed even after 10 years
of lis. He thus submits that after the petitioner successfully proved the
guilt of the respondent, he deserves to be compensated for the loss he has
suffered on account of criminal act of the respondent accused.
5. Per contra, counsel for the respondent however refers to the
grounds of appeal preferred by the petitioner before the Appellate Court to
submit that in the prayer clause, the petitioner never challenged fine part
of sentence and rather prayed for grant of compensation, in addition to the
sentence awarded to the accused. He contends that as per Section 357(3)
of the Code, question of awarding compensation would arise only where
the Court imposes sentence of which fine does not form a part. Hence the
petitioner himself in appeal sought enhancement of fine in appeal, he
cannot now claim compensation in view of statutory bar.
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6. I have heard counsel for the parties and have gone through
the records of the case.
7. The issue in the present case relates to adequacy of sentence.
Respondent stands convicted for offence punishable under Section 138 of
the N.I. Act and has been awarded sentence of R.I. for a period of one
year and fine of Rs.1,000/-. The same has been maintained by the
Appellate Court as such. Counsel for the respondent-convict relies upon
Section 357(3) of the Code to submit that the compensation cannot be
awarded as the fine has been imposed as part of sentence. At the first
blush, the argument appears to be attractive as trite it is that per mandate
of Section 357(3) of the Code, the compensation cannot be awarded
where sentence includes fine. However, Section 357 of the Code needs to
be read as a whole. The same is being reproduced hereinbelow:-
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
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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
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Court shall take into account any sum paid or
recovered as compensation under this section."
8. As per Section 357(1) of the Code where Court imposes
sentence of fine or a sentence of which fine forms a part, the Court may
while passing judgment, order the whole or any part of the fine recovered
to be applied in payment to any person of compensation for any loss or
injury caused by the offence when compensation is in the opinion of
Court recoverable by such person in a Civil Court. Thus, where a fine can
be enhanced, the same can be utilized to compensate the complainant for
any loss or injury caused by the offence. However, the issue was with
respect to provision as contained under Section 29 of the Code which
restricted the authority of the Magistrates to impose fine exceeding
10,000/- rupees.
9. Position on the said issue qua the offence punishable under
Section 138 of the N.I. Act stands altered after amendment in Section 143
of the N.I. Act by Amendment Act No.55 of 2002 with effect from
06.02.2003. Now the line between Section 357(1) and Section 357(3) has
faded so far as offence punishable under Section 138 of 1881 Act is
concerned. It is the said precise issue that has been answered by Supreme
Court in the case of R. Vijayan's case (supra). Apex Court while
considering Section 357(3) of the Code and the provisions of Chapter
XVII of the Act observing as under:-
"10. The difficulty arises in this case because of two
circumstances. 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
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Rs.2,000/-, it is impermissible to levy any
compensation 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 authorized 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
imprisonment 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-section (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.
12. It is of some interest to note, though may not be
of any assistance in this case, that the difficulty
caused by the ceiling imposed by section 29(2) of the
Code has been subsequently solved by insertion of
section 143 in the Act (by Amendment Act No.55 of
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2002) with effect from 6.2.2003. Section 143(1)
provides that notwithstanding anything contained in
the Code, all offences under Chapter XVII of the Act
should be tried by a Judicial Magistrate of the First
Class or by a Metropolitan Magistrate and the
provisions of sections 262 to 265 of the Code
(relating to summary trials) shall, as far as may be,
apply to such trials. The proviso thereto provides that
it shall be lawful for the Magistrate to pass a sentence
of imprisonment for a term extending one year and an
amount of fine exceeding Rs.5,000/-, in case of
conviction in a summary trial under that section. In
view of conferment of such special power and
jurisdiction upon the First Class Magistrate, the
ceiling as to the amount of fine stipulated in section
29(2) of the Code is removed. Consequently, in
regard to any prosecution for offences punishable
under section 138 of the Act, a First Class Magistrate
may impose a fine exceeding Rs.5000/-, the ceiling
being twice the amount of the cheque."
10. The Apex Court further observed as under:
"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
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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.
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 intended to be
an elaborate exercise taking note of interest etc. Our
observations are necessitated due to the need to have
uniformity 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 acceptable in the eye
of law, will give rise to certain amount of uncertainty
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
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whether they should simultaneously file a civil suit or
not. The problem is aggravated 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
pendency of the criminal cases. While it is not the
duty of criminal courts to ensure that successful
complainants get the cheque 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 sufficient 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 uniformity in decisions, avoid
multiplicity of proceedings (one for enforcing civil
liability and another for enforcing criminal liability)
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."
11. The aforesaid view has been reiterated in H. Pukhraj's case
(supra) observing as under:-
"5. In Suganthi Suresh Kumar v. Jagdeeshan,
2002(1) RCR (Criminal) 502 : (2002)2 SCC 420, this
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Court was considering the propriety of inadequate
sentence imposed by courts on the accused charged
under Section 138 of the NI Act. This Court
expressed displeasure about courts imposing a flea-
bite sentence on the accused. Following paragraph
from the said judgment could be quoted :
"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 before the High Court
or this Court. If the amounts 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 cueque
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 at
least during the pendency of the case."
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
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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 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 2 (2012) 1 SCC
260 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
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months for offence under Section 138 of the NI Act.
Considering the fact that the cheque amount is
Rs.6,19,488/- (Rupees six lakh nineteen thousand
four hundred eighty eight only), we direct the
respondent-accused to pay compensation of
Rs.10,00,000/- (Rupees ten lakh only) to the
appellant. In default of payment of compensation, the
respondent-accused will have to undergo simple
imprisonment for a period of six months."
12. In the present case, complaint relates to cheque dated
05.05.2014. The complaint was decided by JMIC, Talwandi Sabo on
23.05.2016. Appeal was thereafter decided on 24.07.2017 and since 2017,
petitioner is before this Court. As per settled law, proceedings under
Section 138 of the N.I. Act are restitutional in nature and denial of
compensation to the petitioner has resulted in a situation wherein the
impugned orders have virtually defeated the very objective of the
legislation.
13. In view of above, this Court does not find any reason to
deliberate further once the issue already stands decided authoritatively by
the binding precedents. So far as the objection raised by the respondent-
accused is concerned, the same also stands answered by Apex Court in
para 12 of R. Vijayan's case (supra).
14. Resultantly, the objection raised by counsel for the accused is
hereby rejected being without merit.
15. In view of above, present revision petition is allowed. While
maintaining the conviction, the respondent is sentenced to undergo R.I.
for a period of 01 year and to pay a fine of Rs.10 lakhs. The respondent
shall be entitled for setting off the sentence part already served. The same
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shall be paid to the petitioner as compensation for the loss caused to him
by the respondent by committing offence under Section 138 of the N.I.
Act in light of law laid down by Apex Court in R. Vijayan's case ibid.
16. Ordered accordingly.
(PANKAJ JAIN)
JUDGE
16.04.2024
Dinesh
Whether speaking/reasoned Yes
Whether Reportable : Yes
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