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2021 (7) TMI 736 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - interpretation of statute - Section 138 of the NI Act - imposition of punishment of imprisonment, which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both - whether the learned appellate Court has rightly interfered with the sentence and sentenced to fine only which the accused had already deposited? - HELD THAT:- Here in the instant case, in Section 138 of the NI Act the word "or" has been employed and discretion has been conferred to the Criminal Court sentencing the convicted person for offence under Section 138 of the NI Act. Thus, there is a discretion left with the Criminal Court dealing with complaint under Section 138 of the NI Act either to sentence the accused with imprisonment or to punish the accused with the sentence of fine upon considering the facts and circumstances of the case. From the provisions contained in Section 138 of the NI Act and following the principles of law laid down by their Lordships of the Supreme Court in the case of Somnath Sarkar v. Utpal Basu Mallick and another [2013 (10) TMI 949 - SUPREME COURT], it is quite vivid that Criminal Court sentencing the accused for commission of offence under Section 138 of the NI Act is competent to impose sentence of fine only as imposition of jail sentence is not mandatory as it is the discretion vested with the Criminal Court dealing with complaint under Section 138 of the NI Act either to impose jail sentence or sentence of fine only depending on the facts and circumstances of particular case. Whether the trial Court as well as the Court of Session is justified in not imposing compensation upon the accused/respondent No. 1 under Section 357(1)(b) of the CrPC? - HELD THAT:- The law with regard to grant of compensation under Section 357(3) of the CrPC in cases arising from Section 138 of the NI Act is well settled. The object of Section 138 of the NI Act appears to be punitive as well as compensatory in nature as it provides a single forum and single proceeding for enforcement in criminal liability (for dishonouring the cheque) and for enforcement of civil liability (for realization of cheque amount). It is quite vivid that under Section 138 of the NI Act, Criminal Court is competent to levy fine up to 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 under Section 357(1)(b) of the CrPC and as such, the power under Section 357(3) of the CrPC cannot be exercised by Criminal Court in the cheque dishonour cases. It is quite vivid that the trial Magistrate has convicted the accused/respondent No. 1 under Section 138 of the NI Act and sentenced him to undergo RI for three months, but no fine was imposed, however, in appeal filed by the accused, the appellate Court maintained conviction, but reduced sentence to fine sentence only. 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 the amount of cheque - ends of justice would be served if fine awarded ₹ 5,000/- is enhanced to ₹ 2,67,011/- and an additional amount of ₹ 25,000/- towards interest on the said amount is imposed. Accordingly, the accused/respondent No. 1 is sentenced to pay fine of ₹ 2,67,011/- and ₹ 25,000/- which shall be paid as compensation to the complainant/petitioner under Section 357(1)(b) of the CrPC. It is stated at the Bar that respondent No. 1 has deposited fine of ₹ 5,000/- in compliance of the order passed by the appellate Court. The criminal revision is allowed in part.
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