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2013 (10) TMI 949 - SC - Companies LawDishonour of cheque - Compensation in lieu of incarceration - Held that:- A reading of the impugned order appears to indicate that the payment of further sum of ₹ 69,500/-, in the instalments indicated in that order would be over and above the said sum of ₹ 80,000/-. This would violate Section 138 of the N.I. Act inasmuch as it would exceed the double of the cheque amount. This leads us to conclude that the intention of the High Court was that upon deposit/payment of the further sum of ₹ 69,500/- (in addition to the earlier sum of ₹ 80,000/-), the sentence of imprisonment for six months would stand withdrawn - Palpably, the convict has filed appeals all the way to the Apex Court which would have entailed further expenses of no mean measure. We think that with the receipt of ₹ 80,000/-, the complainant has received compensation for the dishonoured cheque as per the adjudication of the Trial Court. In these circumstances, any further payment would be in the nature of fine. Accordingly, we clarify that the Appellant must pay a sum of ₹ 80,000/- receivable by the complainant within four weeks from today, if not already paid. Process comprises two stages. First, when the Court determines the amount of fine and levies the same subject to the outer limit, if any, as is the position in the instant case. The second stage comprises invocation of the power to award compensation out of the amount so levied. The High Court does not appear to have followed that process. It has taken payment of ₹ 80,000/- as compensation to be distinct from the amount of fine it is imposing equivalent to the cheque amount of ₹ 69,500/-. That was not the correct way of looking at the matter. Logically, the High Court should have determined the fine amount to be paid by the appellant, which in no case could go beyond twice the cheque amount, and directed payment of compensation to the complainant out of the same. Viewed thus, the direction of the High Court that the appellant shall pay a further sum of ₹ 69,500/- does not appear to be legally sustainable - Decided partly against assessee.
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