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TMI Blog2012 (6) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... entenced her to pay a fine of Rs. 2000/- and in default to undergo imprisonment for one month. He also directed the accused to pay Rs. 20,000/- as compensation to the complainant and in default to undergo simple imprisonment for three months. 3. The first respondent challenged the said judgment and the criminal appeal filed by her was allowed by the First Additional Sessions Judge, Thiruvananthapuram by judgment dated 26.11.2001. The conviction and sentence imposed on the first respondent was set aside and the appellant was acquitted. The first appellate court held that the accused having denied her signature in the postal acknowledgement relating to the notice dated 20.4.1995, the appellant ought to have examined the postman who served the notice; and as the appellant did not do so, the court held that the complainant had not discharged the burden to prove that the notice was duly served on the first respondent. The appellant filed criminal appeal before the High Court. The High Court allowed the appeal in part. It held that the service of notice was duly proved. As a consequence it restored the conviction entered by the learned Magistrate in reversal of the judgment of the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 sessions when exercising its power 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." 7. Sub-section (3) of section 357, is categorical that the compensation can be awarded only where fine does not form part of the sentence. Section 357(3) has been the subject-matter of judicial interpretation by this Court in several decisions. In State of Punjab v. Gurmej Singh [2002] 6 SCC 663, this Court held : "A reading of sub-section (3) of Section 357 would show that the question of award of compensation would arise where the court imposes a sentence of which fine does not form a part." This Court also held that section 357(3) will not apply where a sentence of fine has been imposed. 8. In Sivasuriyan v. Thangavelu [2004] 13 SCC 795, this Court held : "In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/-. The learned Magistrate having levied fine of 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 Magistra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the ceiling being twice the amount of the cheque. 13. This case relates to dishonour of cheque in the year 1995. Though the complainant-appellant has succeeded in obtaining a conviction, he has virtually lost in the sense he did not get compensation to recover the amount of the dishonoured cheque. As the limitation for filing a civil suit expired during the pendency of the appeal before the sessions court, the appellant has also lost the opportunity of recovering the amount by way of civil suit. In view of this peculiar position, we requested Dr. Rajiv Dhavan, senior counsel, to assist us as an Amicus Curiae to suggest methods to improve the disposal of cases under section 138 of the Act and also improve the relief that could be granted in such cases. In the meantime a three Judge Bench of this Court in Damodar S.Prabhu v. Sayed Babalal H. [2010] 101 SCL 27, addressed the question of reluctance of offenders to compound the cases at earlier stages of the case prosecution leading to a huge pendency of cheque dishonour cases, and issued the following guidelines proposing levy of 'a graded scale of fine' to encourage compounding at earlier stages of the case : "(a) That directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsatory and restitutive, in regard to cheque dishonour cases. Chapter XVII of the Act is an unique exercise which blurs the dividing line between civil and criminal jurisdictions. It provides a single forum and single proceeding, for enforcement of criminal liability (for dishonouring the cheque) and for enforcement of the civil liability (for realization of the cheque amount) thereby obviating the need for the creditor to move two different fora for relief. This is evident from the following provisions of Chapter XVII of the Act. (i) The provision for levy of fine which is linked to the cheque amount and may extend to twice the amount of the cheque (section 138) thereby rendering section 357(3) virtually infructuous in so far as cheque dishonour cases. (ii) The provision enabling a First Class Magistrate to levy fine exceeding Rs. 5,000/- (Section 143) notwithstanding the ceiling to the fine, as Rs. 5,000/- imposed by section 29(2) of the Code; (iii) The provision relating to mode of service of summons (section 144) as contrasted from the mode prescribed for criminal cases in section 62 of the Code; (iv) The provision for taking evidence of the complainant by affidavit (sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 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 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 int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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