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2007 (3) TMI 808

..... Advs For Respondents: V. Prabhakar, Ramjee Prasad, V. Subramani And Ravathi Raghavan, Advs. JUDGMENT S.B. Sinha, J. 1. The parties hereto were partners. The partnership business ran into rough weather. Appellant intended to initiate some criminal proceedings against the respondent. Allegedly, the bank account was to be operated jointly. Respondent alone as a partner, thus, could not have taken out any money from the bank. However, allegedly, he did so. According to the respondent, a compromise was entered into by and between the parties in a police station on the following terms: 1) Both the firms accounts right from inception till date shall be finalized and the share of profits determined by an independent auditor, Mr. R. Kasi Viswanathan. His determination shall be final and binding on both the parties. 2) The above scrutiny and finalization shall be completed before 31.1.1996. Until such time, we shall not raise any dispute against each other. 3) Till such finalization, Mr. Shankar shall handover a cheque (cheque No. 551661 dated 31.1.96) for ₹ 7 lakhs to Mr. Suresh Kumar as security deposit. 4) If the share of profits for Mr. Suresh Kumar is more than 7 lakhs, he shall e .....

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..... but he has preferred no reply to the notice even after 15 days and he has not paid the cheque amount till date. 3. The learned Trial Judge, however, found the said defence of the respondent to be not acceptable. The learned Magistrate by a judgment and order dated 12.10.1998 imposed a fine of ₹ 7,05,000/- and directed that if the respondent fails to remit, he will undergo three months simple imprisonment. Out of the said amount, he was directed to pay a sum of ₹ 7,00,000/- by way of compensation and the remaining sum of ₹ 5000/- was to be credited to the Government. 4. An appeal there against was filed by the respondent. The learned Additional Sessions Judge partially allowed the said appeal stating: 22. In the result, this Criminal Appeal is partly allowed thereby the finding of conviction against the accused under Section 138 of Negotiable Instrument Act is confirmed and the sentence is modified to the effect that the appellant/ accused should pay a fine of ₹ 5,000/- (Rupees five thousand only) under Section 138 of Negotiable Instrument Act and in default to undergo three months simple imprisonment and the order of the learned Magistrate in awarding compe .....

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..... akar, learned Counsel appearing on behalf of the respondent, on the other hand, would submit that having regard to the fact that this Court had issued notice on enhancement of sentence; in terms of Section 377 of the Code of Criminal Procedure, the respondent would be entitled to contend that no case had been made out for recording a judgment of conviction by the courts below. According to the learned Counsel, the defence of the respondent having regard to entering into a compromise by and between the parties hereto was wrongly not accepted by the courts below, as the same should have been considered by the courts below in the light of the averments made by the complainant in the complaint petition wherefrom it would be evident that: (i) the share of the profit in the partnership business was still to be ascertained; (ii) the cheque was issued in anticipation of the accounts to be audited by a named auditor; (iii) Only upon finalization of the accounts by the auditor, the debt or liability of the respondent could have been clearly ascertained so as to make him liable for payment of any amount pursuant thereto or in furtherance thereof. 9. In the instant case, it was urged, as the a .....

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..... me compensation under Section 357(3) of the Code of Criminal Procedure. In support of his submission he has also referred to a decision of this Court in Rachhpal Singh v. State of Punjab. In the said case this Court allowed compensation under Sub-section (3) of Section 357 CrPC to the victims but it would not be applicable in the present case since a sentence of fine has also been imposed. 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. The decision in Rachhpal Singh does not take any contrary view nor hold that compensation may be awarded over and above the sentence of fine. A perusal of Sub-section (3) of Section 357 CrPC would make the position clear. 11. In the present case, sentence of fine has also been imposed, as indicated in the earlier part of this judgment. Out of the fine, a sum of ₹ 1000 each had been ordered to be given to the three injured persons, namely, Dalip Singh, Amarjit Kaur and Gurmeet Kaur. The balance amount is to go to the legal heirs of Jagjit Singh. We had heard the learned Counsel for both parties on this aspect. Lea .....

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..... withdrawn from the bank in contravention of the terms and conditions of the deed of partnership, he accepted his liability at least to the extent of ₹ 7,00,000/-. It appears from a plain reading of the complaint petition that the respondent had admitted his liability to the extent of ₹ 7,00,000/-. It was found as of fact to be so by the courts below. The said findings do not warrant any interference. The defence raised by the respondent to the effect that the parties had entered into a compromise in the police station and he had to sign a cheque under some threat or coercion had not been accepted by the courts below. There cannot be any doubt whatsoever that had the respondent been able to show that the cheque had been issued not in discharge of a debt but by way of a security pending determination of his liability by an auditor, the matter would have been different. In such an event, the court could have arrived at a finding that the cheque having been issued on the basis of an anticipated profit which by itself did not create any liability in presenti and the result of the audit might have gone either way, no case under Section 138 of the Act was made out. But, the s .....

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