TMI Blog2021 (7) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable Instruments Act, 1881 (for short, 'the NI Act') before the trial Magistrate. The trial Magistrate upon full trial by his judgment dated 4-8-2012 found the offence under Section 138 of the NI Act proved against the accused/respondent No. 1 and convicted him under Section 138 and sentenced to undergo RI for three months. Feeling aggrieved against the judgment of conviction and order of sentence awarded, the accused preferred criminal appeal under Section 374(3) of the CrPC, whereas, the complainant preferred criminal revision against the order not awarding compensation amount/fine to the accused. The revisional Court dismissed the revision of the complainant/petitioner holding that he could have invoked the remedy of appeal under Section 372 of the CrPC against which the present Cr.M.P. No. 357/2013 has been filed by the complainant/petitioner. However, the appellate Court in appeal under Section 374(3) of the CrPC maintained conviction of the accused/respondent No. 1, but set aside the sentence of imprisonment and sentenced only to pay fine of ₹ 5,000/-, in default to undergo imprisonment for one month, against which the present revision Cr. Rev. No. 233/2013 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless-- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. 7. By virtue of Section 138 of the NI Act, the Criminal Court after convicting the accused has to impose punishment of imprisonment, which may extend to one year, or with fine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r v. Utpal Basu Mallick and another (2013) 16 SCC 465, their Lordships of the Supreme Court while considering the punishment to be imposed under Section 138 of the NI Act have held in no uncertain terms that under Section 138 of the NI Act, only fine sentence can be imposed by the Criminal Court and observed as under:-- 15. ... Suffice it to say that the High Court was competent on a plain reading of Section 138 to impose a sentence of fine only upon the appellant. Inasmuch as the High Court did so, it committed no jurisdictional error. ... 13. Thus, 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 aforesaid judgments (supra), 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. 14. Now, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant during pendency of the case before trial court or High Court and observed as under:- 12. The total amount covered by the cheques involved in the present two cases was ₹ 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 flea-bite sentence as had been chosen by the trial court. But in a case where the amount covered by the cheque remained unpaid it should be the lookout 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 Section 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. 17. In the matter of R. Vijayan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posing 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 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 up to 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 amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of the civil liability for realisation of the cheque amount, thereby obviating the need for the creditor to move two different fora for relief. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided. Thereafter, while granting appeal and confirming conviction of the respondent therein, their Lordships of the Supreme Court sentenced him only to fine, which was enhanced to ₹ 16 lakhs and further directed the same to be paid as compensation to the complainant. It was held as under:- 40. The appeals are allowed. The judgment1 and order of the High Court is set aside. The conviction of the respondent under Section 138 of the Negotiable Instruments Act is confirmed. However, the respondent-accused is sentenced on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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