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TMI Blog2014 (10) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... agistrate qua the convictions of the petitioners under Section 138 of the Negotiable Instruments Act, 1881 (the Act). The sentence of fine of Rs. 5000/- in default of payment of fine to undergo SI for 7 days awarded by the Magistrate stood modified by the Sessions Judge. The Sessions Judge had awarded compensation of Rs. 50 lacs to the complainant company which amount had to be paid within one month failing which the complainant was at liberty to get the sentence executed. This Court notes that the cheque amount in this case was Rs. 1,19,80,800/-. B. Criminal Revision Petition No. 656/2009 has impugned the judgment and order of sentence dated 17.11.2009 and 25.11.2009 respectively passed by the Sessions Judge sustaining the conviction of the petitioners under Section 138 of the Act. The Magistrate had awarded compensation of Rs. 50 lacs to the complainant; in default of payment of fine to undergo SI for a period of 6 months. This Court notes that the cheque amount in this case was Rs. 41,18,400/-. C. Criminal Revision Petition No. 617/2012 has impugned the judgment and order of sentence dated 19.5.2012 which had endorsed the finding returned by the Magistrate sustaining the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refuted and rightly so. 5. At the outset, this Court notes that this argument was not taken either before the Magistrate or before the Sessions Judge. Although in written ground (H) in the grounds of appeal filed before the Sessions Judge this ground finds mention yet the Sessions Judge has not answered; this is for the reason that this was not argued before the Sessions Court at that stage. Be that as it may, this Court notes that PW-3 in his deposition on oath in Court had stated that he was authorized by the company to file the present complaint. The authorization is dated 26.9.1995. This letter of authorization clearly mentioned the resolution passed by the company authorizing him to file the present complaint. The power of attorney executed in March, 1999 has also been exhibited as Ex. PW-3/B in the version of PW-3. This power of attorney gave authority to PW-3 to institute and continue the present proceedings. A bald suggestion was given to this witness that he was in fact not authorized to file the present complaint. However, these submissions do not detract from the veracity of the document which is the authorization dated 26.9.1995 (Ex. PW-3/A) which specifically states t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the notice was dated 16.8.1995, in the absence of the complainant company having discharged the initial burden of the demand notice having been served upon the petitioner company the subsequent proceedings in the complaint are clearly questionable. 9. While refuting this statement the learned counsel for the respondent has drawn attention of this Court to Ex. PW-3/C which was the notice served upon the petitioners and had been proved in the version of PW-3. Submission being that no suggestion was even given to PW-3 that no such demand notice was received by him. 10. Testimony of PW-3 substantiates this submission of the learned counsel for the respondent. PW-3 on oath deposed that a legal notice was sent to the petitioner company (Ex. PW-3/C) through registered post. The AD Card was proved as Ex. PW-3/D. Further deposition of PW-3 being that reply to this legal notice had been sent by the petitioners vide their reply Ex. PW-3/E and along with this reply a cheque of Rs. 5 lacs had been appended as part payment of the total outstanding amount which at that time was almost Rs. 5 crores. No suggestion had been given to this witness that the notice had not been received by the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were disputed and this had been proved in the cross-examination of PW-3 wherein Marks DA and DB which is a letter and a fax message exchange respectively, between the parties evidencing the fact that the goods had not been supplied in time; this was also the reason why no invoices and sale receipts had been proved by the complainant. Submission being reiterated that in the light of this evidence, the presumption as contained in Section 118 of the Act and relied upon by the Courts below is illegal as preponderance of probabilities clearly show that a doubt had been created on the veracity of the transactions and there was no legally payable debt by the petitioner company to the complainant. In this background, the conviction of the petitioners is wholly illegal. 14. Record shows that in terms of the complaint and the other evidence which includes the testimony of PW-3, on placing of the purchase order by the petitioners, the complainant company would send the goods along with invoices as per the value of the goods. There was an agreed period and after the expiry of that period, the petitioners would make the payment in regard to the goods and the security cheques would t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. ............... 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of grantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act." 16. This argument is thus also without any merit. The presumption under Section 118 of the N.I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed cheque amount was Rs. 1,19,80,800/- was on the lesser side and accordingly the sentence was sought to be enhanced. This was a revision petition preferred under Section 397 of the Cr.P.C. seeking invocation of the powers of the Revisional Court under Section 401 of the Cr.P.C. It was on this application that the order for the enhancement of sentence (as noted supra) has been passed. Both the parties had been heard and were present at the time when the order was passed. 20. Learned senior counsel for the petitioners at this stage submits that he has no quarrel on this proposition that orders could have been passed on this application by the Sessions Judge and even otherwise under the provisions of Section 386 of the Cr.P.C. the powers of the appellate Court are wide and the appellate Court may also not only alter, modify or set aside the conviction but can also pass any appropriate order on the sentence as well. Submission of the learned senior counsel for the petitioners only being bordered on the interchangeable nature of the terms 'fine' and 'compensation'; submission being reiterated that sentence of compensation could not have been awarded under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court may order the payment of compensation. A reading of Section 357(4) Cr.P.C. makes it clear that under this sub-section an order of compensation can be passed by the appellate Court; the High Court or by the Court of Sessions in revision. The power of the Court to award compensation is not ancillary to other sentences but is in addition thereto. This power under this Section has a message i.e. a measure of responding properly to the crime as also reconciling the victim with the offender. There does exist a distinction between 'fine' and 'compensation' but the purpose which both seek to achieve is similar. An amount of 'compensation' can be directed to be recovered as a fine but a legal fiction is raised in relation to recovery of 'fine' and in that sense a 'fine' stands on a higher footing than the 'compensation' awarded by the Court. Although, after the amendment in the said Act (by the Amendment Act, 2002) a Magistrate of the first class can also impose a sentence of fine exceeding Rs. 5000/-. 23. In the case i.e. Criminal Revision Petition No. 546/2011 the sentence of fine imposed by the Magistrate was Rs. 5000/-. It was mod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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