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2009 (5) TMI 892 - SC - Companies Law


Issues Involved:
1. Whether a default sentence can be imposed when compensation is awarded under Section 357(3) of the Code of Criminal Procedure (Cr.P.C.).

Issue-wise Detailed Analysis:

1. Imposition of Default Sentence with Compensation under Section 357(3) Cr.P.C.:

The core issue in this case is whether a default sentence can be imposed when compensation is awarded under Section 357(3) of the Cr.P.C. The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to one year of simple imprisonment and to pay Rs. 8,25,000/- as compensation under Section 357(3) Cr.P.C., with a default sentence of six months of simple imprisonment if the compensation was not paid. This judgment was upheld by the Additional District and Sessions Judge and modified by the Kerala High Court to imprisonment till the rising of the Court, while retaining the compensation and default sentence.

Arguments by Petitioner:

Dr. K.P. Kailasanatha Pillay, representing the petitioner, argued that the High Court erred in confirming the default clause for compensation under Section 357(3) Cr.P.C. He contended that Section 357(3) Cr.P.C. does not provide for a default sentence, unlike Section 357(1) Cr.P.C., which deals with fines. He cited the Supreme Court's decision in *Dilip S. Dahanukar v Kotak Mahindra Co. Ltd. & Anr.* and *Ettappadan Ahammedkutty @ Kunhappu v E.P. Abdullakoya @ Kunhi Bappu & Anr.*, arguing that compensation under Section 357(3) should be recovered as per Section 421 Cr.P.C. and not through a default sentence.

Arguments by Respondent:

Mr. Raghenth Basant, representing the respondent, argued that the High Court's judgment was consistent with the Supreme Court's earlier decisions in *Hari Singh v Sukhbir Singh* and *Sugnathi Suresh Kumar v Jagdeeshan*. He emphasized that compensation under Section 357(3) Cr.P.C. is a social concern and can be enforced with a default sentence, as there is no specific recovery method prescribed in the Code. He also cited Section 431 Cr.P.C., which allows for the recovery of any money payable under the Code as if it were a fine, thus supporting the imposition of a default sentence.

Supreme Court's Analysis:

The Court noted the conflicting views on whether a default sentence can be imposed for compensation under Section 357(3) Cr.P.C. The Court referred to its previous decisions, including *Hari Singh v Sukhbir Singh* and *Sugnathi Suresh Kumar v Jagdeeshan*, which supported the imposition of a default sentence for compensation. It also discussed Section 431 Cr.P.C., which allows for the recovery of money payable under the Code as if it were a fine, and Section 64 IPC, which permits a default sentence for non-payment of fines.

Conclusion:

The Supreme Court concluded that the provisions of Sections 357(3) and 431 Cr.P.C., read with Section 64 IPC, empower the Court to impose a default sentence for non-payment of compensation. The Court held that the power to impose a default sentence is necessary to ensure the effectiveness of the compensation provision under Section 357(3) Cr.P.C. Therefore, the Court dismissed the Special Leave Petition and upheld the High Court's decision to impose a default sentence for non-payment of compensation.

Final Judgment:

The Special Leave Petition was dismissed, and the petitioner was granted an extension of three months to deposit the compensation amount.

 

 

 

 

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