2008 (8) TMI 934 - SC - Indian Laws

Amount of compensation deposited in terms of Section 357 of the Code - Whether in a suit for recovery of money on a cheque issued by the defendant but dishonoured, the amount received by the plaintiff-creditor in a criminal proceeding should be adjusted? - HELD THAT - We have noticed that whereas the judgment of conviction and sentence was passed on 15.12.2005, the suit was decreed by the civil court on 23.01.2006. Deposit of a sum of ₹ 2,00,000/- by the appellants in favour of the respondent herein, was directed by the Criminal Court. Such an order should have been taken into consideration by the Trial Court. An appeal from a decree, furthermore, is a continuation of suit. The limitation of power on a civil court should also be borne in mind by the appellate court. Evidently, a duty has been cast upon the civil courts to take into account the sum paid or recovered as compensation in terms of Section 357 of the Code. It is futile to urge that on the date on which the civil court passed the decree the appellants were not convicted. As noticed hereinbefore, the appeal is a continuation of the suit and in that view of the matter as the appellants had in total deposited a sum of ₹ 4,00,000/-, i.e., ₹ 2,10,000/- in the criminal proceeding and ₹ 1,90,000/- in the civil proceedings, out of which a sum of ₹ 3,09,000/- has been withdrawn by the respondent, the High Court was obligated to take the same into consideration. In other words, having regard to the provisions of Sub-section (5) of Section 357 of the Code, a duty was cast upon the High Court to take into account the fact that a sum of ₹ 2,00,000/- had already been paid by the appellants to the respondent. Concededly, both the proceedings were maintainable. Law recognizes the same. The Parliament must have the situation of this nature in mind while enacting Clause (b) of Sub-section (1) of Section 357 of the Code and Sub-section (5) thereof. We, therefore, are of the opinion that the impugned judgment should be modified and is directed to be modified accordingly. The matter is remitted to the learned Trial Judge. The learned Trial Judge is directed to take into consideration the amount of compensation deposited by the appellants in the criminal case and for the said purpose, the learned Trial Judge should draw up a fresh decree while correcting the decree in terms of the order of this Court. The learned Trial Judge shall, while preparing a fresh decree, take into consideration the various dates on which the diverse amounts had been deposited by the appellants and calculate the interest payable thereupon. The appeal is allowed to the aforementioned extent.

Summary

Issues involved:
1. Adjustment of amount received in a criminal proceeding in a suit for recovery of money on a dishonored cheque.

Detailed Analysis:
1. The plaintiff filed a suit against the defendants for recovery of money on a dishonored cheque. The defendants had deposited amounts in a criminal proceeding related to the same issue. The core question was whether the amount received in the criminal proceeding should be adjusted in the civil suit.

2. The Trial Court decreed the suit in favor of the plaintiff without considering the amount deposited by the defendants in the criminal proceedings. The appellants argued that the courts erred in decreeing the suit without adjusting the amount already paid in the criminal case.

3. The plaintiff contended that the Trial Court and High Court were correct in decreeing the suit without considering the criminal case's amount. It was argued that the pendency of a criminal matter should not impede a civil suit.

4. The judgment discussed the duty of civil courts to consider amounts paid or recovered as compensation in criminal cases related to the same matter. The court emphasized the need to adjust the amounts deposited in criminal and civil proceedings to avoid double recovery by the plaintiff.

5. The judgment referred to relevant legal provisions, including Section 357 of the Code of Criminal Procedure, which empower courts to direct compensation payments. It highlighted the obligation of civil courts to consider amounts paid in criminal cases when awarding compensation in subsequent civil suits.

6. The judgment cited precedents to support the principle that compensation awarded should be reasonable and not arbitrary. It emphasized the need for courts to assess the accused's capacity to pay compensation and avoid imposing excessive amounts.

7. The Supreme Court modified the impugned judgment and directed the Trial Court to consider the amounts deposited by the defendants in the criminal case. The court ordered the Trial Judge to draw up a fresh decree, taking into account the dates and amounts deposited, and calculate the interest payable accordingly.

8. The appeal was allowed in part, with no costs awarded in the case. The judgment clarified the legal principles governing the adjustment of amounts received in criminal proceedings in civil suits for recovery of money on dishonored cheques.