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2022 (6) TMI 1033 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - Whether in the appeal preferred by the accused the Appellate Court can enhance the punishment by awarding compensation which the trial Court has conspicuously omitted to award and the complainant had not preferred any appeal seeking compensation? - HELD THAT - Sub Section (1) of Section 357 of Cr.P.C. which empowers the Court to order part or whole of the fine amount pay to the person who sustained loss and Sub-Section (4) of Section 357 of Cr.P.C., specifically say thus power may be exercised also by the Appellate Court and Court of revision, such exercise of power by the Appellate Court subject to Section 386(b)(iii) of Cr.P.C. only. Examine the wordings of Section 138 of Negotiable Instrument Act, no doubt fine can be imposed twice the amount of the cheque. In exercise of power under Section 357 of Cr.P.C. from the fine amount, Courts can order to pay compensation. In this case, while the Trial Court has consciously imposed fine of Rs. 5,000/- and no compensation ordered, in the appeal by the accused, no power vested on the Appellate Court to enhance the sentence ordering compensation in the absence of appeal by the complainant. The compensation is not an independent component under Section 138 of Negotiable Instruments Act which is a special Act. It should be part of the fine amount and fine is part of sentence. It is a trite principle of law that, in appeal preferred by the accused person sentence cannot be enhanced. Therefore, the order of the Appellate Court perverse, contrary to law, hence liable to be set aside. The Bail bond stands cancelled. The petitioner is directed to surrender before the trial Court to undergo the remaining period of sentence as modified - the Criminal Revision is partly allowed.
Issues Involved:
1. Validity of statutory notice service. 2. Privity of contract and wherewithal to advance the loan. 3. Misuse of blank cheque. 4. Enhancement of punishment by the Appellate Court. Detailed Analysis: 1. Validity of Statutory Notice Service: The petitioner argued that the statutory notice was not served, which is a crucial requirement under Section 138 of the Negotiable Instruments Act, 1881. However, evidence presented by P.W.2, the Postal Inspector, confirmed that the notice was delivered to the petitioner on 30.05.2007. Despite the petitioner's claim of non-receipt, the courts found that the petitioner had received the summons and appeared in court, thus negating the argument of improper notice service. 2. Privity of Contract and Wherewithal to Advance the Loan: The petitioner contended there was no privity of contract between him and the respondent, asserting that the cheque was issued to a third party, S. Nagarajan, and not to the respondent. The respondent, however, provided evidence of withdrawing Rs. 5,00,000/- from his bank account and Rs. 4,00,000/- from his wife's savings to advance the loan. The courts accepted this evidence, concluding that the respondent had the financial capability to lend Rs. 9,00,000/-. 3. Misuse of Blank Cheque: The petitioner claimed that the cheque in question was a blank cheque given to S. Nagarajan, which was misused by the respondent. The courts rejected this defense due to a lack of corroborative evidence. The petitioner's argument that the cheque was not issued for a legally enforceable debt was not substantiated by any credible evidence, leading the courts to uphold the respondent's claim. 4. Enhancement of Punishment by the Appellate Court: The Appellate Court's decision to award compensation of Rs. 9,00,000/- in addition to the trial court's sentence was challenged. The High Court found this enhancement to be beyond the Appellate Court's power, as it contravened Section 386(b)(iii) of Cr.P.C., which prohibits enhancing the sentence in an appeal filed by the accused. The High Court cited the Supreme Court judgment in Kalamani Tex and another -v- P. Balasubramanian, emphasizing that compensation cannot be independently awarded without it being part of the fine imposed by the trial court. Conclusion: The High Court partially allowed the revision petition, modifying the sentence from one year to six months of simple imprisonment while maintaining the fine of Rs. 5,000/-. The compensation awarded by the Appellate Court was set aside as it was deemed an enhancement of the sentence, which is not permissible in an appeal by the accused. The petitioner was directed to surrender to undergo the remaining period of the modified sentence, with the period already served to be set off under Section 428 of Cr.P.C.
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