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2022 (4) TMI 1148 - HC - Indian LawsDishonor of Cheque - conversion of fine into compensation under Section 357(3) of Cr.P.C. - HELD THAT - In Negotiable Instruments Act, 1881, there is no separate provision for compensation and for compensation in criminal cases provisions of Section 357 of Cr.P.C. will be attracted. As far as conversion of that fine into compensation under Section 357(3) of Cr.P.C. is concerned, it is illegal because provision of Section 357(3) of Cr.P.C. will come into force only when Court imposes a sentence of which fine does not form a part, but learned Magistrate has not convicted the petitioner for any sentence - In Negotiable Instruments Act, as per provision of Section 138, a Magistrate can punish the accused with imprisonment for a term which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. It is true that as per provisions of Section 29 of Cr.P.C. Judicial Magistrate First Class cannot impose fine of more than ₹ 10,000/-, but in this context amendment of Section 143 dated 6.2.2003 is pertinent by which a provision has been made that in case of any conviction in a summary trial, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of fine exceeding five thousand rupees. In cases under Section 138 of the Negotiable Instruments Act, compensation can be granted only under Section 357 (1)(b) of Cr.P.C. and not under Section 357(3) of Cr.P.C. In view of Section 143 of the Negotiable Instruments Act, conversion of fine into compensation under Section 357(3) of Cr.P.C. is illegal and beyond jurisdiction - revision disposed off.
Issues Involved:
1. Legality of the conversion of fine into compensation under Section 357(3) of Cr.P.C. 2. Applicability of Section 357(1)(b) of Cr.P.C. in cases under Section 138 of the Negotiable Instruments Act. 3. Jurisdiction of the Judicial Magistrate First Class in imposing fines exceeding ?10,000. Issue-wise Detailed Analysis: 1. Legality of the conversion of fine into compensation under Section 357(3) of Cr.P.C.: The petitioner challenged the appellate court's decision, which converted the fine imposed by the trial court into compensation under Section 357(3) of Cr.P.C. The court clarified that Section 357(3) of Cr.P.C. applies only when a court imposes a sentence of which fine does not form a part. Since the trial court had imposed a fine of ?2,50,000/- without sentencing the petitioner, the conversion to compensation under Section 357(3) was deemed illegal. The court emphasized that the trial court's imposition of a fine should invoke the provisions of Section 357(1)(b) of Cr.P.C., which allows compensation for loss or injury caused by the offense. 2. Applicability of Section 357(1)(b) of Cr.P.C. in cases under Section 138 of the Negotiable Instruments Act: The court examined the applicability of Section 357(1)(b) of Cr.P.C. in cases involving the dishonor of cheques under Section 138 of the Negotiable Instruments Act. It was noted that Section 357(1)(b) allows the court to order compensation from the fine imposed for any loss or injury caused by the offense. The court referred to the Supreme Court's judgment in R. Vijayan vs. Baby, which highlighted that the provision for levying a fine linked to the cheque amount renders Section 357(3) virtually infructuous in cheque dishonor cases. The court concluded that compensation in such cases should be granted under Section 357(1)(b) and not under Section 357(3). 3. Jurisdiction of the Judicial Magistrate First Class in imposing fines exceeding ?10,000: The court addressed the jurisdictional issue concerning the Judicial Magistrate First Class's authority to impose fines exceeding ?10,000. It was acknowledged that Section 29 of Cr.P.C. limits the fine a Judicial Magistrate First Class can impose to ?10,000. However, the amendment to Section 143 of the Negotiable Instruments Act allows a Magistrate to impose fines exceeding ?5,000 in summary trials for cheque dishonor cases. The court cited the Supreme Court's judgment in R. Vijayan, which clarified that the ceiling on fines stipulated in Section 29(2) of Cr.P.C. is removed for offenses under Section 138 of the Negotiable Instruments Act, allowing fines up to twice the cheque amount. Conclusion: The court concluded that the appellate court's conversion of the fine into compensation under Section 357(3) of Cr.P.C. was illegal and beyond jurisdiction. The judgment of the appellate court dated 26.8.2010 was set aside, and the judgment of the trial court dated 10.3.2008 was restored. The revision was disposed of accordingly.
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