2022 (4) TMI 1247 - HC - Indian Laws

Dishonor of Cheque - Seeking recovery of the interim compensation awarded to the petitioner, from the estate of a deceased accused - accused died before the conclusion of the trial - acquittal of the accused - Section 143A of NI Act - HELD THAT - By operation of Section 70 of the Indian Penal Code, 1860 any unpaid fine may be levied at any time within six years after the passing of the sentence, and the death of the accused does not discharge from the liability any property which would, after his death, be legally liable for his debts - The combined reading of the relevant provisions makes it clear that where the compensation has been directed to be paid upon conclusion of a proceeding under Section 138 of the Negotiable Instruments Act, 1881, the legal heirs who have inherited the estate of the deceased are liable to repay the fine or compensation amount when an application under Section 421 of the Code of Criminal Procedure, 1973, has been filed. In the case M. ABBAS HAJI VERSUS T.N. CHANNAKESHAVA 2019 (9) TMI 1497 - SUPREME COURT the Supreme Court ultimately allowed the application filed by the legal heirs of the deceased to prosecute his appeal - The position of law will be, however, different in a case where the interim compensation has been granted under Section 143A of the Negotiable Instruments Act, 1881. Section 143A (1) of the Negotiable Instruments Act, 1881, speaks of payment of interim compensation. Section 143A (1) is independent of Section 143A (4) of the Negotiable Instruments Act, 1881. A bare reading of Section 143A (4) makes it clear that in the event the drawer of the cheque is acquitted, the interim compensation paid in terms of Section 143A (1) has to be repaid together with the prevalent bank interest - The order of interim compensation is, therefore, dependent on the outcome of the trial. There is no finality attached to such interim order of compensation and no right is crystallized in favour of the complainant by dint of such interim order of compensation. The order of interim compensation, which is passed in the aid of final compensation, will cease to exist when the trial comes to an end due to the death of the accused since in such eventuality there cannot be any scope to adjudicate the innocence or the guilt of the accused in the trial. If in case of death of an accused the compensation awarded under Section 138 of the Negotiable Instruments Act, 1881 can be recovered from the estate of a deceased accused, but an interim compensation awarded under Section 143A of the said Act cannot be recovered from the estate of a deceased accused, who died before the conclusion of the trial. Revisional application dismissed.

Summary

Issues Involved:
1. Whether the compensation awarded under Section 138 of the Negotiable Instruments Act, 1881 can be recovered from the estate of a deceased accused.
2. Whether an interim compensation awarded under Section 143A of the Negotiable Instruments Act, 1881 can be recovered from the estate of a deceased accused who died before the conclusion of the trial.

Detailed Analysis:

Issue 1: Recovery of Compensation under Section 138 from the Estate of a Deceased Accused

The court examined the applicability of Section 421 of the Code of Criminal Procedure, 1973, and Section 70 of the Indian Penal Code, 1860, in the context of recovering fines and compensation from the estate of a deceased accused. Section 70 of the IPC states, "The death of the offender does not discharge from the liability any property which would, after his death, be legally liable for his debts." This provision, along with Section 25 of the General Clauses Act, 1897, which extends the applicability of Sections 63 to 70 of the IPC to fines imposed under any Act, including the Negotiable Instruments Act, 1881, supports the recovery of compensation from the deceased's estate.

The court referenced the Supreme Court's decision in Bondada Gajapathi Rao v. State of A.P., which held that legal representatives could continue proceedings if the sentence affects the property. The court concluded that compensation awarded under Section 138 of the Negotiable Instruments Act, 1881, could be recovered from the estate of a deceased accused, as the liability persists posthumously.

Issue 2: Recovery of Interim Compensation under Section 143A from the Estate of a Deceased Accused

The court analyzed Section 143A of the Negotiable Instruments Act, 1881, which allows for interim compensation during the trial process. Section 143A(4) specifies that if the drawer of the cheque is acquitted, the interim compensation must be repaid with interest. This provision implies that interim compensation is contingent upon the trial's outcome and does not confer a permanent right to the complainant.

The court noted that the interim compensation order is dependent on the trial's conclusion and lacks finality. Since the trial cannot adjudicate the accused's guilt or innocence posthumously, the interim compensation order ceases to exist upon the accused's death. Therefore, interim compensation awarded under Section 143A cannot be recovered from the estate of a deceased accused who died before the trial's conclusion.

The court dismissed the revisional application, affirming the lower court's order that interim compensation could not be executed against the deceased's estate. The court emphasized that the statutory provisions and judicial precedents support this interpretation, ensuring that interim compensation remains provisional and contingent on the trial's outcome.

Conclusion:

The court concluded that while compensation awarded under Section 138 of the Negotiable Instruments Act, 1881, can be recovered from the estate of a deceased accused, interim compensation awarded under Section 143A cannot be recovered if the accused dies before the trial concludes. The revisional application was dismissed, upholding the lower court's decision.