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TMI Blog2021 (11) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 138 of N.I.Act and imposes punishment of simple imprisonment for a term of six months. However, his grievance is that the respondent-accused should have also been awarded fine sufficient enough to meet the liability of the cheque issued by him which later on was dishonoured. It is, thus, submitted that payment of compensation of Rs. 2.00 lac, to be paid to the petitioner in terms of the impugned order, is only one fifth (1/5th) of the value of the cheque. It is contended by learned counsel for the petitioner that the complaint filed by the petitioner under Section 138 read with Section 142 of N.I. Act was in respect of cheque issued by the respondent-accused for an amount of Rs. 10.00 lac, which, on presentation in the Bank, was returned for want of sufficient funds in the account of the respondent. It is, thus, submitted that once the respondent appeared before the trial Court and admitted the liability, the trial Court should have exercised its discretion to impose minimum fine of Rs. 30.00 lac and ordered payment of same to the petitioner by way of compensation. 3 In response to the notice issued, the respondent has entered appearance through Mr. Syed Ansar Advocate, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque, within fifteen days of the receipt of the said notice. Explanation- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability". 6 As is apparent from a bare reading of Section 138 of N. I. Act reproduced above, the Criminal Court after convicting the accused, is empowered to impose punishment of imprisonment for a term, which may extend to two years, or fine which may extend to twice the amount of cheque, or both. The trial Court is, thus, given the discretion to impose the sentence of imprisonment or fine or both. 7 At this stage, it would be appropriate to recall the observations of Hon'ble Supreme Court made in the case of Assistant Commissioner, Assessment-II and ors vs. M/S Velliappa Textiles Ltd., and another, 2003 11 SCC 406, which read thus: "35. ......... Where the legislature has granted discretion to the court in the matter of sentencing, it is open to the court to use its discretion. Where, however, the legislature, for reasons of policy, has done away with this discretion, it is not open to the court to impose only a part of the sentence prescribed by the legislature, for that would amount re-writing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of dishonour of cheques. While the possibility of imprisonment up to two years provides a remedy of a punitive nature, the provision for imposing a fine which may extend to twice the amount of the cheque serves a compensatory purpose. What must be remembered is that the dishonour of a cheque can be best described as a regulatory offence that has been created to serve the public interest in ensuring the reliability of these instruments. The impact of this offence is usually confined to the private parties involved in commercial transactions". (underlined by me) 9 Later in paragraphs (17) and 18 of the said judgment, the Hon'ble Supreme Court, referring to recently published commentary on the topic of Section 138 of N.I. Act, made very apt observations. It was noticed by the Hon'ble Supreme that Unlike other forms of crime, the punishment for commission of offence under Section 138 of N. I. Act is not a means of seeking retribution, but is more a means to ensure payment of money and, therefore, in respect of offence of dishonor of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect. For ready reference, the observations o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court did so, it committed no jurisdictional error....." 11 This Court in its judgment rendered in the case of Abdul Hamid Mir v Tariq Ahmad Khan, (561-A CrPC No. 124/2015, decided on 20.02.2018) also made the similar observations. 12 From a reading of provisions of Section 138 of N. I. Act in the context of laudable object sought to be achieved by Chapter XVII of N.I Act, it is abundantly clear that the Criminal Court while convicting an accused for commission of offence under Section 138 of N.I. Act, cannot ignore the compensatory aspect of remedy and the compensatory aspect can only be given due regard if the sentence imposed is at least commensurate to the amount of cheque, if not more, so that this fine, once imposed, can be appropriated towards payment of compensation to the complainant by having resort to Section 357 of Cr.P.C. Before we proceed, it would be appropriate to set out the provisions of Section 357 as well. "357. Order to pay compensation-(1) When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment, order the whole or any part of the fine recovered to be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stage, I would like to refer to the Judgment of Supreme Court in the case of Suganthi Suresh Kumar vs Jagdeeshan 2002 2 SCC 420, in paragraph (12) whereof, it is held thus: "The total amount covered by the cheques involved in the present two cases was Rs. 4,50,000. There is no case for the respondent that the said amount had been paid either during the pendency of the cases before the trial court or revision before the High Court or this Court. If the amounts had been paid to the complainant there perhaps would have been justification for imposing a flee-bite sentence as had been chosen by the trial court. But in a case where the amount covered by the cheque remained unpaid it should be the look out of the trial Magistrates that the sentence for the offence under Section 138 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be allowed to take dishonour of the cheque issued by him light heartedly. The very object of enactment of provisions like Section 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount at lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the traditional view that the criminal proceedings are for imposing punishment on the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a `victim' in the real sense, but is a well-to-do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided". 19 In view of the legal position now well settled, it cannot be contended that while imposing sentence under Section 138 of N.I.Act, the Court should exercise its discretion in imposing fine by having regard to Section 357 (3) of Cr.P.C. Rather, the Criminal Court should bear in mind the laudable object of engrafting Chapter XVII containing Section 138 to 142 of NI Act and give priority to the compensatory aspect of remedy. 20 Indisputably, the Legislature has given discretion to the Magistrate to impose a sentence of fine which may extend to double the amount of cheque and, therefore, the sentence of fine whenever imposed by the Criminal Court upon conviction of accused under Section 138 of N.I.Act must be sufficient enough to adequately compensate the complainant. The amount of cheque and the date from which the amount under the cheque has become payable along with payment of reasonable interest may serve as good guide in this regard. To be consistent and uniform, it is always advisable to impose a fine equivalent to the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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