Coming then to the question whether the additional
amount which the High Court has directed the appellant to
pay could be levied in lieu of the sentence of imprisonment,
we must keep two significant aspects in view. First and
foremost is the fact that the power to levy fine is
circumscribed under the statute to twice the cheque amount.
Even in a case where the Court may be taking a lenient view
in favour of the accused by not sending him to prison, it
cannot impose a fine more than twice the cheque amount.
That statutory limit is inviolable and must be respected. The
High Court has, in the case at hand, obviously overlooked the
statutory limitation on its power to levy a fine. It appears to
have proceeded on the basis as though payment of
compensation under Section 357 of CrPC is different from the
power to levy fine under Section 138, which assumption is
not correct.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1651 OF 2013
Somnath Sarkar Vs Utpal Basu Mallick & Anr.
VIKRAMAJIT SEN, J.
Citation; 2013(4) crimes 606 SC
Leave granted. The Appellant before us makes what is
essentially a mercy plea – to reduce the sum of Rs.80,000/- imposed
on him by way of compensation in lieu of the six months sentence of
incarceration imposed by the Metropolitan Magistrate, Calcutta.
The Appellant has admittedly issued a cheque in favour of the
Respondent No.1-complainant for a sum of Rs.69,500/-, which
cheque on presentation was dishonourned with the endorsement
‘insufficient funds’.
After due compliance with the statutory
provisions contained in the Negotiable Instruments Act, 1881 (for
short,
‘N.I.
Act’)
prosecution
was
commenced
and
the
aforementioned punishment under Section 138 thereof came to be
passed. The payment of compensation amounting to Rs.80,000/-
has admittedly been received by the complainant. The Appellant
preferred an appeal to the Additional District & Sessions Judge,
Calcutta who by judgment dated 5.7.2004 dismissed the appeal and
ordered the Appellant to surrender within 15 days.
In these
circumstances, Criminal Revision Record No.2447 of 2004 was
filed in the High Court of Calcutta which was pleased to substitute
the six months’ sentence by an additional payment of Rs.69,500/-.
C.R.R. No.2447 of 2004 was heard and decided along with C.R.R.
No.2865 of 2004 also filed by the Appellant.
Accordingly, as
against the cheque amount of Rs.69,500/- the Appellant is liable to
the extent of Rs.1,49,500/-. Faced with the prospects of jail the
Appellant had earlier agreed to payment of the additional sum of
Rs.80,000/- and for these reasons his plea for reduction thereto was
turned down by the High Court in the impugned order.
The
Appellant was directed to pay a sum of Rs.19,500/- by May 31,
2011 and the balance of Rs.50,000/- in five equal instalments
thereafter. Unfortunately, despite repeated readings of the Orders
and related documents, the total liability of the Appellant is not clear
as also the payments made till date.
2.
Although the learned counsel for the complainant has
appeared before us and has endeavoured to persuade us to uphold
the impugned order, we find it unnecessary to hear him since the
complainant has indubitably already received the sum of the
dishonourned
cheque
alongwith
the
compensation
thereon
aggregating Rupees Eighty Thousand.
3.
It seems to us that since the Appellant has already faced
prosecution in the Magistracy in which he presented virtually no
defence, and has thereafter filed an appeal before the Sessions
Court, and subsequently two Revisions before the High Court, the
ends of justice will be met, were he be directed to pay a sum of
Rs.20,000/- only, in default, of which he would be liable to undergo
the punishment of simple imprisonment for a term of six months as
imposed by the aforementioned Magistrate.
The said payment
should be made within eight weeks.
4.
As already expressed, the language employed by the High
Court in the impugned order raises a doubt as to the total liability of
the Appellant. A perusal of the sentence passed by the Trial Court
as well as the Sessions Judge while dismissing the Appeal also does
not completely clarify the position.
The cheque amount is
Rs.69,500/- and in this regard a sum of Rs.80,000/- has been
directed towards compensation which, by virtue of Section 357(3),
Code of Criminal Procedure (Cr.P.C.) would be receivable by the
complainant.
It appears that this sum of Rs.80,000/- has been
received by the complainant. The use of the word, ‘additional sum’
in the impugned order has led to considerable confusion. To put the
matter finally at rest, we hold that the total compensation payable
under Section 138 of the N.I. Act read with Section 357(3), Cr.P.C.
is Rs.80,000/-. i.e., the cheque amount of Rs.69,500/- together with
Rs.10,500/- which may be seen as constituting interest on the
dishonoured cheque. In the arguments addressed before us there
appears to be no controversy that this sum has been duly paid to the
Respondent-complainant. A reading of the impugned order appears
to indicate that the payment of further sum of Rs.69,500/-, in the
instalments indicated in that order would be over and above the said
sum of Rs.80,000/-. This would violate Section 138 of the N.I. Act
inasmuch as it would exceed the double of the cheque amount. This
leads us to conclude that the intention of the High Court was that
upon deposit/payment of the further sum of Rs.69,500/- (in addition
to the earlier sum of Rs.80,000/-), the sentence of imprisonment for
six months would stand withdrawn.
Learned counsel for the
Appellant has fervently submitted that the Appellant is a man of
limited financial means and this position has not been controverted.
Palpably, the convict has filed appeals all the way to the Apex Court
which would have entailed further expenses of no mean measure.
We think that with the receipt of Rs.80,000/-, the complainant has
received compensation for the dishonoured cheque as per the
adjudication of the Trial Court. In these circumstances, any further
payment would be in the nature of fine. Accordingly, we clarify that
the Appellant must pay a sum of Rs.80,000/- receivable by the
complainant within four weeks from today, if not already paid. The
Appellant is also sentenced to payment of a fine of Rs.20,000/-,
payable within eight weeks from today, and on the failure to make
this payment, would be liable for imprisonment for six months. The
Appeal is allowed in these terms.
.................................J
.
[T.S. THAKUR]
.........................J.
[VIKRAMAJIT SEN]
New Delhi
October 07, 2013
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1651 OF 2013
(Arising out of S.L.P. (Crl.) No.6191 of 2011)
Somnath Sarkar
Appellant
...
Versus
Utpal Basu Mallick & Anr.
JUDGMENT
...Respondents
T.S. THAKUR, J.
I have had the advantage of going through the order
proposed by my esteemed Brother Vikramajit Sen, J. While I
entirely agree that the order passed by the High Court
directing payment of a sum of Rs.69,500/- over and above
Rs.80,000/- already paid under the orders of the Court to
the complainant towards compensation needs to be modified
to bring the same in tune with Section 138 of Negotiable
Instruments Act, 1881, I would like to add a few words of my
own in support of that view. Before I do that, I may briefly
set out the factual backdrop in which the appellant came to
be prosecuted and convicted under the provision mentioned
above.
The appellant, who is the proprietor of M/s Tarama
Medical Centre, Tarakeswar, Hooghly, issued a cheque in
favour of the respondent/complainant bearing no.419415
dated 6th September, 1999 drawn on SBI, Tarakeswar Branch
for Rs.69,500/- towards discharge of existing liabilities. When
the cheque was presented by the complainant through his
banker on 6th September, 1999 it was dishonoured for
“insufficient funds”, which dishonour was communicated to
the complainant on 7th October, 1999. The complainant
respondent issued a demand notice, which was received by
the accused appellant within the prescribed limitation period.
However, since the accused failed to repay the amount within
time, the complainant filed a complaint under Section 138 of
the Negotiable Instruments Act, 1881 on 9th December,
1999.
The
Metropolitan
Magistrate,
6th
Court,
Calcutta
convicted the appellant for the offence under Section 138,
Negotiable Instruments Act and sentenced him to six months
simple
imprisonment
and
to
pay
compensation
of
Rs.80,000/- under Section 357(3) CrPC vide order dated 10 th
December, 2003 in Case No.C-4490/99. Both the conviction
and sentence were upheld by the Additional District &
Sessions Judge of the Fast Track Court in appeal vide order
dated 5th July, 2004. In a revision petition filed against the
said two orders, the High Court upheld the conviction, but
imposed an additional fine of Rs.69,500/- (cheque amount)
in lieu of six months simple imprisonment awarded by the
Metropolitan Magistrate.
That the appellant has paid the
compensation amount of Rs.80,000/- in instalments of
Rs.30,000/- and Rs.50,000/- is not disputed before us and is
evidenced by an affidavit dated 20th November, 2006 filed in
CRR No.2447 of 2004 before the Calcutta High Court besides
a receipt dated 14th February, 2008 respectively, which are
on record.
The only question that falls for our determination in the
above backdrop is whether the High Court was justified in
directing payment of an additional fine of Rs.69,500/- which
happens to be the cheque amount also, having regard to the
fact that the appellant has already paid the sum of
Rs.80,000/- to the complainant towards compensation in
obedience to the order made by the Metropolitan Magistrate.
There is no gainsaying that the High Court could have
sentenced the appellant to imprisonment extending up to
two years and/or to payment of fine equivalent to twice the
cheque amount. This is evident from the provisions of
Section 138 which reads as under:
“138. Dishonour of cheque for insufficiency,
etc., of funds in the account. Where any cheque
drawn by a person on an account maintained by him
with a banker for payment of any amount of money
to another person from out of that account for the
discharge, in whole or in part, of any debt or other
liability, is returned by the bank unpaid. either
because of the amount of money standing to the
credit of that account is insufficient to honour the
cheque or that it exceeds the amount arranged to be
paid from that account by an agreement made with
that bank, such person shall be deemed to have
committed an offence and shall, without prejudice.
to any other provision of this Act, be punished with
imprisonment for a term which may extend to one
year, or with fine which may extend to twice the
amount of the cheque, or with both: Provided that
nothing contained in this section shall apply unless-
(a) the cheque has been, presented to the bank
within a period of six months from the date on which
it is drawn or within the period of its validity,
whichever is earlier;
(b) the payee or the holder in due course. of the
cheque as the case may be, makes a demand for
the payment of the said amount of money by giving
a notice, in writing, to the drawer of the cheque,
within fifteen days of the receipt of information by
him from the bank regarding the return of the
cheque as unpaid; and
(c) the drawer of such cheque fails to make the
payment of the said amount of money to the payee
or, as the case may be, to the holder in due course
of the cheque, 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.”
(emphasis supplied)
In as much as the High Court set aside the sentence of
six months simple imprisonment awarded to the appellant
there is no quarrel nor any challenge mounted before us.
That part of the order could be assailed by the complainant
who has not chosen to do so. Whether or not the High Court
was justified in setting aside the sentence of imprisonment
awarded to the appellant is, therefore, a non-issue before us.
Having said that we have no hesitation in adding that the
High Court may have indeed been justified in setting aside
the sentence of imprisonment awarded to the appellant in
the facts and circumstances of the case. We say so having
regard to a three-Judge Bench decision of this Court in
Damodar S. Prabhu v. Syed Babalal H. (2010) 5 SCC
663 where this Court briefly examined the object sought to
be achieved by the provisions of Section 138 and the
purpose underlying the punishment provided therein. This
Court has held that unlike other crimes, punishment in
Section 138 cases is meant more to ensure payment of
money rather than to seek retribution. The Court said:
“17....Unlike that for other forms of crime, the
punishment here (in so far as the complainant is
concerned) is not a means of seeking retribution,
but is more a means to ensure payment of money.
The complainant's interest lies primarily in
recovering the money rather than seeing the drawer
of the cheque in jail. The threat of jail is only a
mode to ensure recovery. As against the accused
who is willing to undergo a jail term, there is little
available as remedy for the holder of the cheque.”
(emphasis supplied)
This Court also took note of the number of cases
involving dishonor of cheques choking the criminal justice
system of this country, especially at the level of the
Magisterial Courts, and held that dishonor of cheque being a
regulatory offence, aimed at ensuring the reliability of
negotiable instruments, the
provision for imprisonment
extending up to two years was only intended to ensure quick
recovery of the amount payable under the instrument. The
following passages from the decision are in this regard
apposite:
“4...It is quite evident that the legislative intent was
to provide a strong criminal remedy in order to deter
the worryingly high incidence 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 extent
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.
5. Invariably, the provision of a strong criminal
remedy has encouraged the institution of a large
number of cases that are relatable to the offence
contemplated by Section 138 of the Act. So much
so, that at present a disproportionately large
number of cases involving the dishonour of cheques
is choking our criminal justice system, especially at
the level of Magistrates' Courts. As per the 213th
Report of the Law Commission of India, more than
38 lakh cheque bouncing cases were pending
before various courts in the country as of October
2008. This is putting an unprecedented strain on our
judicial system.”
(emphasis supplied)
We do not consider it necessary to examine or
exhaustively enumerate situations in which Courts may
remain content with imposition of a fine without any
sentence of imprisonment. There is considerable judicial
authority for the proposition that the Courts can reduce the
period of imprisonment depending upon the nature of the
transaction, the bona fides of the accused, the contumacy of
his conduct, the period for which the prosecution goes on,
the amount of the cheque involved, the social strata to which
the parties belong, so on and so forth. Some of these factors
may indeed make out a case where the Court may impose
only a sentence of fine upon the defaulting drawer of the
cheque. There is for that purpose considerable discretion
vested in the Court concerned which can and ought to be
exercised in appropriate cases for good and valid reasons.
Suffice it to say that the High Court was competent on a
plain reading of Section 138 to impose a sentence of fine
only upon the appellant. In as much as the High Court did so,
it committed no jurisdictional error. In the absence of a
challenge to the order passed by the High Court deleting the
sentence of imprisonment awarded to the appellant, we do
not consider it necessary or proper to say anything further at
this stage.
Coming then to the question whether the additional
amount which the High Court has directed the appellant to
pay could be levied in lieu of the sentence of imprisonment,
we must keep two significant aspects in view. First and
foremost is the fact that the power to levy fine is
circumscribed under the statute to twice the cheque amount.
Even in a case where the Court may be taking a lenient view
in favour of the accused by not sending him to prison, it
cannot impose a fine more than twice the cheque amount.
That statutory limit is inviolable and must be respected. The
High Court has, in the case at hand, obviously overlooked the
statutory limitation on its power to levy a fine. It appears to
have proceeded on the basis as though payment of
compensation under Section 357 of CrPC is different from the
power to levy fine under Section 138, which assumption is
not correct.
The second aspect relates precisely to the need for
appreciating that the power to award compensation is not
available under Section 138 of Negotiable Instruments Act. It
is only when the Court has determined the amount of fine
that the question of paying compensation out of the same
would arise. This implies that the process comprises two
stages. First, when the Court determines the amount of fine
and levies the same subject to the outer limit, if any, as is
the position in the instant case. The second stage comprises
invocation of the power to award compensation out of the
amount so levied. The High Court does not appear to have
followed that process. It has taken payment of Rs.80,000/-
as compensation to be distinct from the amount of fine it is
imposing equivalent to the cheque amount of Rs.69,500/-.
That was not the correct way of looking at the matter.
Logically, the High Court should have determined the fine
amount to be paid by the appellant, which in no case could
go beyond twice the cheque amount, and directed payment
of compensation to the complainant out of the same. Viewed
thus, the direction of the High Court that the appellant shall
pay a further sum of Rs.69,500/- does not appear to be
legally sustainable as rightly observed by my erudite Brother
Vikramajit Sen, J. I, therefore, entirely agree with my
Brother’s view that payment of a further sum of Rs.20,000/-
towards fine, making a total fine of Rs.1,00,000/- (Rupees
one lac) out of which Rs.80,000/- has already been paid as
compensation
to
the
complainant,
should
suffice.
The
amount of Rs.20,000/- (Rupees twenty thousand) now
directed to be paid shall not go to the complainant who is, in
our view, suitably compensated by the amount already
received by him.
amount
of
In the event of failure to pay the additional
Rs.20,000/-
the
appellant
shall
undergo
imprisonment for a period of six months. With these words, I
concur with the order proposed by Brother Vikramajit Sen, J.
........................................J.
(T.S. Thakur)
New Delhi
October 7, 2013
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