S.357 CrPC | When Fine Forms Part Of Sentence U/S 138 NI Act, Court Ought To Order Payment Of Compensation From Fine: Kerala HC

The Kerala High Court on Tuesday, while considering a Revision Petition observed that in an offence under Section 138 of the Negotiable Instruments Act, when the Court imposes sentence of imprisonment and fine, it has to order payment of compensation from the amount of fine as provided under Section 357(1)(b) of CrPC. 

Justice A. Badharudeen observed:

...in an offence under Section 138 of the N.I Act when the court imposes imprisonment and fine, fine forms part of the sentence. In such cases, the court has to order payment of compensation from the amount of fine as provided under Section 357(1)(b) of Cr.P.C.

The Revision Petition was filed challenging the conviction and sentence imposed against the revision petitioner in a case against him filed under Section 138 of the Negotiable Instruments Act.

The complainant alleged that the accused borrowed Rs.3,50,000 from the complainant as loan and issued a cheque for the said sum with assurance of encashment. But when the cheque was presented for collection, the same was dishonoured for want of sufficient funds. Though legal notice intimating the dishonour and demanding the amount was issued, accused did not pay.

Subsequently, the trial court convicted and sentenced the accused to undergo simple imprisonment for a period of one year and to pay compensation of Rs.3,50,000 to the complainant under Section 357(3) of Cr.P.C and in default of payment of compensation, to undergo simple imprisonment for a period of one year. On appeal, the Sessions Judge also confirmed the conviction and sentence.

The Counsel appearing for the revision petitioner, Adovates Biju C. Abraham and Thomas C. Abraham, sought for modification of the sentence to imprisonment for a day till rising of court and payment of compensation and also for granting of 8 month time for the payment of the compensation.

The Court noted that as per mandate of Section 357 (1)(b) of CrPC when the court imposes sentence of fine or a sentence of which fine forms a part, the court may when passing judgment, order the whole or part of the fine to be paid as compensation for any loss or injury caused by the offence, when compensation, is, in the opinion of the court, recoverable by such person in a civil court.

On the scope of revisional jurisdiction of the High Court under Section 401 of CrPC read with Section 397, the Court observed that if there is non-consideration of any relevant materials or fundamental violation of the principle of law, then only the power of revision would be made available.

In this present case, the Court observed that the Trial Court and the Appellant Court had rightly appreciated the evidence and that the complainant had proved his initial burden, entitling him to get the benefit of presumptions under Section 118 and 139 of NI Act. Though this presumption is rebuttable, the Court observed that in this case the accused did not aduce any evidence. Therefore, the Court held that the lower courts rightly convicted the accused under Section 138 of the NI Act.

Thereby, the Court allowed the Revision Petition in part by modifying the sentence to simple imprisonment for a day till rising of the court and fine of Rs.3,50,000, to be given to the complainant as compensation under Section 357(1)(b) of Cr.P.C.

Case Title: Sanil James v. State of Kerala & Anr. 

Citation: 2022 LiveLaw(Ker) 497

Sec 147 of NI Act | Cheque Bounce Can be Compounded Even After Conviction By Lower Court: Himachal Pradesh HC

Recently, Himachal Pradesh HC stated that the court can proceed to compound the offence even after a recording of conviction by the Lower Courts.

The bench of Justice Sandeep Sharma was dealing with the petition challenging the judgment passed by the Additional Sessions Judge affirming the judgment passed by the trial Court where the petitioner-accused has been held guilty of the offence punishable under S. 138 of the Negotiable Instruments Act.

In this case, The accused borrowed Rs. 3.00 Lakh from the complainant for the sale and purchase of apple. 

The accused issued a cheque amounting to Rs. 3.00 Lakh drawn at State Bank of India Theog, but the fact remains that said cheque, on its presentation, was dishonoured on account of insufficient funds in the account of the accused. 

Since despite having received legal notice, the accused failed to make good the payment within the stipulated time, complainant was compelled to institute proceedings under S. 138 of the Act in the competent Court of law. 

The trial Court held the accused guilty of having committed an offence punishable under S. 138 of the Act.

The issue for consideration before the bench was:

Whether the appellant is liable for the offence punishable under S. 138 of the Negotiable Instruments Act?

High Court stated that “having taken note of the fact that the entire amount of compensation awarded by the trial Court has been agreed to be paid to the complainant, this court sees no impediment in accepting the prayer made on behalf of the accused in the petition for compounding of the offence under S. 147 of the Act.”

The bench also relied upon the case of Damodar S. Prabhu V. Sayed Babalal H., wherein Apex Court has held that the court while exercising power under Section 147 of the Act, can proceed to compound the offence even after a recording of conviction by the courts below.

In view of the above, the High Court allowed the appeal and directed the Additional Chief Judicial Magistrate to release the amount of Rs. 66,000/- in favour of the complainant by remitting the same in his savings bank account.

Case Title: Shri Kantu Ram v. Shri Beer Singh

Bench: Justice Sandeep Sharma 

Citation: CR. REVISION NO. 334 OF 2022