INTHECOURTOFSHRISANJEEVKUMAR, ADDITIONALSESSIONSJUDGE5,SOUTHEASTDISTRICT, SAKETCOURTS,NEWDELHI CRIMINALAPPEALNo.204315/2016 INTHEMATTEROF: M/[ENTITY] 178,M.G.Road, 4thFloor,Calcutta700007 Throughitspartner Sh.[ENTITY] 2.Sh.[ENTITY], PartnerofM/[ENTITY], R/o747,PBlock, NewAlipore, Culcutta700053 Appellants VERSUS M/sSpentexIndustriesLtd. C/oA60,OkhlaIndustrialAreaPhaseII, NewDelhi110020. Formerlyknownas M/sIndoRamaSynthetics(India)Ltd Respondent Institutedon :04.06.2014 Reservedon :28.04.2018 Pronouncedon :29.08.2018 JUDGMENT
[CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 1 of 25 TheappealhasbeenpreferredunderSection374(3)ofthe CodeofCriminalProcedure,1973(inshort'Code')astheappellantis aggrievedbytheimpugnedjudgmentdated20.03.2014andorderon sentence dated 29.05.2014 passed by the learned Metropolitan Magistrate(NIAct),SouthEastDistrict,SaketCourts,NewDelhiin ComplaintCaseNo.862/1/1999titledas"M/[ENTITY].M/s [ENTITY]", under [SECTION] of the Negotiable InstrumentAct,1881(inshort'NIAct')wherebyaccusedappellant no.1and2hereinwereconvictedforoffenceunderSection138of[ACT] and no substantive sentence was awarded but appellants were directed to pay compensation of Rs. 25,32,325/ jointly to the complainantrespondent and in default of the payment of compensation, appellant no. 2 was directed to undergo simple imprisonmentforsixmonths.
2. Thecaseoftherespondent-complainantisthattheaccused no.1isthefirmofwhichaccusedno.2to4arethepartners. The accusedno.2to4arefullyincontrol,inchargeandresponsiblefor theconductofthedaytodaybusinessaffairsoftheaccusedno.1 firm,thustheaccusedno.2to4arejointlyandseverallyliableforthe actsdoneforthefurtheranceforthebusinessofaccusedno.1.Allthe businessactivitiesrelatedwiththeadministrationoftheaccusedno.1 [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 2 of 25 areconductedwiththeknowledgeoftheaccusedno.2to4asallof themareatthetopofthehierarchyoftheofficersresponsibleforthe management of theaccused No.1. All the accused no.2 to4 are vicariouslyliableoffencescommittedbytheactsoftheaccusedno.1 firm.
3. Further case of complainant is that the complainant company is manufacturing Filament Yarn (POY, DTY), Polyester StapleFibre(PSF),Spun/BlendedYarnetcandaccusedhadbeen placingordersforthepurchaseofSpunYarnaspertheirrequirement with the complainant company, who supplied the same as per the requirementoftheaccusedfromtimetotimesinceOctober,1995on mutuallyacceptabletermsandconditionsofsale.
4. The further case of the complainant is that complainant companyismaintainingregularbooksofaccountsinthenameofthe accusedfirm. Aspertheagreedtermsandconditionsofsale,the accusedno.2to4arerequiredtomakethepaymentofthematerial supplied to the accused no. 1 by the complainant company immediatelyonreceiptofthematerial,failingwhichalltheaccused areliabletopayinterestonthedelayedpayment@18%perannumin casepaymentisdelayedupto30days,@21%perannumincase [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 3 of 25 paymentisdelayedupto45days,@24%perannumincasepayment isdelayedupto60daysand@30%perannumincasepaymentis delayedbeyond90days.
5. The further case of the complainant is that the material suppliedbythecomplainantcompanyhasbeendulyreceivedbythe accusedattheirdesireddestinationinCalcuttaonvariousoccasion. Alloftheaccusedthoughhaveadmittedandacknowledgedthetotal liabilityofdebtpayablebytheaccusedinlieuofthematerialreceived bytheaccusedfromthecomplainantcompany,buthavefailedtopay theoutstandingdebtwithinteresttothecomplainantcompanyinspite ofseveralrequestsanddemand. Thedetailsoftheinvoicesagainst whichgoodshavebeensuppliedbythecomplainantcompanytothe accusedno.2to4onbehalfoftheaccusedno.1areasfollows: InvoiceNo. Date InvoiceAmount(Rs.) SL1800907 22.06.98 87771 SL1800908 22.06.98 77653 SL1800909 22.06.98 81347 SL1800910 22.06.98 81544 SL1800911 22.06.98 74546 SL1800912 22.06.98 74122 SL1800913 22.06.98 20395 SL1800914 22.06.98 21694 [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 4 of 25 SL1800915 22.06.98 91940 SL1800971 24.06.98 75152 SL1800972 24.06.98 394569 SL1800973 24.06.98 166718
6. Thefurthercaseofthecomplainantisthataccordingtothe booksofaccountsregularlymaintainedbythecomplainantcompanya sumofRs.11,99,016/isdueandpayablebytheaccusedasprincipal amountason31.12.1998.Besidestheprincipalamount,theaccused are also liable to pay interest of Rs.1,62,924/ calculated upto 31.12.1998attheagreedrateasstatedhereinaboveonaccountof delayinpayments.Alltheaccusedassuch,jointlyandseverally,are liabletopay,ason31.12.1998,atotalsumofRs.13,61,940/.Which includestheprincipalamountaswellasinterestofRs.1,62,924/.
7. Thecomplainantrespondentfiledcomplaintunder[SECTION]readwithSections141and142oftheNIActbeforethelearned AdditionalChiefMetropolitanMagistrateagainsttheappellantsand twootherpersonsandsamewasassignedtothelearnedMetropolitan Magistrate/TrialCourt.
8. Notice under [SECTION] of the Code for the offence punishableunderSectionof138oftheNIActorparticularsofthe [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 5 of 25 said offence was served/stated by learned Metropolitan Magistrate. The complainantrespondent examined one witness i.e., [ENTITY].Thestatementofthe appellantsunderSection313oftheCodewererecordedbythelearned Metropolitan Magistrate on 03.03.2011. Appellants examined appellantno.2SushilKumarBarasiyaasDW1insupportoftheir case/defence. In respect of evidence of DW1, it is submitted by learned Counsels for both the parties that after partly cross examinationofDW1,defenceevidencewasclosedandafterclosing thedefenceevidence,theappellantswenttotheHon'bleDelhiHigh CourtandHon'bleDelhiHighCourthadallowedtheapplication/ petitionforcrossexaminationwithcostbutcostwasnotpaidbythe appellantsandthereforedefenceevidencewasfurtherclosedwithout completingthecrossexaminationoftheDW1.
9. Learned counsel for the appellants has submitted that no businessdealingoftheappellantsandtherespondenthasbeenproved bytherespondentandnobooksofaccounthadbeenproducedbythe respondent.Theappellantsneverdealtinpolyesteryarn.Thereisno explanationwhythereisdifferenceinfigureofRs.13,61,940/.There isnofindingthatgoodsweredeliveredandthatgoodswerereceived bytheappellants.ThejudgmentpassedbythelearnedCivilJudge, SeniorDivision,Howrahhasrelevanceuponthecriminalproceedings.
[CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 6 of 25
10. Learnedcounselfortheappellantshasfurthersubmittedthat oneJoyeshGManeckwhowasthebrokerofthecomplainant,had purchasedtwotrucksofpolyestersyarnsfromthecomplainant.As Mr.[ENTITY],thetruckscouldnot enterKolkataandMr.Joyeshrequestedtolendaccusedfirm'ssales taxregistrationandfirmnamesothatthetruckscouldenterKolkata. Mr.JoyeshissuedfivepostdatedchequestoaccusedfirmtotalingRs. 12to13Lacs.Therefore,theinvoiceshereinwereissuedinthename ofM/[ENTITY]/complainantandthechequeswereissuedto thecomplainantsubjecttothestrictconditionthatMr.[ENTITY] willmakethepaymenttotheaccusedno.1andonlyafterthesaid payment,thechequesissuedtothecomplainantwouldbehonoured. However,thechequesgivenbyMr.[ENTITY] the accused no. 1 has filed a civil suit before learned Civil Judge (SeniorDivision),Hawrah.Hehasplacedrelianceuponthedecisions, namely,[PRECEDENT]; [PRECEDENT] and [PRECEDENT]
11. Percontra,learnedcounselforrespondenthasopposedthe appealstatingthattheappellantshadadmittedintheappealregarding [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 7 of 25 theirliability.SaidJoyeshG.Maneckhadnotbeenexaminedbythe appellants.RespondentwasnotpartyinthesaidjudgmentEx.DW 1/ApassedbythelearnedCivilJudge,SeniorDivision,Hawrahand wasnotpartyinrespectofproceedingsbeforeHon'bleCalcuttaHigh Court.
12. CW1ShankarKumarKarjeeisauthorizedrepresentativeof the respondentcomplainant company. In respect of issuance of cheques in question in discharge of liability, he deposed that the complainantcompanyisengagedinthebusinessofthemanufacturing Filament,Yarn(POYDTY),PolyesterStapleFiber(PSF)andSpun/ BlendedYarn.Theaccusedno.1isthefirmofwhichtheaccusedno. 2 to 4 are partners and they are fully in control, in charge and responsiblefortheconductofthedaytodaybusinessaffairsofthe accused no. 1. All the business activities related with the administrationoftheaccusedno.1areconductedwiththeknowledge ofaccusedno.2to4asallofthemareatthetopofthehierarchyof theofficersresponsibleforthemanagementoftheaccusedno.1.The accusedhadbeenplacingordersforthepurchaseofspunyarnasper the requirement of the complainant who supplied the same to the accusedfromtimetotimesinceOctober1995onmutuallyacceptable terms and conditioners of sale. The material supplied by the complainantcompanyhadbeendulyreceivedbytheaccusedattheir [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 8 of 25 desireddestination.12invoicesfromNo.SL1800907toSL1800915 andSL1800971toSL1800973againstwhichgoodsweresuppliedby thecomplainantcompanytotheaccusedvideexhibitsEx.CW1/4to CW1/15. The accused in discharge of liability of debt issued two cheques in favour of the complainant company bearing no.777464 dated30.07.98forRs.6,20,177.18andno.777465dated04.08.98for Rs.6,45,985.58drawnontheCanaraBank,BrabourneRoad,Kolkata. ThesaidchequeshavebeenexhibitedasEx.CW1/16andEx.CW1/17 respectively.
13. Hence, the CW1 has clearly deposed regarding placing ordersforthepurchaseofthespunyarnaspertherequirementofthe complainantandsupplyingbythecomplainanttotheaccusedsince October,1995andreceivingthematerialbytheaccusedandissuing twelveinvoicesEx.CW1/4toEx.CW1/15againstwhichgoodswere suppliedbythecomplainanttotheaccused. Hehasfurtherclearly deposedregardingissuanceoftwochequesEx.CW1/16andEx.CW 1/17bytheaccusedindischargeofliability.Theappellantno.2inhis crossexamination(DW1)hasadmittedthatthechequesEx.CW1/16 andEx.CW1/17bearhissignaturesandsaidchequeswereissuedby himaspartnerofM/[ENTITY].ThetestimonyofDW1can betaken into considerationagainst the appellants accused persons despite the fact that the crossexamination of DW1 could not be [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 9 of 25 completed.
14. Maindefence/groundoftheappellantaccusedarethatno business transaction ever took place between the respondent and appellant,andboththechequesinquestionwereissuedandhanded over to one [ENTITY] in lieu of five post dated cheques issuedbyhiminfavouroftheappellantno.1andthisfacthasbeen established by the appellant in view of deposition of DW1, his statementrecordedunderSection313oftheCode,writtenstatement filedbysaidJoyeshG.ManeckinTitleSuitNo.248of1998before thelearnedCivilJudge,JuniorDivision,Howrahandthejudgment anddecreedated20.12.1999passedbythesaidlearnedCivilJudge, HowrahinTitleAppealNo.43of1998.Itisfurtherdefenceofthe appellant that said [ENTITY] having being known to the appellant in textiles business approached the appellant no.2 somewhereonorabout22.06.1998statingthathehadarrangedof deliveryoftwotrucksofpolyesteretc.fromtherespondentcompany situatedatNagpurofwhichhewantedtotakedeliveryasbrokerof the respondent company at Calcutta, however, since he was not registeredwiththelocalsalestaxauthority,herequestedtheappellant no.2toaccommodatehimongoodfaithbyallowinghimtousethe salestaxregistrationnumberofappellantno.1firmfortakingdelivery ofthesaidgoodsandassuredthatthepaymentsforthegoodswould [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 10 of 25 behisliability.ThesaidJoyeshG.Maneckfurtherassuredthatsince theinvoiceswouldberaisedinthenameofappellantno.1firmname bytherespondentcompany/suppliertheappellantno.1firmwouldbe requiredissuedpostdatedchequesfavouringtherespondentcompany whichwouldbesentforcollectionbytherespondentcompanyonly afterthepostdatedchequesissuedbyhiminfavouroftheappellant no.1firmisclearedowner.Thesaidtransactionasrepresentedtothe appellantshadconsentandwaswellwithintheknowledgeofMr.[ENTITY], Manager of the respondent company Kolkata. As a consequence tothesaidarrangements,theappellantno.1permitted JoyeshG.Manecktousetheappellantno.1firm'snameandsalestax registrationforthepurposetakingdeliveryofthegoodssentbythe respondentcompanyfromitsfactoryunitatNagpurtoKolkata.Itis alsosubmittedthatthesaidgoodsarrivedinCalcuttaandimmediately thereuponJoyeshG.Manecktookdeliveryofthesameon30.06.1998 and06.07.1998inthenameofhisownproprietoryconcernedagainst theappellant'sno.1firm'sdeliveryordersonproperacknowledgment ofauthorizedrepresentativeofJoyeshG.Maneck.Inthisregard,five postdatedchequeswereissuedbyJoyeshG.Maneckinfavourofthe appellantno.1firm.ItisalsosubmittedthatJoyeshG.Maneckasper theunderstandingwhilehandingovertheabovesaidfivepostdated chequestotheappellantno.1firminlieutookfromtheappellantno.1 firm two post dated cheques dated 03.07.1998 and 10.08.1998 for Rs.6,20,177/ and Rs.6,45,985/ favouring the respondent company [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 11 of 25 towards the various bills raised by the respondent company in the nameofappellantno.1firmforthesupplyofabovesaidgoods.The saidfivechequesweredishonouredwhenpresentedforencashment bytheappellantno.1firm.Theappellanthadfiledcivilsuitagainst JoyeshGManikandlearnedCivilJudge,SeniorDivision,Howrahin itsjudgmentanddecreedated20.12.1999passedinTitleAppealNo. 43of1998hadcategoricallyheldthattheappellantno.1firmherein hadnobusinessdealingswiththerespondentcompanyandinfactit wasJoyeshGManikwhowastherealimporter/purchaserofgoodsof therespondentcompanyandthus,liableandaccountableformaking paymentsandnottheappellantno.1.
15. Inrespectofabovesaiddefenceoftheappellants,learned trialcourthasdealtthesaiddefenceinimpugnedjudgmentandinmy viewlearnedtrialcourthasrightlydealtwiththesaiddefenceholding thatthethechequeswereissuedbyaccusedno.1againsttheinvoices Ex. CW1/4 to Ex. CW1/15 to discharge the liability ; that they cannotavoidtheirliabilitymereonthegroundthatMr.Joyeshhadnot owneredthechequesgiventothem.Learnedtrialcourthadalsotaken intoconsiderationtwojudgmentsnamelyP.J.AgroTechLtd.&Ors. v.WaterBaseLtd.,(2010)12SCC146andSrujabtSomani&Ors.v. SharadGupta&Anr.",2005SCCOnLineDel444inreachingsaid conclusion.
[CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 12 of 25
16. In case of P.J. Agro Tech Ltd.'s case (supra), Hon'ble SupremeCourtheld/observedasfollow: "13.Fromareadingofthesaidsection,itisveryclearthat inordertoattracttheprovisionsthereofachequewhichis dishonoured will have to be drawn by a person on an accountmaintainedbyhimwiththebankerforpaymentof anyamountofmoneytoanotherpersonfromoutofthat accountforthedischarge,inwholeorinpartofanydebtor otherliability.Itisonlysuchachequewhichisdishonoured which would attract the provisions of[SECTION]of the aboveActagainstthedrawerofthecheque.
14. In the instant case, the cheque which had been dishonouredmayhavebeenissuedbytheRespondentNo.11 fordischarging theduesoftheAppellantNo.1Company anditsDirectorstotheRespondentNo.1Companyandthe Respondent Company may have a good case against the Appellant No.1 Company for recovery of its dues before other fora, but it would not be sufficient to attract the [ACT]TheAppellant Company and its Directors cannot be made liable under Section138ofthe1881Actforadefaultcommittedbythe [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 13 of 25 RespondentNo.11.Anactioninrespectofacriminalora quasicriminal provision has to be strictly construed in keepingwiththeprovisionsallegedtohavebeenviolated. The proceedings in such matters are in personam and cannotbeusedtofoistanoffenceonsomeotherperson, whounderthestatuewasnotliableforthecommissionof person, who under the statue was not liable for the commissionofsuchoffence."
17. ItwasalsosoobservedbyHon'bleDelhiHighCourtinthe (supra) judgmentinthecasetitledasSrujabtSomani&Ors.'scase asfollow: "7.Therespondentssaythatthechequeswereissuedon behalfoftheaccused.Thiscertainlyhasnorelevantforan offenceunderSection138oftheNegotiableInstrumentAct. The offence is committed by the person who issues the chequesandnotthepersononwhosebehalfthechequeis issued unless, however, the person on whose behalf the chequeisissuedisacompanyorapartnershipfirm.Evenif itispresumedthattheaccountfromwhichthechequewas issued was heldjointlybypetitioner No.1andanyother petitioner, no petitioner other than petitioner No.1 can become liable for the offence. [SECTION] makes it very [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 14 of 25 clearthatonlythepersonwhodrawsthechequeisliable for the offence. Vicarious liability is available only in respect of those offences committed by a company as [ACT] ThepetitionersotherthanpetitionerNo.1areneitherthe persons who drew the cheques nor the persons who can becomeliablebyvirtueofSection141oftheNegotiable [ACT]. Thus only the petitioner No.1 becomes liablefortheoffenceandhealonecanbesummoned.The petitioners,otherthanpetitionerNo.1,couldnothavebeen summonedbytheTrialCourt."
18. The learned Counsel for the appellant has referred the judgmentpassedbythelearnedCivilJudge(SeniorDivision)Hawrah, which is Ex.DW1/C. It is sufficient to say in this regard that the respondentcomplainantwasnotthepartyinsaidcaseinwhichthe judgmentEx.DW1/CwaspassedbythelearnedCivilJudge;thatin [ENTITY] (supra),itwasobservedbytheHon'bleSupreme Courtthatthe chequewhichhadbeendishonouredmayhavebeen issued by the Respondent No.11 for discharging the dues of the AppellantNo.1CompanyanditsDirectorstotheRespondentNo.1 CompanyandtheRespondentCompanymayhaveagoodcaseagainst theAppellant No.1Companyforrecoveryof itsdues beforeother [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 15 of 25 fora,butitwouldnotbesufficienttoattracttheprovisionsof[SECTION]ofthe1881Act;thatinSrikantSomani'scase(supra),Hon'ble DelhiHighCourthasobservedthattheoffenceunderSection138[ACT]iscommittedbythepersonwhoissuesthechequesandnotthe person on whose behalf the cheque is issued unless, however, the person on whose behalf the cheque is issued is a company or a partnershipfirm.
19. Further,thereispresumptionunderSection139ofNIAct thatitshallbepresumed,unlessthecontraryisproved,thattheholder ofachequereceivedthechequeofthenaturereferredtoinsection 138fordischarge,inwholeorinpart,ofanydebtorotherliability.In [PRECEDENT], passed by Hon'ble SupremeCourton05.10.2017reliedupon [PRECEDENT] of preponderance of probabilities. The presumptionhasnotbeenrebuttedbytheappellant.Furtherthereis presumption under [SECTION] [ACT] that every negotiable instrumentwasmadeordrawnforconsideration,andthateverysuch instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 16 of 25 consideration;thattheholderofanegotiableinstrumentisaholderin duecourse.Appellantscouldnotrebutthepresumption.Hence,ithas beenprovedonrecordthatappellantshadissuedchequeEx.CW1/16 (chequeno.777464dated30.07.1998for Rs.6,20,177/)andcheque Ex.CW1/17 (cheque no.777465 dated 04.08.1998 for Rs.6,45,985.58/)fordischargeoftheirliability.
20. ThechequesEx.CW1/16andEx.CW1/17werepresented for encashment by the complainant vide pay in slips, both dated 30.12.1998 but same were returned unpaid with remarks "Funds Insufficient" by the banker of accused company vide memo dated 04.01.1999 (Ex.CW1/20). Said memo was forwarded to the complainant by its banker vide return advice dated 11.01.1999 Ex.CW1/21.UnderSection146oftheNIAct,theCourtshall,on productionofbank'sslipormemohavingthereontheofficialmark denotingthatthechequehas beendishnoured,presumethefactof dishonour of such cheque, unless and until such fact is disproved. Hence, it has been proved that the said cheques Ex.CW1/16 and Ex.CW1/17 were presented by the complainant within stipulated period and same were dishonoured vide returning memo dated 04.01.1999,Ex.CW1/20and the said memowas forwarded to the complainant by its banker vide return advice dated 11.01.1999 Ex.CW1/21.
[CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 17 of 25
21. Inrespectoflegalnotice,thecomplainanthasdeposedthat complainant issued legal notice dated 22.01.1999 Ex.CW1/22 throughspeedpostandUPCvideEx.CW1/23toEx.CW1/29.The noticewereservedupontheaccusedon25.01.1999videEx.CW1/30. DW1hasaccepted inhiscrossexaminationthathereceivedlegal noticeEx.CW1/22. In [PRECEDENT], Hon'ble threeJudge Bench of Supreme Courtheldthatanydrawerwhoclaimsthathedoesnotreceivethe noticesentbypost,can,within15daysofreceiptofsummonsfrom theCourtinrespectofthecomplaintunderSection138NIAct,make paymentofthechequeamountandsubmittotheCourtthathehad madepaymentwithin15daysofreceiptofthesummons(byreceiving acopyofcomplaintwiththesummons)and,therefore,thecomplaint isliabletoberejected;thatapersonwhodoesnotpaywithin15days ofreceiptofthesummonsfromtheCourtalongwiththecopyofthe complaintunderSection138NIAct,cannotobviouslycontentthat therewasnoproperserviceofnoticeasrequiredunderSection138[ACT],byignoringstatutorypresumptiontothecontraryunderSection 27oftheGeneralClausesActandSection114oftheEvidenceAct; that any other interpretation of the proviso would defeat the very object of the legislation. Hence, it has been proved that the complainantsentthelegaldemandnoticedated22.01.1999Ex.CW 1/22totheaccusedappellantswithin30daysofthereceiptofthe [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 18 of 25 informationbyhimfromthebankregardingthereturnofsaidcheques asinsufficientfunds.
22. In respect of payment of amount of said cheque, the complainant has deposed that despite service of legal notice, no paymenthadbeenreceivedbythecomplainant.Thecomplaintwas filedbythecomplainantbeforethelearnedMetropolitanMagistrateas appellanthasfailedtomakethepaymentregardingthesaidcheque. Hence,ithasalsobeenprovedonrecordthatappellantsfailedtomake thepaymentofchequesamounttothecomplainantwithin15daysof thereceiptofthesaidlegalnotice.
23. Hence, I am of the view that learned Metropolitan Magistrate has rightly convicted the appellant for the offence [SECTION].
24. By impugned order of sentence dated 29.05.2014, no substantivesentencewasimposedbutappellantsweredirectedtopay compensationofRs.25,32,325/jointlytothecomplainantrespondent andindefaultofthepaymentofcompensation,appellantno.2was directedtoundergosimpleimprisonmentforsixmonths.Ihaveasked fromthelearnedcounselappearingforboththepartiesastowhether compensation can be awarded after conviction without imposing [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 19 of 25 sentence of fine or imprisonment of which fine forms the part or imprisonmentofwhichfinedoesnotformthepart.Theanswerof both the learned counsel were affirmative. The learned counsel appearingfortheappellantshasreferredjudgmentsinsupportofhis said answer namely [PRECEDENT]
25. [PRECEDENT]
"6.Section357relatestoOrdertopaycompensation.
357.Ordertopaycompensation.(1)WhenaCourtimposes asentenceoffineorasentence(includingasentenceof death) of which fine forms a part, the Court may, when passingjudgmentorderthewholeoranypartofthefine recoveredtobeapplied
(a) in defraying the expenses properly incurred in the prosecution;
(b)inthepaymenttoanypersonofcompensationforany lossorinjurycausedbytheoffence,whencompensationis, [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 20 of 25 intheopinionoftheCourt,recoverablebysuchpersonina CivilCourt;
(c)&(d)xxxx(notrelevant) (2)xxxxx(notrelevant) (3)WhenaCourtimposesasentence,ofwhichfinedoes not form a part, the Court may, when passing judgment ordertheaccusedpersontopay,bywayofcompensation suchamountasmaybespecifiedintheordertotheperson whohassufferedanylossorinjurybyreasonoftheactfor whichtheaccusedpersonhasbeensosentenced. (4)Anorderunderthissectionmayalsobemadebyan AppellateCourtorbytheHighCourtorCourtofsessions whenexercisingitspowerofrevision.
(5)Atthetimeofawardingcompensationinanysubsequent civilsuitrelatingtothesamematter,thecourtshalltake intoaccountanysumpaidorrecoveredascompensation underthissection.
7. [SECTION], is categorical that the compensation can be awarded only where fine does not form part of the sentence. [SECTION] has been the subjectmatter of judicial interpretation by this Court in several decisions. In [PRECEDENT]
[CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 21 of 25 "A reading of [SECTION] would show that the question of award of compensation wouldarisewherethecourtimposesasentenceofwhich finedoesnotformapart."
This Court also held that [SECTION] will not apply whereasentenceoffinehasbeenimposed.
[PRECEDENT]
"In view of the submissions made, the only questionthatarisesforconsiderationiswhetherthecourt candirectpaymentofcompensationinexerciseofpower undersubsection(3)ofSection357inacasewherefine alreadyformsapartofthesentence.Apartfrom[SECTION] there is no other provision under the Codewhereunderthecourtcanexercisesuchpower:"
After extracting [SECTION] of the Code, the Court proceededtoholdthus:
"Onaplainreadingoftheaforesaidprovision,it iscrystalclearthatthepowercanbeexercisedonlywhen thecourtimposessentencebywhichfinedoesnotforma part. In the case in hand, a court having sentenced to [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 22 of 25 imprisonment,asalsofine,thepowerundersubsection(3) ofSection357couldnothavebeenexercised.Inthatview of the matter, the impugned direction of the High Court directingpaymentofcompensationtothetuneofRs.one lakhbytheappellantissetaside."
9.ItisevidentfromSubSection(3)ofsection357ofthe Code,thatwherethesentenceimposeddoesnotincludea fine, that is, where the sentence relates to only imprisonment,thecourt,whenpassingjudgment,candirect theaccusedtopay,bywayofcompensation,suchamount as may be specified in the order to the person who has sufferedanylossorinjurybyreasonoftheactforwhichthe accusedpersonhasbeensosentenced.Thereasonforthis is obvious. [SECTION] provides that wherethecourtimposesasentenceoffineorasentenceof which fine forms a part, the Court may direct the fine amount to be applied in the payment to any person of compensation for any loss or injury caused by the offence,whencompensationis,intheopinionofthecourt, recoverable by such person in a Civil Court. Thus, if compensationcouldbepaidfromoutofthefine,thereisno need to award separate compensation. Only where the sentencedoesnotincludefinebutonlyimprisonmentand [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 23 of 25 thecourtfindsthatthepersonwhohassufferedanylossor injurybyreasonoftheactoftheaccusedperson,requires tobecompensated,itispermittedtoawardcompensation underSection357(3)."
26. In [ENTITY] v. State of Punjab, (1982) 1 SCC 608, Hon'bleSupremeCourthasobserved/heldthattheHon'bleHighCourt while maintaining the conviction, has set aside the imprisonment imposedbythetrialcourtandhasnotimposedanyfineontheaccused andontheotherhand,theappellanthasbeengiventhebenefitof probation;thattherecannotbeadirectionforcompensationunder Section357(a)oftheCode,wherethereisnosentenceoffine,and wheretheconvicthasbeenletoffonprobation.
27. Hence,thepositionemergesfromtheSection357ofthe Code, [ENTITY] (supra) and [ENTITY] (supra) is that the compensationcanbeawardedintwocircumstancesafterconviction, onecircumstanceiswhensentenceoffineorasentence(includinga sentence of death) of which fine forms a part, is imposed then compensationcanbeawardedfromthefineandsaidcompensation maybeeitherthewholefineoranyparttheoffineasprovidedin Section357(1)oftheCode.Secondcircumstancewouldbewhere sentence of imprisonment is imposed and no sentence of fine is imposed, and in this situation, compensation can be awarded as [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 24 of 25 provided in [SECTION] of the Code. If court wants to award compensationafterconvictionunderSection357oftheCode,itis mandatorytoimposesentenceoffineorsentenceofwhichfineforms thepartorsentenceofwhichfinedoesnotformapart.Andifnosuch sentence is imposed, the compensation can notbe awarded. In the presentcase,nosentencehasbeenimposedupontheappellantsby learnedtrialcourtandthereforeorderofcompensationwhichhasbeen passed can not be upheld and therefore impugned order of sentence/compensationismodifiedtotheeffectthatorderofpaying compensationofRs.25,32,325/shallbetreatedasfineandsaidthe wholefine(Rs.25,32,325/)wouldbegivenjointlybyappellantsto respondentascompensationundersection357(1)oftheCode,andin defaultofthepaymentofcompensation,appellantno.2shallundergo simple imprisonment for six months. Appellants are given three monthstimetopaycompensationtotherespondent.
28. Hence,orderofconvictionisupheldandorderofsentence is modified accordingly. Appeal is dismissed with above said Digitally signed by modificationinorderofsentence.
[ENTITY] Date: 2018.08.29 15:39:22 +0530 Announcedintheopencourton(SanjeevKumarII) 29.08.2018 AdditionalSessionsJudge05, SouthEast,SaketCourts,NewDelhi [CASE NUMBER] M/s [PRECEDENT] [ENTITY] Page No. 25 of 25