IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 7TH JULY, 2008 / 16TH ASHADHA, 1930 Crl.MC.No. 2756 of 2005 (CRRP.50/2002 of I ADDL. SESSIONS COURT, KOLLAM CC.417/2000 of JUDL.MAGISTRATE OF FIRST CLASS-III, PUNALUR) .................... PETITIONER: REVISION PETITIONER/COMPLAINANT: ------------------------------------------------------------------ V. DAMODARAN PILLAI, S/O. VELUPILLAI, S.D. BHAVAN, PATHIRIKKAL, PATHANAPURAM, KOLLAM DISTRICT. BY ADV. SRI.RAJU K.MATHEWS RESPONDENTS/RESPONDENT/ACCUSED: -------------------------------------------------- 1. N. BASHEER, S/O. NAGOOR MEERAN RAWTHER, PULLAMANNU VEEDU, NADUMURUPPU, PATHIRIKKAL, PATHANAPURAM, KOLLAM DISTRICT. 2. STATE OF KERALA, REPRESENTED BY THE STATE PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADV. SRI.GEORGE CHERIAN FOR R1 SRI.R.SREERAJ. BY PUBLIC PROSECUTOR SRI.SALIM.P.A FOR R2. THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 07/07/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: V.K.MOHANAN, J. --------------------------------------------- Crl.M.C.No. 2756 of 2005 --------------------------------------------- Dated this the 7th day of July, 2008 O R D E R The complainant in a cheque case approaches this Court under Section 482 of the Code of Criminal Procedure, aggrieved by the inadequate sentence passed by the court below against the accused. C.C.No.417 of 2000 before the Judicial First Class Magistrate Court-III, Punalur is a case instituted upon a private complaint for the offences punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act' only). 2. The case of the complainant is that the accused borrowed a sum of Rs.42,000/- and when demanded, the accused issued a cheque of the Indian Bank, Kallumkadavu Branch for Rs.42,000/- and when presented the same for encashment through Quilon District Co-operative Bank, Pathanapuram, the cheque was dishonoured for the reason of insufficiency of fund. It is the further case of the complainant that though a registered notice was sent in terms of the provisions of the above Act, the accused has CRL.M.C. NO.2756 OF 2005 :-2-: not paid the amount in spite of the receipt of said statutory notice. Thus, a complaint was filed and on appearance, the particulars of the offences were read over to which the accused pleaded not guilty which resulted in the further trial of the case. Thus, during the trial, PW-1 was examined and Exts.P1 to P7 were marked on the side of the complainant. During Section 313 questioning, the accused denied the entire allegation. The stand taken by the accused is that he had actually received only a sum of Rs.22,000/- and as a security, he had given a blank cheque. It is also the case of the accused that he had repaid a sum of Rs.15,000/- and the complainant had filed a petition before the Police, Pathanapuram and at the instance of the Sub Inspector of Police, Pathanapuram, the accused had supplied furniture for the value of Rs.15,000/- and thus a sum of Rs.7,000/- is due to the accused from the complainant. There was no defence evidence. 3. The trial court framed five issues and finally, found that the accused is guilty under Section 138 of the CRL.M.C. NO.2756 OF 2005 :-3-: Act. Under issue No.5, relying on the decision of the Apex Court in Bhaskaran v. Balan (1999(3) KLT 440 (SC), the trial court had held that maximum fine can be imposed is only Rs.5000/-. According to the trial court, the facts and circumstances of the case show that there is no necessity to impose any imprisonment and as such, no imprisonment is awarded, no compensation can be awarded under Section 357(3) of the Cr.P.C. Thus, though the accused is found guilty under Section 138 of the N.I.Act., he is sentenced to pay a fine of Rs.5,000/- and he is directed to undergo simple imprisonment for 60 days, in case of default of the fine amount. It is also ordered that if the fine amount is realised, a sum of Rs.4500/- would be paid to the complainant under Section 357(1) of Cr.P.C. 4. Aggrieved by the above order of sentence, the petitioner herein had preferred Crl.R.P.No.50 of 2002 before the Sessions Court, Kollam. The Sessions Court dismissed the revision petition stating that it was the discretion of the trial court to award sentence either by CRL.M.C. NO.2756 OF 2005 :-4-: imposing imprisonment or with fine or with both and the fine is also not mandatory and it is the discretion of the court to fix the fine amount and compensation amount. As such, the trial court has exercised its discretion imposing sentence of fine and compensation under Section 357(1) of the Cr.P.c. The Sessions Court did not interfere with the order of the trial court regarding the sentence. 5. It is the above orders of the trial court as well as the revisional court are being challenged in this petition under Section 482 of the Code of Criminal Procedure. I have heard the learned counsel for the petitioner as well as the respondents. 6. Learned counsel for the petitioner/ complainant submits that both the trial court as well as the revisional court committed wrong while imposing the sentence by paying a fine amount of Rs.5,000/-. According to counsel for the petitioner, the court below ought to have compensated the complainant/petitioner. CRL.M.C. NO.2756 OF 2005 :-5-: 7. The learned counsel invited my attention to the decision of the Apex Court reported in Bhaskaran's case (cited supra). On the strength of the above decision, the counsel submits that it is incumbent upon the court below to award fair compensation by invoking Section 357(3) of the Code. 8. Per contra, the learned counsel for the first respondent/accused submits that the trial court has awarded only a fine and as long as no imprisonment is awarded, there is no justification for awarding compensation under Section 357(3) of the Cr.P.C. Counsel for the first respondent also pointed out that the petitioner/complainant had already initiated civil action against the first respondent/accused and therefore, this petition is liable to be rejected as there is no merit. 9. I have carefully considered the arguments advanced by both the counsel and also the judgments of the court below. The penal provision in the Negotiable Instruments Act was brought as per the Amendment Act, 1988 by which the new chapter, viz., XVII was CRL.M.C. NO.2756 OF 2005 :-6-: incorporated for penalties in case of dishonour of cheque due to insufficiency of funds in the account. The object behind the amendment was to encourage the culture of use of cheques and enhancing the credibility of the instrument. In the above Supreme Court decision, the Apex Court had held that if a Judicial Magistrate of First Class were to order compensation to be paid to the complainant from out of the fine realised, the complainant would be the loser when the cheque amount exceeded the said limit and in such a case, the complainant would get only the maximum amount of Rupees five thousand. 10. In para 31 of the same judgment, the Apex Court had held as follows:- “31. However, the magistrate in such cases can alleviate the grievance of the complainant by making resort to S.357(3) of the Code. It is well to remember that this Court has exphasized the need for making liberal use of that provision, [Hari Krishan and State of Haryana v. Sukhbir Singh and Ors. JT 1988(3) SC 11]. No limit is mentioned in the sub-section and therefore, a magistrate can award any sum as CRL.M.C. NO.2756 OF 2005 :-7-: compensation. Of course while fixing the quantum of such compensation, the Magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus, even if the trial was before a court of magistrate of first class in respect of a cheque which covers an amount exceeding Rs.5,000/- the court has power to award compensation to be paid to the complainant.” In the present case, there is no detailed discussion as to why the Magistrate is reluctant to invoke Section 357(3) when the cheque amount is Rs.42,000/-. Once the Magistrate is convinced that the offence under Section 138 of the Act was committed, the Magistrate has to consider as to how the complainant can be compensated and his grievance can be redressed. The policy of awarding imprisonment or fine shall not be on mechanical basis. In the present case, the trial court has already realised the pecuniary limitation in imposing the fine, that means, the accused cannot be ordered to pay fine more than Rs.5000/- and if so, no sufficient amount can be ordered to be given to the complainant out of such fine amount. If that be so, the Magistrate CRL.M.C. NO.2756 OF 2005 :-8-: ought to have considered the alternative so as to impose sufficient amount as compensation. Instead of awarding fine amount, he could have imposed imprisonment and in such circumstances, Section 357(3) can be pressed into service so as to compensate the complainant/ petitioner. So I am of the view that the trial court as well as the revisional court failed in adhering the policy of sentence in a case under Section 138 of the Negotiable Instruments Act. 10. Therefore, the question of sentence and award of compensation must be considered by the trial court. Hence, it is only proper that the Magistrate shall hear the complainant/petitioner and the accused on those aspects. It is also brought to my notice that a civil case has already been instituted on the basis of the very same cheque and the same is pending. If the complainant as well as the accused are ready to settle the dispute, based upon the cheque, the same can be settled in the mean while and if so, the same can be certainly taken into consideration by the trial court CRL.M.C. NO.2756 OF 2005 :-9-: when determining the question of sentence. 11. In the result, while maintaining the conviction, the sentence awarded by the trial court confirmed by the Sessions Court is set aside and the trial court is directed to pass orders on the question of sentence and reasonable compensation, if any, payable. The Registry is directed to send back the records forthwith. There will be a direction to the trial court to take up the matter as expeditiously as possible, at any rate within a period of three months from the date of receipt of a copy of this judgment. The parties are directed to appear before the court as and when process received. sd/- V.K.Mohanan, Judge MBS/ CRL.M.C. NO.2756 OF 2005 :-10-: V.K.MOHANAN, J. -------------------------------------------- Crl.M.C.NO. OF 200 ------------------------------------------- O R D E R CRL.M.C. NO.2756 OF 2005 :-11-: DATED: 7-2008 CRL.M.C. NO.2756 OF 2005 :-12-: