THE HON’BLE SRI JUSTICE B. CHANDRA KUMAR CRIMINAL REVISION CASE NOs.1191 and 1192 OF 2009 Date: 10-11-2009 CRIMINAL REVISION CASE NO.1191 OF 2009 Between: Tadepally Sivalingeswara Rao. S/o.Lakshmaiah, Aged about 54 Years, Business, R/o.Alankar Talkies Road, Morrispeta,Tenali, Guntur District. - - - Petitioner And The State of A.P. Rep. by the Public Prosecutor, High Court of A.P., Hyderabad, And another. - - - Respondents. CRIMINAL REVISION CASE NO.1192 OF 2009 Between: Kotha Venkateswarlu, S/o.Venkata Subba Rao, Aged about 45 Years, Private Gumastha, R/o.Tenali, Guntur District. - - - Petitioner And The State of A.P. Rep. by the Public Prosecutor, High Court of A.P., Hyderabad, And another. - - - Respondents. THE HON’BLE SRI JUSTICE B. CHANDRA KUMAR CRIMINAL REVISION CASE NOs.1191 AND 1192 OF 2009 COMMON ORDER: These two Criminal Revision Cases have been filed challenging the order passed in Criminal Miscellaneous Petition No.96 of 2009 in Criminal Appeal No.81 of 2009 dated 14-07-2009 passed by the learned Principal Sessions Judge, Nalgonda FAC. V Additional Sessions (III F.T.C.) Nalgonda at Miryalaguda, whereby and where under a condition was imposed directing the petitioners/A-1 and A-2 herein to deposit half of the compensation amount awarded by the trial Court while suspending the sentence of imprisonment. The brief facts of the case are as follows : The petitioner in Criminal Revision Case No.1191 of 2009 is A-1 and the petitioner in Criminal Revision Case No.1192 of 2009 is A-2 in C.C. No.474 of 2003 on the file of Judicial Magistrate of I Class, Miryalaguda. The second respondent herein filed a complaint under Section 200 of Code of Criminal Procedure (Hereinafter referred as ‘Code’) against the petitioners/A-1 and A-2 herein and another alleging that they had committed an offence punishable under Section 138 of the Negotiable Instruments Act (Hereinafter referred as ‘N.I. Act’). The further case of the second respondent/complainant is that the petitioners/A-1 and A-2 and another i.e. A-3 used to run a chit fund company under the name and style of “Vijayalakshmi Chit Funds Private Limited”. The petitioner/A-1 is the foreman and Manager of the chit fund company and the petitioner/A-2 and A-3 are the Directors of the said chit fund company. The second respondent/complainant joined as a subscriber in the chit fund company for the chit amount of Rs.5,00,000/- (Rupees five lakhs only). The second respondent/complainant paid the chit amount and completed entire payment. Thereafter, the petitioner/ A-1 in the capacity of Managing Director- cum-Foreman of the chit fund company delivered cheques which ultimately bounced. The second respondent/complainant then filed a case. After conclusion of the trial in that case, the trial Court found petitioners/A-1 and A- 2 guilty of the offence punishable under Section 138 of the N.I. Act and accordingly convicted them and sentenced to undergo Imprisonment for a period of six (6) months and to pay total of five cheques amount i.e., Exs.P1 to P5 which comes to Rs.2,70,930/- (Rupees two lakhs seventy thousand nine hundred and thirty only). Aggrieved by the said judgment, the petitioners/A-1 and A-2 herein filed Criminal Appeal Nos.81 of 2009 and 82 of 2009 respectively. The learned Principal Sessions Judge, Nalgonda FAC. V Additional Sessions Judge (III F.T.C.) Nalgonda at Miryalaguda by order dated 14-07-2009 in Criminal Miscellaneous Petition Nos.96 of 2009 and 97 of 2009 suspended the execution of the sentence, on condition of the petitioners/A-1 and A-2 depositing half of the compensation amount awarded by the lower Court within a week. Aggrieved by the same, the petitioners/A1 and A-2 filed these Revisions. The learned counsel for the petitioners/A-1 and A-2 argued that the order of the Court below is contrary to Sub-section 2 of Section 357 of the Code since sub section makes it clear “When any person convicted of any offence prefers any appeal and if the fine is imposed, no payment shall be made before the period allowed for presenting the appeal as elapsed or an appeal be presented before the decision of the Appeal”. It is also argued that by imposing the said condition, the very purpose of filing an Appeal will be defeated. It is also his submission that there is no provision in the Code to impose such condition. It is also his submission that sub-section 3 of Section 357 is applicable to the facts of that case and in view of the same, Section 431 of the code is applicable which provides that any money payable by virtue of an order shall be recovered as if it were a fine and when the compensation has to be treated as fine under Section 431 of the Code, Sub- section 2 of Section 357 of Code is applicable. It is also his submission that there is no default clause when compensation has been awarded under Section 357 (3) of the Code. The learned counsel for the second respondent/complainant submitted that under sub-section 3 of Section 357 which is not a fine or forms a part of fine sub-section 1 of 357 and sub-section 2 of 357 are not applicable. It is also his submission that since sub-section 2 of Section 357 is not applicable, the order to pay compensation cannot be automatically suspended. It is also his submission that Section 421 of the Code deals with fine and therefore Section 421 of the Code is not applicable when an order to pay compensation is made under sub-section 3 of Section 357 of the Code. The learned counsel for the petitioners/A-1 and A-2 relied on the judgment in the cases between Dilip S. Dahanukar V. Kotak Mahindra Company Limited and another[1], Vijayan Vs. Sadanandan K. and another[2] and Ahammed Kutty Vs. Abdulla Koya[3]. The only point that arises for consideration is whether the payment of compensation will be automatically stayed under sub-section 2 of Section 357 of the Code pending disposal of Appeal? A reading of Section 357 makes it clear that sub-section 1 of Section 357 envisages that the Court may when passing judgment order the whole or a part of the fine recovered to apply for the purposes mentioned in clauses A to D of sub-section 1 of Section 357. A reading of Sub-section 1 and 2 of Section 357 makes it clear that when a fine has been imposed and the whole or any part of the fine recovered is ordered to be paid as compensation, sub-section 1 of Section 357 applies. The word ‘Recovered’ in Sub section 1 of Section 357 makes it clear that only after the recovery of the fine amount the whole or part of the fine so recovered to be applied for the purposes mentioned in clauses A to D of Sub-section 1 of Section 357 of the Code. Sub-section 2 of Section 357 envisages that if fine is imposed in a case, it is subject to Appeal, no such payment shall be made before the period allowed for representing the Appeal as elapsed and in case if an Appeal has been presented then the accused person need not pay fine till the decision of the Appeal. Section 421 of the Code empowers the Court to issue warrant for levy of fine. The Court may issue warrant for levy of the amount by attachment and sale of immovable property belonging to the offender under Sub clause A of Sub-section 1 of Section 421. Sub clause B of Sub-section 1 of Section 421 authorizes the Court to issue warrant to the Collector of the District authorizing him to release the amount as the arrears of land revenue from the movable or immovable property or both of the offender. Where in a case the sentence directs that in default of payment of fine the offender shall be imprisoned and if such offender cannot pay the whole of such imprisonment in default no court shall issue such warrant unless for special reasons to be recorded in writing and unless it has made an order for payment of expenses or compensation out of the fine under Section 357 of the Code. This gives an impression that even after the accused had undergone the whole of such imprisonment in default the court may issue warrant as envisaged under sub clause A or B of Sub-section 1 of Section 421 where an order for payment of expenses or compensation out of the fine has been made under Sub- section 351. We are mainly concerned of sub-section 3 of Section 357 which is applicable to the facts of the present case. Here, in this case, the Court imposed a sentence of which fine does not form part but however, when passing the judgment ordered the accused to pay by way of compensation the amount specified in the order before de-facto complainant. Sub-section 5 of Section 357 provides that at the time of awarding compensation in any subsequent civil suit relating to the same matter, the Court shall take into account any sum paid or recovered as compensation under this Section. Whether default of payment of compensation the offender shall be imprisoned or not came up for consideration in case between Vijayan Vs. Sadanandan K. and another (referred 2 supra) Honourable Supreme court observed that the provisions of Section 357(3) and Section 431 of the Code when read with Section 64 of I.P.C. empower the Court while making an order for payment of compensation to also include a default sentence in case of non payment of fine. The above judgment is delivered by the Division Bench of the Honourable Supreme Court on 05-05-2009. When the similar question came up before the another Division Bench of Honourable Supreme Court in a case between Ahammed Kutty Vs. Abdulla Koya (referred 3 supra) it was held as follows : “Section 357 Cr.P.C. bears the heading “Order to pay compensation”. It includes in sub-section (1) the power of the Court to utilize a portion of the fine imposed for the purpose of compensating any person for any loss or injury caused by the offence. In addition, sub-section (3) provides that when a sentence is imposed by the Court, of which fine does not form a part, the court may, while passing judgment, order the accused person to pay by way of compensation such amount as may be specified in the order to the person who suffers any loss or injury by reason of the act for which the accused person has been so sentenced. It is true that the said provision does not include the power to impose a default sentence, but read with Section 431 Cr.P.C. the said difficulty can be overcome by the Magistrate imposing the sentence. To appreciate the said legal position, the provisions of Section 431 are set out herein below : “431. Money ordered to be paid recoverable as fine – Any money (other than a fine) payable by virtue of any order made unless this Code, and the method of recovery of which is not otherwise expressly provided for, shall be recoverable as if it were a fine: Provided that Section 421 shall, in its application to an order under Section 359, by virtue of this section, be construed as if in the proviso to sub- section (1) of Section 421, after the words and figures ‘under Section 357’, the words and figures ‘or an order for payment of costs under Section 359’ had been inserted. Section 431 makes it clear that any money other than a fine payable on account of an order passed under the Code shall be recoverable as if it were a fine which takes us to Section 64 I.P.C”. Thus, the money other than a fine payable on account of any order passed under the provisions of the Code shall be recoverable as if it were a fine. In this case, we are not concerned with the issue, whether the Court is empowered while making an order for payment of compensation to also include a default sentence in case of non payment of the same? The Honourable Supreme Court in case between Dilip S. Dahanukar V. Kotak Mahindra Company Limited and another (Referred 1 supra) held as follows : “We must, however, observe that there exists a distinction between fine and compensation, although, in a way it seeks to achieve the same purpose. An amount of compensation can be directed to be recovered as a “fine” but the legal fiction raised in relation to recovery of fine only, it is in that sense “fine” stands on a higher footing than compensation awarded by the Court”. “It is therefore, apparent that if a court imposes a sentence of fine or a sentence or where it forms a part thereof, the Court is entitled to direct that whole or any part of the fine recovered, to be applied to in respect of factors enumerated in Clauses (a), (b), (c) or (d). Section 421 of the Code deals with the mode and manner in which the fine levied is to be recovered. Section 424 deals with the steps required to be taken by the Court where the amount of fine has not been paid forthwith. Section 357 deals with two types of cases, namely, (i) where only a sentence has been imposed; and (ii) where fine also forms part of the sentence. When a fine is imposed simpliciter Section 421 read with Section 424 would be applicable but where fine forms part of the sentence, it would not have any application”. “A statute must be read harmoniously. An amount of compensation directed to be paid may not form part of a fine. It may be awarded separately. It may be recoverable as if it is a fine in terms of Section 431 of the Code but by reason thereof it would not become automatically recoverable forthwith. The legal position, however, must be considered keeping in view the purport and object of the Act”. “An appeal is indisputably a statutory right and an offender who has been convicted is entitled to avail the right of appeal which is provided for under Section 374 of the Code. Right of appeal from a judgment of conviction affecting the liberty of a person keeping in view the expansive definition of Article 21 is also a fundamental right. Right of appeal, thus, can neither be interfered with or impaired, nor can it be subjected to any condition”. The distinction between sub-sections (1) and (3) of Section 357 is apparent. Sub-section (1) provides for application of an amount of fine while imposing a sentence of which fine forms a part; whereas sub-section (3) calls for a situation where a court imposes a sentence of which fine does not form a part of the sentence. Clause (b) of sub-section (1) of Section 357 and sub-section (1) of Section 357 and sub-section (3) of Section 357 seek to achieve the same purpose. What is necessary is to find out the intention of the lawmaker and the object sought to be achieved. Sub-section (2) of Section 357 uses the word “fine”. It does not say that what would be stayed i.e. application of fine. Sub-section (2) of Section 357, in our opinion, does not contemplate any other interpretation. The Honourable Supreme Court while observing that under sub- section 2 of Section 357, realization of the fine at least in respect of the factors in sub-section 1 of Section 357 is to be stayed automatically and there is no reason as to why the legislative intent cannot be held to apply in relation to the amount of compensation directed to be paid in terms of sub-section 3. The Honourable Supreme Court finally observed as follows : “We therefore, are of the opinion : (i) In a case of this nature, sub-section (2) of Section 357 of the Code of Criminal Procedure would be attracted even when the appellant was directed to pay compensation, (ii) The appellate court, however, while suspending the sentence, was entitled to put the appellant on terms. However no such term could be put as a condition precedent for entertaining the appeal which is a constitutional and statutory right, (iii) The amount of compensation must be a reasonable sum, (iv) The Court, while fixing such amount, must have regard to all relevant factors including the one referred to in sub-section (5) of Section 357 of the Code of Criminal Procedure, (v) No unreasonable amount of compensation can be directed to be paid. As seen from the provisions of Criminal Procedure Code, it is clear that there is no specific provision for recovery of compensation awarded by the Court under sub-section 3 of Section 357 of the Code. Similarly, there is no express provision to sentence the offender to imprisonment in default of payment of compensation. Though, there appears to be some force in the contention of the learned counsel for the petitioners/A-1 and A-2 that under Section 431 of the Code, the compensation has to be treated as fine, and when the order to pay compensation is to be treated as an order to pay fine under Section 431 of the Code, sub-section 2 of Section 357 applies and during the pendency of the Appeal, the appellant need not pay the compensation. However, sub-section 3 of Section 357 appears to have specific purpose of compensating the victims. In Criminal Justice Delivery System, the victims are often forgotten. It is the victim, who is the loser when an offence has been committed. The victim who sustained injury and who has suffered loss or damages or who has been deprived of his near and dear or who is put to unnecessary suffering, in my view, in all deserving cases, it is just and reasonable to compensate such victims. The Honourable Apex Court in Hari Singh Vs. Sukhbir Singh[4] observed as follows : “10. Sub-section (1) of Section 357 provides power to award compensation to victims of the offence out of the sentence of fine imposed on accused. In this case, we are not concerned with sub-section (1). We are concerned only with sub-section (3). It is an important provision but courts have seldom invoked it. Perhaps due to ignorance of the object of it. It empowers the Court to award compensation to victims while passing judgment of conviction. In addition to conviction, the Court may order the accused to pay some amount by way of compensation to victim who has suffered by the action of accused. It may be noted that this power of Courts to award compensation is not ancillary to other sentences but it is in addition thereto. This power was intended to do something to reassure the victim that he or she is not forgotten in the Criminal Justice system. It is a measure of responding appropriately to crime as well of reconciling the victim with the offender. It is, to some extent, a constructive approach to crimes. It is indeed a step forward in our criminal justice system. We, therefore, recommend to all courts to exercise this power liberally so as to meet the ends of justice in a better way.” It was further opined: “11. The payment by way of compensation must, however, be reasonable. What is reasonable, may depend upon the facts and circumstances of each case. The quantum of compensation may be determined by taking into account the nature of crime, the justness of claim by the victim and the ability of accused to pay. If there are more than one accused they may be asked to pay in equal terms unless their capacity to pay varies considerably. The payment may also vary depending upon the acts of each accused. Reasonable period for payment of compensation, if necessary by installments, may also be given. The court may enforce the order by imposing sentence in default.” In Sarwan Singh Vs. State of Punjab[5], the Honourable Supreme Court held as follows : “Though Section 545 enabled the court only to pay compensation out of the fine that would be imposed under the law, by Section 357(3) when a court imposes a sentence, of which fine does not form a part, the Court may direct the accused to pay compensation. In awarding compensation it is necessary for the court to decide whether the case is a fit one in which compensation has to be awarded. If it is found that compensation should be paid, then the capacity of the accused to pay compensation has to be determined. In directing compensation, the object is to collect the fine and pay it to the person who has suffered the loss. The purpose will not be served if the accused is not able to pay the fine or compensation for, imposing a default sentence for non-payment of fine would not achieve the object. If the accused is in a position to pay the compensation to the injured or his dependents to which they are entitled to, there could be no reason for the court not directing such compensation. When a person, who caused injury due to negligence or is made vicariously liable is bound to pay compensation it is only appropriate to direct payment by the accused who is guilty of causing an injury with the necessary mensrea to pay compensation for the person who has suffered injury.” At the same time, the substantial right to appeal by an accused should be kept in mind. It has to be seen whether the accused is in a position to pay the compensation to the injured or to his dependants or whether the conditional order to pay compensation would result in defeating the substantial right of appeal of an accused. However, the Supreme Court having considered the relevant provisions and several decisions finally directed the appellant to deposit a part of the compensation ordered to be paid. Therefore, I consider just and reasonable to follow the above referred decision of the Honourable Supreme Court in this case also. Having regard to the purpose of directing to pay compensation and substantial right of the accused to prefer an appeal which shall not be defeated, a reasonable approach seems to have been taken by the Honourable Supreme Court in the above referred decision. Therefore, having regard to the facts and circumstances of the case, a just decision has to be made. The amount of compensation must be a reasonable sum, it should not be too excessive, it should not result in causing harshness or defeating the right of an Appeal. In the light of the above referred Honourable Supreme Court judgment and having regard to the facts and circumstances of the case and also that the Petitioner/A-1 is a foreman and petitioner/A-2 is Director of the company, I consider just and reasonable to modify the order of the lower Court as follows : The execution of sentence of imprisonment and order to pay compensation shall be suspended on the same terms and conditions on which the petitioners/A-1 and A-2 were on bail during the trial and on further condition of petitioners/A-1 and A-2 each depositing 1/6th of the total amount of the 5 cheques i.e. Ex.s P1 to P5, which comes to Rs.45,065/- (Rupees forty five thousand sixty five only) each within two (2) months from the date of this order. Accordingly, the Criminal Revision Cases are disposed of. _____________________ B. CHANDRA KUMAR, J Date: 10-11-2009. DSH. [1] (2007) 6 Supreme Court Cases 528. [2] (2009) 3 Supreme Court Cases (Crl.) 296. [3] (2009) 3 Supreme Court Cases (Crl.) 302. [4] (1988) 4 SCC 551 : 1988 SCC (Crl.) 984. [5] (1978) 4 SCC 111 : 1978 SCC (Crl.) 549.