[2008] 11 S.C.R. 738

D. PURUSHOTAMA REDDY & ANR.

I ._ v.

K. SATEESH (Civil Appeal No. 4751 of 2008)

AGUSUT 1, 2008

[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

Code of Criminal Procedure, 1973 - s.357 (1) and (5) - Issuance of cheque towards payment of loan - Dishonour of '-i c cheque - Initiation of criminal as well as civil proceedings against the defaulter - In criminal case direction to pay the creditor the principal amount - Amount paid - Thereafter decree passed for the principal amount as well as interest thereon

- Appeal against decree dismissed - On appeal, held: In viev'I

D of s. 357, a duty is cast upon the civil court to take into consideration the amount paid in the criminal proceeding, even if such plea is not taken by the party - Such order can also be passed by the appellate or revisional court - The mistake

.:c.-

committed by courts below is rectified in exercise of jurisdic-

E tion under Article 136 and 142 of the Constitution - Matter remitted to trial court for preparation of fresh decree - Negotiable Instruments Act, 1881 - ss. 138 and 142.

Appellants issued cheques in favour of the respondent towards payment of loan of Rs. 2,00,0001-. The F cheques were dishonoured. Respondent initiated criminal proceedings uls 200 Cr.P.C. rlw ss. 138 and 142 of Negotiable Instruments Act, 1881. Trial court convicted the appellants and imposed a fine of Rs. 2, 10,0001with default clause. It directed to pay Rs. 2,00,0001out of the fine

G to the respondent. Appellants paid the entire amount of fine. Respondent was paid the amount as directed by the court.

Respondent had also filed civil suit against the ap- -j. pellants. The suit was decreed by trial court for a sum of H 738

-1 D. PURUSHOTAMA REDDY & ANR. v. K. 739 ..,...

SATE ESH

Rs. 3,09,000/-. Appellant deposited Rs. 1,90,000/-. Appeal A against the decree was dismissed.

The question for consideration before this court was whether the court in civil proceeding can pass a money decree without taking into consideration the amount de- B ...... -.- posited in a criminal proceeding .

Partly allowing the appeal, the Court

HELD: 1. The suit was decreed after the order was passed in the criminal proceedings. Deposit of a sum of c Rs. 2,00,000/- by the appellants in favour of the respon- -..

dent was directed by the Criminal Court. Such an order should have been ken into consideration by the Trial Court while passing the decree. [Para 11] [743-D]

2. In terms of sub-section (1) of Section 357 Cr.P.C. a D criminal court is empowered to direct that out of the .,,. amount recovered from an accused by way of fine, com- ..... pensation of a specified amount may be directed to be paid for any loss or injury caused by the offence, when compensation is, in the opinion of the court, recoverable E by a person in a civil court. It is, therefore, evident that the amount of compensation could have been directed to be paid by the criminal court as the same was recoverable by the respondent as against the appellants in a civil court

alo. [Para 11] [743-F-G] F

3. An appeal from a decree, furthermore, is a continuation of suit. The limitation of power on a civil court should also be borne in mind by the appellate court. Such an order can also be passed by the Appellate Court or by the High Court or by the Court of Sessions when exercising G its power of revision. [Para 11] [743-E, 743-H, 744-A]

4. Having regard to the provisions of Sub-section (5) of Section 357 Cr.P.C., a duty was cast upon the High Court to take into account the fact that a sum of Rs. 2,00,000/- had already been paid by the appellants to the respon- H

A dent. It is futile to urge that on the date pn which the civil

court passed the decree, the. appellants were. not convicted. As the appeal is a continuation of the suit and in that view of the matter as the appellants had in total deposited a sum of Rs. 4,00,000/-, Le., Rs. 2, 10,0001.: in the B criminal proceeding and Rs. 1,90,000/- in the-civil proceedings, out of which a sum of Rs. 3,09,000/- has been withdrawn by the respondent, the High Court was obligated to take th~_ same into consideration. Such consideration . wa!? required to be bestowed on the trial court/Higti court • t •• . • • . despite the fact that the said provision was not brought C to its notice. Actus curiae-neminem: gravabit (no person shall

be prejudiced by an .act of court)· is a well-known maxim. (Paras 13,16 and 17] [744-D-F, 747 E-F] ·

Dilip S. Oahanukar v. Kotak Mahindra Co.· Ltd.· and Anr.

D 2007 \6) SCC 528; Manish Jalan v. State of Kamataka JT

2008 (7) SC 643; New India Assurance Co. v. Nusli Neville Wadia and Ani 2007 (14) SCALE 556 - referred to.

5." This Court in exercise of its jurisdiction under Article 136 as also under Article 142 of the Constitution of E India can direct rectification of a mistake committed by the courts below. The matter is remitted to the trial Judge.

Trial Judge is directed to take into cqnsideration the amount of compensation deposited by the appellants in the criminal case and for the said purpose, a fresh decree F should be drawn up while correcting the decree in terms of the order of this Court. While preparation of the fresh decree various dates on which the diverse amounts had been deposited by the appellants should be taken into consideration and calculate the interest payable there- G upon. [Paras 17 and 18] [747 F-G-H, 748 A-B]

Case Law Reference

2007 (6) SCC 528 Referred to: Para 14

JT '2008 (7) SC 643 Referred to. Para 14

2007 (14) SCALE 556 Referred to. Para 15

D. PURUSHOTAMA REDDY & ANR. v. K. 741

....,.,

SATEESH [S.B. SINHA, J]

CIVIL APPELLATE JURllSDICTION : Civil Appeal No.

A 4751 of 2008

From the final Judgment and Order dated 22.12.2006 of the High Court of Karnataka at' Bangalore in Regular First Ap~ peal No. 1171 of 2006 B _, ....

S.N. Bhat for the Appellants.

Jana Kalyan Das for the Respondent.

The Judgment of the Court was delivered by

5.8. SINHA, J : 1. Leave granted. c

2. Whether in a suit for recovery of money on a cheque issued by the defendant but dishonoured, the amount received by the plaintiff-creditor in a criminal proceeding should be adjusted, is the core question involved herein.

D . .,,.

3. Plaintiff - Respondent filed a suit against the appellants, which was marked as O.S. No. 1844 of 2004, for recovery of a sum of Rs. 3,09,000/- with interest. In the plaint, it was averred that Shri K. Balasubramanyam (father of the respondent) and Defendant No. 1 (Appellant No. 1 herein) were good E friends. Defendant Nos. 1 and 2 had been carrying on business. They approached the plaintiff through Shri K.

Balasubramanyam for financial assistance and obtained a loan of Rs. 2,00,000/- (Rs. 1,00,000/- on 15.03.2001 and Rs. 1,00,000/- on 25.03.2001 ). Two promissory notes were also F executed therefor.

4. Defendants - Appellants purported to be in discharge of the said debt issued two cheques bearing Nos. 3960 dated

15.03.2003 and 3959 dated 31.05.2003 drawn on Bank of India, which on presentation, were returned dishonoured. lhdis- G putably, a complaint under Section 200 of the Code of Criminal

...- Procedure, 1973 read with Sections 138 and 142 of the Nego-

~ tiable Instruments Act, 1881 (for short "the Act"), marked as C.C.

No. 19337 of 2003, was filed.

A • A judgment of conviction and sentence against the appellant was passed therein by an order dated 15.12 .2005 sen~ tencing h.im to pay a sum of Rs. 2, 10,000 by way of fine and in

dfault thereof to undergo simple imprisonment for a period of three months. It was also directed that out of the said amount.of s fine, a sum of Rs. 2,00,000/- would be paid to the complainant

byway of compensation in terms of Section 357 of the Code of Criminal Procedure (for short "the Code") and the rmining amount was to be payable to the State. In the said crim.inal proceedings, the appellants deposited a sum of Rs. 31,500/- on c < 7.02.2006, Rs. 68,500/- on 21.07.2006 and Rs. 1,10,000/- on 13.12.2006.

::5. O.S. No. 1844 of 2004 was decreed by the Trial Court by a"j_udgment and order dated 23.01.2006, ordering: ' ··

"This suit is hereby decreed fora sum of Rs, 3;09,000/- (Rupees three lakhs nine thousand only) with .co.urt costs . and.cur:rent-ihterest at 6% p.a. 'on the:principal amounlof . Rs. i, o0,0001from the date of suit till realization. The defenda'nts are jointly and severally liable to pay the decrial . amow:1t."

 -· 6. lri the civil proceedings also, the appellants admittedly have deposited asum of Rs. 1,90,000/-.•An appeal was preferred thereagainst before the High Court of Karnataka at Bangalore marked as R.F.A. No. 1171 of 2006, which by reason of F the:impugned judgment has been dismissed.-·.· ·

.. . .:· ·· ... _

7. The principal contention raised herein is that the Trial Court and consequently the High Court committed a se'rious error in decreeing the suit in its entirety, ~Le.; for a sum ofRs . .. 3,09,0001~ with interest without taking irito consideration the facf G that' an ambLiritof Rs, 2,10,000/- had already been deposited

by the appellants in the said criminal proceedings. -

. ..·; . . . ·' 8, Contention of th.e respondent, however, is .hat as the said question was not and could not have been.raised before.

H . the Trial Court, the impugned judgment is sustainable. It was

'•"f"

furthermore urged that in view of the well-settled principle of law A that pendency of a criminal matter would not be an impediment in proceeding with a civil suit, the impugned judgment should not be interfered with.

9. A suit for recovery of money due from a borrower indisputably is maintainable at the instance of the creditor. It is fur- 8

thermore beyond any doubt or dispute that for the same cause of action a complaint petition under terms of Section 138 of the Act would also be maintainable.

10. The question, however, is as to whether the courts in c one proceeding can issue directions to deposit amount in favour of the plaintiff without taking into consideration the amount deposited by the defendant in the other.

11. We have noticed hereinbefore that whereas the judgment of conviction and sentence was passed on 15.12.2005, D the suit was decreed by the civil court on 23.01.2006. Deposit

...,,. of a sum of Rs. 2,00,000/- by the appellants in favour of the respondent herein, was directed by the Criminal Court. Such an order should have been taken into consideration by the Trial Court.

An appeal from a decree, furthermore, is a continuation of 4 suit. The limitation of power on a civil court should also be borne in mind by the appellate court. Was any duty cast upon the civil court to consider the amount of compensation deposited in terms of Section 357 of the Code is the question. In terms of F ..- sub-section (1) of Section 357 of the Code, a criminal court is empowered to direct that out of the amount recovered from an accused by way of fine, compensation of a specified amount may be directed to be paid for any loss or injury caused by the offence, when compensation is, in the opinion of the Court, re-

G ·. coverable by a person in a Civil Court. It is, therefore, evident that the amount of compensation could have been directed to

~ be paid by the criminal court as the same was recoverable by the respondent as against the appellants in a civil court also.

Such an order can also be passed by the Appellate Court or by H

A the High Court or by the Court of Sessions when exercising its power of revision. . .

12. Sub-section (5) of Section 357 of the Code, which is relevant for our purpose, reads as under:

B "35_7. Order to pay coml?ensation -

*** . *** ***

(5) At the time of awarding com.pensation in any subsequent civil suit relating to thE:f same matter, the Court c shall take into account any sum paid or recovered as compensation under this section."

.13. Evidently, a duty has been cast upon the civil courts to take into account the sum paid or recovere.d as compensation in terms of Section 357 of the Code. It js futiie t6 urge that on the D date. on which the civil court passed the decree the appellants

were not convicted. As noticed hereinbefore, the appeal is a continuation of the sui_t and in that view of the matter as the ap:- pellants had in total deposited a sum of Rs. 4,00,000/-, i.e., Rs.

2~ 10,000/- in the criminal proceeding and Rs. 1,90,000/- in the E civil proceedings, out of which a sum of Rs. 3,09,000/- has been withdrawn by the respondent, the High Court was obligated to take.the same.into consideration. In other words, having regard. to the provisions, of Sub-section (5) of Section 357 of the Code~ a duty was cast upon the High Court to take into account the F fact that.'a sum of Rs. 2,00,000/- had already been paid by the appellants to the respondent. Con.cededly, both the proceedings were maintainable. Law recognizes the same. The Parlia- -... ment must have the situation of this nature in mind while enacting Clause (b) of Sub-section (1) of Section 357 of the Code G arid Sub-section (5) thereof.

14. In Dilip S. Oahanukar v. Kotak Mahindra Co. Ltd. and Another [(2007) 6 SCC 528], while considering a question as to what should be the reasonable amount in the matter of grant ""1 of compensation vis-a-vis the power of the appellate court to H issue an interim direction in relation thereto., this Court held;

"38. The purpose of imposition of fine and/or grant of A compensation to a great extent must be considered having the relevant factors therefor in mind. It may be compensating the person in one way or the other. The amount of compensation sought to be imposed, thus, must be reasonable and not arbitrary. Before issuing a direction B

.:~ to pay compensation, the capacity of the accused to pay the same must be judged. A fortiori, an enquiry in. this behalf even in a summary way, may be necessary. Some reasons, which may not be very elaborate, may also have to be assigned; the purpose being that whereas the power c to impose fine is limited and direction to pay compensation can be made for one or the other factors enumerated out of the same; but sub-section (3) of Section 357 does not impose any such limitation and thus, power thereunder should be exercised only in appropriate cases. Such a D jurisdiction cannot be exercised at the whims and caprice of a judge.

39. If a fine is to be imposed under the Act, the amount of which in the opinion of Parliament would be more than sufficient to compensate the complainaht; can it be said, E that an unreasonable amount should be directed to be paid by the court while exercising its power under subsection (3) of Section 357? The answer thereto must be rendered in the negative. Sub-section (5) of Section 357 also provides for some guidelines. Ordinarily, it should be F lesser than the amount which can be granted by a civil court upon appreciation of the evidence brought before it for losses which might have reasonably been suffered by the plaintiff. Jurisdiction of the civil court, in this behalf, for

realisation of the amount iri question must also be t>orne G in mind. A criminal case is not a substitution for a civil suit, far less execution of a decree which may be passed.

40. Prosecution under the Act may be contemplated as a measure of deterrence, but the same is never meant to be a persecution.

41. Even in a case where violation of fundamental right guaranteed under Article 21 is alleged, the amouht of compensation cannot be arbitrary or unreasonable even under public law."

 [See also Manish Ja/an v. State of Karnataka JT 2008

-B (7) SC 643)

-r~

This Court therein adopted the doctrine of purposive construction. It was opined that compensation directed to be paid should:be a reasonable one. c

15. In. New India Assurance Co. v. Nusli Neville Wadia and Anr. [2007 (14) SCALE 556], it washeld:

"50. Except in the first category of cases, as .has been noticed by us hereinbefore, Sections 4 and 5 of the Act,

D in our opinion, may have to be construed differently in view of the decisions rendered by this Court. If the landlord being a State within the meaning of Article 12 of the Constitution of India is required to prove fairness and reasonableness on its part in initiating a proceeding, it is

E for it to show how its prayer meets the constitutional requirements of Article 14 of the Constitution of India. For proper interpretation not only the basic principles of natural justice have to be borne in mind, but also principles of constitutionalism involved therein. With a view to read the

F provisions of the Act in a proper and effective manner, we are of the opinion that literal interpretation, if given, may give rise to an anomaly or absurdity which must be -A

avoided. So as to enable a superior court to interpret a statute in a reasonable manner, the court must place itself in the chair of a reasonable legislator/ author. So done, .G the rules of purposive construction have to be resorted to which would require the construction of the Act in such a manner so as to see that the object of the Act fulfilled; ...., which in turn would lead the beneficiary under the statutory scheme to fulfill its constitutional obligations as held by H the court inter alia in Ashoka Marketing Ltd (supra).

51. Barak in his exhaustive work on 'Purposive Construe- A . tion' explains various meanings attributed to the term "purpose".

It would be in the fitness of discussion to refer to Purposive Construction in Barak's words:

"Hart and Sc:1chs also appear to trea_t "purpose" as a

s'ubjectie concept. I say "appear'' because, although Hart ' B and Sachs claim that the interpreter should imagine himself or herself in the legislator's shoes,. they introduce two elements of objectivity: First, the interpreter should assume that the legislature is composed of reasonable people seeking to achieve reasonable goals in a reasonable C manner; and second, the interpreter should accept the non-rebuttable presumption that members of the legislative body sought to fulfill their constitutional duties in good faith.

This formulation allows the interpreter to inquire not into the subjective intent of the author, but rather the intent the D author would have had, had he or she acted reasonably."

16. Submission of the learned counsel for the respondent that the said question was not raised before the learned Trial Judge or before the High Court is of no moment. Sub-section

(5) of Section 357 of the Code casts a duty upon the court. It E was for the Trial Court/High Court to take the same into consideration. Such consideration was required to be bestowed despite the fact that the said provision was not brought to its notice.

17. Actus curiae neminem gravabit (no person shall be prejudiced by an act of court) is a well-known maxim. In any event, this Court in exercise of its jurisdiction under Article 136 as also under Article 142 of the Constitution of India can direct rectification of a mistake committed by the courts below.

18. We, therefore, are of the opinion that the impugned judgment should be modified and is directed to be modified accordingly. The matter is remitted to the learned Trial Judge.

The learned Trial Judge is directed to take into consideration

the amount of compensation deposited by the appellants in the H

A criminalcase and for the said purpose, the learned frial Judge should draw up a fresh decree while correcting the decree iri terms of the order of this Court. The learned Trial Judge shall, while preparing a fresh decree, take into consideration the var-ious dates on which the div.erse amounts had been deposited s by the appellants and calculate the interst payable thereupon. ,., '

19. The appeal is allowed to the aforementioned extent. In the facts and circumstances of the case, there shall be no order

a~ to costs.

- ·

K.K.T..

Appeal partly allowed.