Revision petition allowing. High Court held sentence inadequate. Modified compensation to Rs.60k, affirmed 1-day sentence, added 3-month default imprisonment.
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
TUESDAY, THE 17TH DAY OF OCTOBER 2023 / 25TH ASWINA, 1945
CRL.REV.PET NO. 1131 OF 2011
AGAINST THE JUDGMENT DATED 26.09.2009 IN CC NO.366/2007 OF
JUDICIAL MAGISTRATE OF FIRST CLASS, KAYAMKULAM
AGAINST THE JUDGMENT DATED 27.01.2011 IN CRA 459/2009 OF
ADDITIONAL DISTRICT COURT-I,MAVELIKKARA
REVISION PETITIONER/2ND RESPONDENT/COMPLAINANT:
PARAMESWARAN,
S/O. NARAYANAN,
AGED 65 YEARS, MURALI NIVAS,
MENAMPALLY, PATHIYOOR.P.O.,
MAVELIKARA.
BY ADVS.SRI.M.V.THAMBAN
SRI.B.BIPIN
SRI.R.REJI
SMT.REVATHY P.NAIR
SMT.THARA THAMBAN
RESPONDENTS/RESPONDENTS/STATE & ACCUSED:
1STATE OF KERALA
REPRESENTED BY PUBLIC PROSECUTOR,
HIGH COURT OF KERALA,
ERNAKULAM.
2MADHAVAN,
ATTENDER,
OFFICE OF THE DEPUTY DIRECTOR(EDUCATION),
ALAPPUZHA-688001.
BY ADV SRI.VINCENT JOSEPH
OTHER PRESENT:
SR PP SMT SEETHA S
THIS CRIMINAL REVISION PETITION HAVING COME UP FOR
ADMISSION ON 17.10.2023, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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Crl.R.P.No.1131/2011
Dated this the 17th day of October,2023
O R D E R
The revision petition is filed challenging the inadequacy of sentence imposed by the Court of the Additional Sessions Judge-I, Mavelikara (Appellate Court), in Crl.A. No.459/2009 while convicting and sentencing the second respondent for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for brevity, ‘N.I. Act’). The revision petitioner was the complainant and the second respondent was the accused in C.C.No.366/2007 of the Court of the Judicial First Class Magistrate, Kayamkulam (Trial Court), out of which the Crl. Appeal arose. For the sake of convenience, the parties are referred to as per the status before the Trial Court.
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by the accused, in discharge of a legally enforceable debt, got dishonoured on presentation to the bank for collection due to ‘insufficient funds’ in the accused’s bank account. Even though the complainant had issued Ext P4 statutory lawyer notice, the accused refused to pay the demanded amount. Hence, he committed the above offence.
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“138.Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be
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paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless—
(a)the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b)the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque,[within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c)the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.”
under Section 138 of the Act is liable to be sentenced
with imprisonment for a term which may be extended up to two years or with a fine which may extend to twice the amount of the cheque, or with both.
Sayed Babalal H [(2010) 5 SCC 663] observed in the following lines:
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“17. In a recently published commentary, the following observations have been made with regard to the offence punishable under Section 138 of the Act [cited from: Arun Mohan, Some thoughts towards law reforms on the topic of Section 138, Negotiable Instruments Act—Tackling an avalanche of cases (New Delhi: Universal Law Publishing Co. Pvt. Ltd., 2009) at p. 5]:
“… Unlike that for other forms of crime, the punishment here (insofar as the complainant is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque.
If we were to examine the number of complaints filed which were ‘compromised’ or ‘settled’ before the final judgment on one side and the cases which proceeded to judgment and conviction on the other, we will find that the bulk was settled and only a miniscule number continued.”
18. It is quite obvious that with respect to the offence of dishonour of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect.
xxx xxx”
(emphasised)
“17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under Section 357(1) ( b ) of the Code. Though a
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complaint under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1)( b ) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary.
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provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice”.
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Crl.R.P.No.1131/2011
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revision petition.
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the compensation amount;
Sd/-
C.S.DIAS,JUDGE
DST/17.10.23
//True copy//
P.A.To Judge
3 issues framed by the court
Whether the appellant court committed an error in reducing the substantive sentence and omitting to pass a default sentence in a Section 138 case.
Whether the compensation ordered by the appellate court was inadequate given the compensatory nature of Section 138.
Whether a default sentence should be awarded to ensure compliance with the compensation order.
Colour shows how this judgement treated each authority
Sayed Babalal H [(2010) 5 SCC 33.Ker 2013.Cri 581]Referred
Damodar S. Prabhu v. Sayed Babalal HDistinguished¶21
Damodar S. Prabhu v. Sayed Babalal H [(2010) 5 SCC 663] · Who else cites this
R. Vijayan v. BabyDistinguished¶21
R. Vijayan v. Baby [(2012) 1 SCC 260] · Who else cites this
2 provisions across 2 enactments
PARAMESWARAN
STATE OF KERALA
MADHAVAN
C.S. DIAS
As recorded by the court registry
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C.S. DIAS
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