Selvaraj vs N. Jeyaraman

S. Ashok Kumar, J.—This Criminal Revision Case has been filed by the complainant against the order of the learned Judicial Magistrate-I,

Cuddalore for enhancement of sentence and for compensation.

The brief facts of the case are as follows:

(a) The accused borrowed Rs. 75,000/= from the complainant and issued two cheques Exs.P.1 and P.4, dated 27.11.1998 and 21.5.1999 for

Rs. 25,000/= and Rs. 50,000/= respectively. When the cheques were presented, both the cheqeus bounced and returned with a memo for

insufficient funds. The return memos are marked as Exs.P.2 and P.3. Therefore on 7.6.1999, the complainant caused lawyer''s notice on the

accused which are marked as Exs.P.5 and P.6. The acknowledgment card containing the signature of the accused are Exs.P.7 and P.8.

(b) In the reply notice, the accused though contended that he did not receive any money from the complainant, but he admitted that he borrowed a

sum of Rs. 4,000/= from one Thandapani to met the marriage expenses of his daughter and at that time he has signed two promissory notes and

two blank cheques which were handed over to Thandapani and one of those cheque has been used by the complainant at the instance of

Thandapani. Even in the reply notice the accused has not stated that the amount has been paid to Thandapani.

On behalf of the complainant, P.Ws 1 to P.w.3 were examined and Exs.P.1 to P.9 were marked. On behalf of the accused, no witness was

examined and no document was marked. On conclusion of trial and considering the oral and documentary evidence, the learned Judicial

Magistrate came to the conclusion that the offence alleged against the accused u/s 138 of the Negotiable Instruments Act is proved and therefore

convicted and imposed the sentence of three months simple imprisonment and also to pay a fine of Rs. 5,000/= in default to undergo simple

imprisonment for 20 days.

Learned Counsel for the revision petitioner/complainant would contend that the learned Judicial Magistrate has failed to pass an order directing

the accused to pay compensation amount at least equal to that of the amount as mentioned in the cheque. In support of his contention, learned

Counsel for the revision petitioner pressed into service the judgment of the Hon''ble Supreme Court in Suganthi Suresh Kumar v. Jagdeeshan

reported in 2002 SCC 344, wherein Their Lordships have held as follows:

The total amount covered by the cheques involved in the present two cases was Rs. 4,50,000/=. There is no case for the respondent that the

said amount had been paid either during the pendency of the case before the trial court or revision before the High Court or this Court. If the

amounts had been paid to the complainant there perhaps would have been justification for imposing a flea-bite sentence as had been chosen by the

trial court. But in the case where the amount covered by the cheque remained unpaid it should be the lookout of the trial Magistrates that the

sentence for the offence u/s 138 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be

allowed to take dishonour of the cheque issued by him light-heartedly. The very object of enactment of provisions like Section 138 of the Act

would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount at least

during the pendency of the case.

In C.R. Engineering and Constructions (P) Ltd. v. Mesco Kalinga Steels Ltd. reported in 2002 (2) LW. 667, this Court held as follows:

The first accused is a company and accused 2 to 4 are the Directors of the company. Learned Counsel for the accused stated that the

punishment can be imposed depending upon the nature of the offence and ability to pay the fine amount or compensation amount. It is seen from

138 of N.I Act that the punishment prescribed is imprisonment for a term which may extend to one year or with fine which may extent to twice the

amount of the cheque, or with both. It is settled position of law and it has been held in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, a

decision under the Negotiable Instruments Act itself relating to power of both to impose fine and sentence. The Magistrate cannot impose fine

exceeding Rs. 5000/= and High Court not impose fine exceeding Rs. 5000/=, but u/s 357(3) of Criminal Procedure Code, the Magistrate can

award any sum as compensation to be paid to the complainant; but while fixing compensation, Magistrate has to consider what would be

reasonable amount of compensation payable. it is also made clear in the aforesaid decision that strict interpretation should not be given to words

that drawer should have actually received notice for 15 days. The court should not adopt interpretation which helps dishonest evader and clips an

honest payee as that would defeat very legislative measure. It is also stated in Paragraph 29 of the said order that the High Court while convicting

the accused in the same case could not impose a sentence of fine exceeding the said limit of Rs. 5000/=. If that is taken into consideration,l the fine

amount cannot be imposed more than Rs. 5000/=, but a reasonable compensation can be awarded u/s 357(3) of Cr.P.C., which is extracted as

follows:

357 : Order to pay Compensation:

(1)xxxxx

(2)xxxx

(3)When a court imposes a sentence, of which fine does not form a part, the court may, when passing judgment, order the accused person to pay

by way of compensation, such amount as may be specified in the the order to the person who has suffered any loss or injury by reason of the act

for which the accused person has been so sentenced.

The accused have issued number of cheques and they were dishonored on the grounds stated supra. The statutory notice was also issued to

the accused within the period provided under law. The first accused is a firm and the other accused are Directors in the company and in spite of

their having received the notice and having admitted the liability and also sought for extension of time for payment of the amount, they have not paid

the amount. As a result of this, now the complainant company had sustained a loss of Rs. 70 lakhs. I am of the view that the loss sustained by the

complainant company has to be compensated by the accused and for which, a reasonable compensation amount has to be awarded. The accused

have deliberately committed the offence and they cannot escape without any sentence of imprisonment and, as such, I am of the view that the ends

of justice would be best met by imposing sentence of imprisonment and also reasonable amount by way of compensation to the complainant to

make good the loss suffered by them.

For the reasons stated above, the appeal is allowed and the order of acquittal passed by the trial court is set aside and the accused are found

guilty u/s 138 of N.I. Act and convict them. The first accused being a company, is directed to pay a compensation of Rs. 15 lakhs (Rupees Fifteen

Lakhs Only) to the complainant. Accused 2 to 4 are sentenced to suffer rigorous imprisonment for Six months each and to pay a compensation of

Rs. 20 lakhs (Rupees Twenty lakhs only) each to make good the loss sustained by the complainant company.

The trial court is directed to issue non bailable warrant to accused 2 to 4 to undergo the imprisonment and also take steps to collect the

compensation amount.

As per Section 357(4) Cr.P.C., an order under this section may also be made by an Appellate Court or by the High Court or Court of Sessions

when exercising its powers of revision.

Time and again the Hon''ble Supreme Court has held that no drawer of the cheque can be allowed to take dischonour of the cheque issued by

him light-heartedly. According to the Hon''ble Supreme Court, even the attachment of the property of the accused by the complainant in a civil suit

cannot be a ground for lessening the gravity of the offence or for imposing a minor sentence by the trial court. Inspite of notice and during the

pendency of the trial, the accused has not chosen to deposit the amount. By imposing the sentence of imprisonment alone, the complainant cannot

recover the money from the accused. Therefore, the accused is directed to pay a compensation of Rs. 75,000/= (Rupees Seventy five thousand

only) to the complainant within four weeks from the date of receipt of a copy of this order.