2007 Supreme(SC) 153

2007(2) Supreme 815
SUPREME COURT OF INDIA
(From Madras High Court)
S.B. Sinha and Markandey Katju, JJ.
P. Suresh Kumar—Appellant
versus
R. Shankar—Respondent
Criminal Appeal No. 1335 of 2005
Decided on 8-3-2007
Counsel for the Parties :
For the Appellant : Kailash Vasdev, Sr. Advocate, P.R. Kovilan Poongkuntran, V. Vasudevan, Rakesh K. Sharma, Advocates.
For the Respondent : V. Prabhakar, Ramjee Prasad, V. Subramani, Mrs. Revathy Raghavan, Advocates.

IMPORTANT POINT
Section 138 of the Negotiable Instruments Act is a special statute. Although the power of the Court to impose a fine may or may not be limited, it is not in dispute that the power to award compensation is not.

Headnote:Negotiable Instruments Act, 1881 —Section 138—Dishonour of cheque—Sentence on conviction—Award of compensation—Partnership business—Dispute between appellant and respondent, partners in the firm—Criminal prosecution alleging that bank account was to be operated jointly and that respondent could not have taken out any money from the bank—Pursuant to a compromise entered into by and between the parties, respondent allegedly handed over a post dated cheque for a sum of Rs.7,00,000/- to appellant allegedly as security deposit—Dishonour of cheque on presentation—Complaint petition—Trial Court by a judgment dated 12-10-1998 imposed a fine of Rs.7,05,000/—Out of the said amount, respondent was directed to pay a sum of Rs. 7,00,000/- by way of compensation—In appeal, finding of conviction of respondent was confirmed—Sentence was modified by imposing a fine of Rs. 5,000/- —High Court dismissed revisions filed by the parties confirming the conviction of respondent—Respondent not challenging his conviction —Appeal filed by appellant for enhancement of sentence—Whether Court can consider question of culpability of respondent and pass a judgment of acquittal in his favour—(No)—Whether any case for awarding a substantial sentence has been made out—(No)—Grant of compensation would subserve the purpose—Respondent is directed to pay a compensation of Rs. 7,00,000/- in place of fine of Rs. 5,000/- as directed by the High Court —Criminal Procedure Code, 1973 —Sections 357 and 377.

       Held : Section 138 of the Act is a special statute. It provides inter alia for imposition of fine which may extend to twice the amount of the cheque. We, as at present advised, need not go into the question as to whether having regard to the provisions contained in Sub-section (2) of Section 29 of the Code of Criminal Procedure, the jurisdiction of the Magistrate would be to impose a fine for a sum of Rs. 5,000/- or not in view of the decisions of this Court.(Paras 13 and 14)

       Although the power of the court to impose a fine may or may not be limited, it is not in dispute that the power to award compensation is not. The purpose for which such compensation is to be granted to the complainant whether in terms of clause (b) of Sub-section 1 of Section 357 of the Code of Criminal Procedure or Sub-section (3) of Section 357 is not of much significance for our purpose, although there cannot be any doubt whatsoever that consideration for payment of compensation is somewhat different from payment of fine.(Para 16)

       The basic question, however, which arises for consideration before us is as to whether we, in the peculiar facts and circumstances of this case, can delve deep into the matter so as to find out the culpability of the respondent herein and pass a judgment of acquittal in his favour. We do not think that we should do so. Section 377 of the Code of Criminal Procedure has no application in the instant case. Respondent has not preferred any appeal. Even otherwise the complainant had categorically stated in his complaint petition that although his claim was for a sum of Rs. 12 lakhs which amount the respondent is said to have been withdrawn from the bank in contravention of the terms and conditions of the deed of partnership, he accepted his liability at least to the extent of Rs. 7,00,000/-. It appears from a plain reading of the complaint petition that the respondent had admitted his liability to the extent of Rs. 7,00,000/-. It was found as of fact to be so by the courts below. The said findings do not warrant any interference. The defence raised by the respondent to the effect that the parties had entered into a compromise in the police station and he had to sign a cheque under some threat or coercion had not been accepted by the courts below. There cannot be any doubt whatsoever that had the respondent been able to show that the cheque had been issued not in discharge of a debt but by way of a security pending determination of his liability by an auditor, the matter would have been different. In such an event, the court could have arrived at a finding that the cheque having been issued on the basis of an anticipated profit which by itself did not create any liability in presenti and the result of the audit might have gone either way, no case under Section 138 of the Act was made out. But, the same is not the case here. (Para 20)

       Respondent has not been charged with any fraudulent action. He had a probable defence. Appellant furthermore had not preferred any appeal against the judgment of the learned Trial Judge for enhancement of the sentence. It may be that quantum of compensation has been altered to that of the fine but in effect and substance the same did not matter.(Para 23)

       In our opinion, therefore, interest of justice would be subserved, if the respondent is hereby directed to pay a compensation of Rs.7,00,000/- in stead and place of a fine of Rs.5,000/-, as has been directed by the High Court. Thus, the appellant would be entitled to get the aforementioned sum of Rs. 7,00,000/- by way of compensation.(Para 24)