2007 Supreme(SC) 487

2007(3) Supreme 379
SUPREME COURT OF INDIA
(From Bombay High Court)
S.B. Sinha & Dalveer Bhandari, JJ.
Dilip S. Dahanukar — Appellant
versus
Kotak Mahindra Co. Ltd. & Anr. — Respondents
Criminal Appeal No. 521 of 2007
(Arising out of S.L.P. (Crl.) No. 3355 of 2006)
With
Criminal Appeal No. 522 of 2007
(Arising out of S.L.P. (Crl.) No. 3490 of 2006)
Decided on 10-4-2007
Counsel for the Parties :
For the Appellant : Kamal Mohan Gupta, Advocate.
For the Respondents : Uday Lalit, Sr. Advocate, Mrs. Nandini Gore and V.N. Raghupathy, Advocates.

IMPORTANT POINT
The Appellate Court while suspending the sentence, is 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. The amount of compensation must be a reasonable sum.

Headnote:(i) Criminal Procedure Code, 1973 — Sections 357(2), (3), 421 and 424 — Negotiable Instruments Act, 1881 — Sections 138 & 141 — Conviction u/s 138 N.I. Act — Sentence to pay compensation — Appeal against conviction — Suspension of sentence — Justifiability — A1, a company and A2 were convicted for offence u/s 138 of the Act — Company was sentenced to pay a fine of Rs. 25,000/- — A2 was sentenced to suffer imprisonment for one month — A2 was also directed to pay compensation of Rs. 15,00,000/- to the complainant — Appellate Court while admitting the appeal, directed them to deposit a sum of Rs. 5 lakhs each — Writ petition — Whether impugned judgment of the High Court is sustainable — (No) — Amount of compensation must be a reasonable sum — Appellant A2 directed to deposit a sum of Rs. 1 lakh — Only fine has been imposed on the company which can be suspended during appeal.

       Held : 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 the 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 simplicitor Section 421 read with Section 424 would be applicable but where fine forms part of the sentence, it would not have any application. (Para 10)

       Compensation is awarded towards sufferance of any loss or injury by reason of an act for which an accused person is sentenced. Although it provides for a criminal liability, the amount which has been awarded as compensation is considered to be recourse of the victim in the same manner which may be granted in a civil suit. So far as Appellant No. 2 is concerned, no fine has been imposed on him. He was directed to pay compensation. (Para 24)

       The purpose of imposition of fine and/or grant of 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 to pay compensation, the capacity of 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 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 jurisdiction cannot be exercised at the whims and caprice of a judge. (Para 35)

       It is also of some significance to note that whereas under Section 357(1) of the Code of Criminal Procedure a fine of Rs. 5000/- can be imposed; fine in terms of Section 357(2) thereof can be twice the amount of cheque whereas there is no upper limit for award of a compensation. But the same would be subject to other provisions of the Code of Criminal Procedure which mandates that the amount of fine imposed on an accused cannot be more than Rs. 5000/-. The very fact that the Parliament did not think it fit to put a ceiling limit in regard to the amount of compensation leviable upon an accused, the discretionary jurisdiction thereto must be exercised judiciously. Ordinarily, an accused shall not be taken in custody during trial. Thus, while exercising the appellate power, ordinarily, a person should not suffer imprisonment only because the conditions imposed for suspending the sentence are harsh. (Para 66)

       We are of the opinion that having regard to the aforementioned factors the amount of compensation not only must be reasonable one, the conditions for suspending the sentence should also be reasonable. It is only with that intent in view, the doctrine of purposive construction should be applied. (Para 67)

       We are prima facie of the opinion (without going into the merit of the appeal) that the direction of the learned Trial Judge appears to be somewhat unreasonable. Appellant herein has been sentenced to imprisonment. Only fine has been imposed on the Company. Thus, for all intent and purpose, the learned Trial Judge has invoked both Sub-sections (1) and (3) of Section 357 of the Code. The liability of the appellant herein was a vicarious one in terms of Section 141 of the Negotiable Instruments Act. The question may also have to be considered from the angle that the learned Trial Judge thought it fit to impose a fine of Rs. 25,000/- only upon the Company. If that be so, a question would arise as to whether an amount of compensation for a sum of Rs. 15 lakhs should have been directed to be paid by the Chairman of the Company. We feel that it is not. (Para 69)

       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 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 357 of the Code of Criminal Procedure; v) No unreasonable amount of compensation can be directed to be paid. (Para 70)

       In the facts and circumstances of the case, we, however, think it reasonable to direct the appellant to deposit a sum of Rs. 1 lakh within a period of four weeks, from date. The Respondent - Company, however, would be entitled to withdraw the said amount. (Para 71)

       (ii) Criminal Procedure Code, 1973 — Section 357(2), (3), 421, 424 — Conviction — Sentence of fine or order to pay compensation — Appeal against conviction — Right of Appellate Court to suspend the sentence — Distinction between sub-sections (1) and (3) of Section 357 Cr.P.C. — Magistrate cannot award compensation in addition to fine — Amount of compensation having regard to sub-section (2) of Section 357 of the Code cannot be recovered forthwith unless the period of appeal expires — No reason as to why the amount of compensation should be held to be automatically payable, although the same is only to be recovered as if a fine has been imposed.

       Held : Although the right of appeal being a vested right cannot be taken away, we must also notice that right of the Court cannot be taken away to suspend the sentence and such a provision would be ultra vires. (Para 22)

       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. (Para 23)

       The fine can be imposed only in terms of the provisions of the Act. Fine which can be imposed under the Act, however, shall be double of the amount of the cheque which stood dishonoured. When, however, fine is not imposed, compensation can be directed to be paid for loss or injury caused to the complainant by reason of commission of the offence. Clause (b) of sub-Section (1) of Section 357 only provides for application of amount of fine which may be in respect of the entire amount or in respect of a part thereof. Sub-Section (3) of Section 357 seeks to achieve the same purpose. (Para 27)

       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. (Para 28)

       If, therefore, under sub-Section (2) of Section 357, realization of fine, at least in respect of the factor(s) enumerated in clause (1) of sub-Section to be stayed automatically, we see no reason as to why the legislative intent cannot be held to apply in relation to amount of compensation directed to be paid in terms of sub-Section (3). (Para 29)

       If realization of an amount of compensation payable to a victim as envisaged under Clause (d) of sub-Section (1) of Section 357 is to be stayed under sub-Section (2) thereof, there is no reason why the amount of compensation payable in terms of sub-Section (3) shall not receive the same treatment. (Para 49)

       (iii) Criminal Procedure Code, 1973 — Section 357(2), (3) — Doctrine of Purposive Interpretation — Stay of order of compensation during appeal — Sub-section (2) of Section 357 was enacted for a definite purpose — It must be given its full effect — Amount of compensation not only must be reasonable one, conditions for suspending the sentence should also be reasonable — It is only with that intent in view, doctrine of purposive construction should be applied. (Paras 58 and 67)

       (iv) Criminal Procedure Code, 1973 — Section 357 — Order to pay compensation — Magistrates cannot award compensation in addition to fine — When a fine is imposed, however, private party has no right to insist that compensation may be awarded to him out of the amount of fine — Power to award compensation under Section 357(3) is not an ancillary power — It is an additional power. (Para 41)

       (v) INTERPRETATION OF STATUTES — Penal Statute — A penal statute, in the event, different meanings are possible to be given, must be construed liberally in favour of an accused — While the Court shall give due weight to the need of the victim, it cannot ignore the right of an accused — In a case of conflict, construction which favours the accused shall prevail. (Paras 56 & 57)

       (vi) Criminal Procedure Code, 1973 — Section 357 — Appeal against conviction — Right to appeal from judgment of conviction must be considered having regard to the fundamental right of an accused enshrined under Article 21 of the Constitution as also the international covenants operating in the field. (Para 64)