IMPORTANT POINT
Sentence in default of compensation – permissible.

JUDGMENT

(Smt.) Ranjana Prakash Desai, J.

1. Leave granted.

2. These two appeals can be disposed of by a common judgment as they arise out of the same facts and challenge the same judgment and order dated 15/12/2011 of the Madras High Court. Special Leave Petition (Crl.) No.2299 of 2012 is filed by accused – R. Mohan (‘the accused’ for convenience) and Special Leave Petition (Crl.) No.3327 of 2012 is filed by complainant – A.K. Vijaya Kumar (‘the complainant’ for convenience).

3. The accused was tried by the Vth Metropolitan Magistrate Court, Egmore, Chennai for an offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the said Act”) and, by order dated 16/4/2004 he was sentenced to undergo 3 months simple imprisonment and to pay compensation of Rs.5 lakhs to the complainant under Section 357(3) of the Code of Criminal Procedure Code (for short, “the Code”), in default, to undergo two months simple imprisonment. In appeal, the IIIrd Additional Fast Track District & Sessions Judge, Chennai confirmed the conviction and sentence. In revision, the High Court confirmed the order of conviction and sentence of three months simple imprisonment and to pay compensation of Rs.5 lakhs, however, the High Court was of opinion that no separate sentence could be awarded in default of payment of compensation when substantive sentence of imprisonment is independently awarded. The High Court, therefore, set aside the sentence in default of payment of compensation. Being aggrieved by the said order of conviction and sentence, the accused has approached this court by way of Special Leave Petition (Crl.) No.2299 of 2012. The complainant has filed Special Leave Petition No.3327 of 2012 being aggrieved by the order of the High Court to the extent it sets aside the order of sentence in default of payment of compensation.

4. The brief facts are as under:

The case of the complainant is that on 10/9/2001, the accused and his wife jointly borrowed a sum of Rs.5 lakhs from him and executed a promissory note in his favour. The accused also issued a cheque dated 14/5/2002 in favour of the complainant towards the principal amount. When the cheque was presented by the complainant with his banker for payment, it was dishonoured with bank’s remark “insufficient funds”. The complainant, thereafter, issued a statutory notice under Section 133 of the said Act. The accused in his reply stated that he had borrowed only Rs.3,00,000/-; that he had paid the said amount and that the cheque was issued only as a security and that it was not returned though demanded. The complainant then filed a Complaint under Section 200 of the Code. During the trial, the complainant examined himself. The accused did not examine any witness in support of his case. He denied the complaint’s case. He relied on an entry from a diary maintained by him showing that as of April, 2002, only a sum of Rs.90,101/- was due and payable by him to the complainant.

5. On these facts, the accused was sent up for trial before the Vth Metropolitan Magistrate, Egmore, Chennai, who convicted him as aforesaid. We have already noted how the matter travelled upto this Court.

6. We have heard Mr. Jayanth Muth Raj, learned counsel appearing for the accused. He submitted that the courts below have fallen into a serious error in convicting the accused. He submitted that the importance of the diary entry (Ex.D1) showing that as of April 2002 only a sum of Rs.90,101/- was due and payable by the accused to the complainant was completely overlooked by all the Courts including the High Court. He pointed out that the complainant has accepted that in the said diary entry, he had, in his own handwriting, acknowledged that only Rs.90,101/- was payable by the accused to him. Counsel submitted that the accused had borrowed only Rs.3,00,000/- and had issued a blank cheque as security. He had repaid that amount. But the complainant misused the cheque. Counsel submitted that the promissory note was not e