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2008(1) Bankmann 175 (Ker.)
KERALA HIGH COURT
R. Basant, J.
Sathyan Ayyappa Sathyan —Petitioner
versus
Yousu and Anr. —Respondents
Criminal Revision Petition No. 3394 of 2006
Decided on 27.9.2006
(ii) Criminal Procedure Code, 1973—Section 357(3) —Compensation—Payment of interest thereon—Permissibility—The expression “such amount as may be specified” appearing in Section 357(3) of Cr.P.C. cannot lead the Court to the conclusion that a direction to pay interest is impermissible—Negotiable Instruments Act, 1881—Section 138. (Para 12)
(iii) Negotiable Instruments Act, 1881—Sections 13, 80, 117 and 138—Dishonour of cheque—Payment of interest—The expression “instrument” referred to in Section 80 must necessarily refer to “Negotiable Instrument” which by definition means a promissory note, bill of exchange or cheque—The cheque hence is a negotiable instrument—Consequently an instrument to which Section 80 of the Act would apply. (Para 17)
(iv) Words and Phrases—Interest—Meaning—Discussed. (Para 19)
(v) Negotiable Instruments Act, 1881—Sections 138, 117, 79 and 80—Dishonour of cheque—Compensation and interest thereon—Permissibility—Under Section 357 of Cr.P.C. Court is invested with powers to direct the accused to pay by way of compensation such amount as may be specified to person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced—When the cheque is dishonoured on the ground of insufficiency of funds etc. and payment is not made despite service of notice of demand, certainly the payee or holder in due course suffers loss by reason of the act for which the accused person has been sentenced—He is hence entitled for compensation under Section 357(3) of Cr.P.C.—The expression “such amount as may be specified” appearing in Section 357(3) of the Cr.P.C. cannot lead two Court to conclusion that a direction to pay interest is impermissible —Criminal Procedure Code, 1973—Section 357(3). (Paras 10 to 12)
(vi) Negotiable Instruments Act, 1881—Sections 138, 117 and 80—Dishonour of cheque—Compensation—Interest thereon—Rate applicable—Merely because interest @ 18% p.a. can be claimed under Section 80 of the N.I. Act , it is not essential that a Court, much less a criminal court, which need only ensure just compensation, should direct payment at that rate—Criminal Procedure Coe, 1973—Section 357(3). (Para 21)
(vii) Negotiable Instruments Act, 1881—Section 138, 117 and 80—Dishonour of cheque—Award of interest on compensation awarded by Court—Desirability—Directions for payment of lump sum amount as compensation without any direction for payment of interest does work out injustice and amount to a premium for the defaulters who succeed in their attempts to drag on proceedings—Criminal Procedure Code, 1973—Section 357(3). (Para 22)
(viii) Negotiable Instruments Act, 1881—Sections 117(9), 79 and 80—‘Amount due upon the instrument—Meaning—Amount due upon the instrument includes the interest payable under Sections 79 and 80 of the N.I. Act—The expression cannot be read down to mean ‘the amount shown as payable in the instrument’—It must be given reasonable and purposive interpretation to include the interest payable also. (Para 18)
Facts of the Case:
Respondents/complainant filed complaint under Section 138 of N.I. Act, 1881 against petitioner/accused for dishonour of a cheque dated 1.11.2004 for Rs. 25,000, the Courts below concurrently came to the conclusion that the complainant has succeeded in establishing all ingredients of the offence punishable under Section 138 of the Act. Accordingly they proceeded to pass the impugned concurrent judgments.
The petitioner faces the sentence of imprisonment till rising of Court. There is a further direction under Section 357(3) of the Cr.P.C. to pay an amount of Rs. 25,000 along with interest at the rate of 12% per annum from 1.11.2004, the date of cheque.
The accused has filed this revision petition raising two contentions. Firstly, the sentence is excessive. Secondly, it is contended that powers under Section 357(3) of Cr.P.C. donot justify a direction to recover interest on the principal amount of compensation.
Findings of the Court
Directions for payment of lump sum amount as compensation without any direction for payment of interest does work out injustice and amount to a premium for the defaulters who succeed in their attempts to drag on the proceedings. The direction to pay interest at a reasonable interest on the principal amount due under the cheque shall eminently cater to the needs of justice.
Result: Revision Petition allowed in part.
R. Basant, J.—Does the Criminal Court have the power to direct payment of interest on the amount of compensation directed to be paid under Section 357(3) of the Cr.P.C. This interesting question arises for consideration in this revision petition which is directed against a concurrent verdict of guilty, conviction and sentence in a prosecution under Section 138 of the N.I. Act.
2. The cheque is for an amount of Rs. 25,000 and bears the date 1.11.2004. Signature in the cheque is admitted. Notice of demand succeeded in evoking only Ext. Dl reply notice. No payment was made. The complainant examined himself as PW1 and proved Exts. P1 to P5. The accused did not adduce any oral evidence. He proved Exts. Dl and D2. The accused raised a plea that the cheque was not issued for the due discharge of any legally enforceable debt/liability; but was issued only as security in a transaction between the wife of the accused and the complainant.
3. The Courts below concurrently came to the conclusion that the complainant has succeeded in establishing all ingredients of the offence punishable under Section 138 of the N.I. Act. Accordingly, they proceeded to pass the impugned concurrent judgments. The petitioner faces the sentence of imprisonment till rising of Court. There is a further direction under Section 357(3) of the Cr.P.C. to pay an amount of Rs. 25,000 along with interest at the rate of 12% per annum from 1.11.2004 the date of the cheque.
4. Called upon to explain the nature of challenge which the petitioner wants to mount against the impugned concurrent judgments, the learned Counsel for the petitioner does not strain to assail the verdict of guilty and conviction. I am satisfied that the stand taken by the learned Counsel for the petitioner is an informed and fair one. I find the verdict of guilty and conviction to be absolutely justified and unexceptionable.
5. The learned Counsel for the petitioner raises two contentions. Firstly, it is contended that the sentence imposed is excessive. Secondly, it is contended that powers under Section 357(3), Cr.P.C. do not justify a direction to recover interest on the principal amount of compensation. The Counsel contends that the power of the Court under Section 357(3), Cr.P.C. is only to direct payment of a specific amount and there can be no direction for payment of any interest on such specific amount directed to be paid.
6. I find merit in the prayer for leniency. I have already adverted to the principles governing imposition of sentence in a prosecution under Section 138 of the N.I. Act in the decision reported in Anilkumar v. Shammy.1 I am not satisfied that there are any compelling circumstances available in this case which would justify the imposition of any deterrent substantive sentence of imprisonment on the petitioner. Leniency can be shown on the question of sentence. But at the same time the Courts cannot ignore the plight of the respondent/complainant who has been compelled to fight three rounds of legal battle and to wait from 2004 for the redressal of his genuine grievance.
7. The interesting legal question that has been raised is whether a direction can be issued under Section 357(3) of the Cr.P.C. to pay as compensation interest on the amount shown in the cheque. The Courts below have directed payment of the principal amount due under the cheque i.e., Rs. 25,000 along with interest at the rate of 12% per annum from 1.11.2004 till the date of realisation. The learned Counsel for the petitioner contends that such a direction is legally impermissible and unacceptable.
8. The question raised is interesting. The learned Counsel were requested to research and make detailed submissions, I place on record my appreciation of the assistance rendered by Mr. V.N. Shankerjee, the young Counsel who was requested to assist this Court as amicus curiae.
9. The first question raised is whether all amounts which can be directed to be paid as compensation out of the fine amount under Sectio
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