GUJARAT HIGH COURT
Sonia Gokani, J.
Mukundlal Mohanlal Gandhi —Applicant
versus
State of Gujarat and Ors. —Respondents
Crl. Revn. Application No.576 of 2014
Decided on 30.7.2015

IMPORTANT POINT
Compensation under Section 357(3) of Cr.P.C. can be granted only in case where there is no sentence of fine.

Headnote:(A) Negotiable Instruments Act, 1881—Section 138 read with Sections 118 and 139—Criminal Procedure Code, 1973—Sections 397 and 401—Dishonour of cheque—Conviction and sentence—Complainant is Power of Attorney holder— Complaint under Section 138 of NI Act can be filed through power of attorney holder— Complainant’s son who stepped into shoes of complainant duly discharged his initial burden of proving that cheques given were towards legally enforceable debt and he had also withstood cross-examination made by other side—Parties having business deals for long time—It is not at all uncommon for wholesaler to supply goods to parties on credit and if other cheques were on regular basis cleared, they had no reason for not to trust such customers—Courts below rightly held that reply to demand notice was given before complaint and was not a one fold reply—Defence raised by accused is not probable at all—He has thoroughly failed to discharge burden even with preponderance of probability—Both Courts while holding concurrently against applicant have committed no error in either convicting or sentencing applicant for a period of one year—Revision application rejected. (Paras 7, 8, 9, 11, 12.8 and 14)

       (B) Criminal Procedure Code, 1973—Section 357—Grant of compensation—Object is specified to be both, punitive, as also restitutive and compensatory—Object being a single window solution for dishonour of cheque essentially, consistency in approach is expected to achieve the same—Not only punitive aspect alone needs emphasis, restitutive and compensatory aspect also cannot be lost sight of while dealing with these matters— Compensation under Section 357(3) of Cr.P.C. can be granted only in case where there is no sentence of fine.

       Held: The Apex Court has, thus, insisted on uniformity and consistency in the grant of compensation. Different approach of different Courts obviously in the case of dishonour of cheques would give rise to uncertainty in the minds of litigants about functioning of the Courts. They also would be puzzled as to whether there would be requirement of preferring a civil suit. The Court went to the extent of saying that when the Chapter’ XVII of the Negotiable Instruments Act leans in form of reimbursement of loss by compensation, it would be the duty of the Court that successful complainant gets the amount of cheque by way of compensation and levy of fine uniformly to cover the cheque amount and interest thereon at a rate of 9% per annum upto twice the cheque amount as permissible under the law unless the special circumstances warrant otherwise. And, the Court should consider the cheque amount with interest thereon at the rate of 9% per annum followed by the award of compensation from the fine levied in view of section 357(1) of the CrPC. The object is specified to be both, punitive, as also restitutive and compensatory. The object being a single window solution for dishonour of cheque essentially, consistency in approach is expected to achieve the same. Therefore, not only punitive aspect alone needs emphasis, restitutive and compensatory aspect also cannot be lost sight of while dealing with these matters.

       The compensation under section 357 of the CrPC is insisted upon right from the time of the case of Hari Singh v. Sukhbir Singh, reported in AIR 1988 SC 2127, by the Apex Court. The victim of dishonour of cheque is thereby ensured that he/she is not forgotten by the criminal justice system. More so, in a case under the Negotiable Instruments Act, where both civil and criminal remedies get blurred at same stage. Such compensation can be granted under section 357(1) of the CrPC from the fine levied by the Court as

        (i) In defraying the expenses incurred in prosecuting the case;

        (ii) For loss or injury caused by the offence when such compensation is recoverable through civil court;

        (iii) Bearing in mind the compensation permissible under the Fatal Accidents Act, 1855 and

        (iv) In compensating bona fide purchaser of such property for the loss caused if such property is restored in the case of offences of theft, cheating, etc.

        Yet another way of granting is under section 357(3) of the CrPC. Easier it is to implement and execute the order of compensation given from the fine levied under section 357(1) of the CrPC. When compensation cannot be given as fine does not form part of sentence in which under section 357(3) of the CrPC may become necessary to be invoked.

       This Court since is exercising powers under section 397 read with section 401 of the Code of Criminal Procedure, 1973, it can in revisional jurisdiction rectify any illegality and/or error and nongrant of compensation to the complainant when otherwise the Courts found the guilt of the accused /revisionist established duly deserves indulgence.

       For the foregoing reasons, the present Revision Application fails and is, accordingly, rejected. The impugned judgment and order of conviction and sentence dated March 05, 2012 passed by the learned 11th Additional Chief. Judicial Magistrate, Vadodara, in Criminal Case No.1817 of 1999 as well as the judgment and order dated August 20, 20J4 rendered by the learned 3rd Additional District and Sessions Judge, Vadodara, in Criminal Appeal No.36 of 2012, confirming the judgment and order of conviction and sentence, is upheld. However, so far as the sentence of fine is concerned, the same is hereby quashed and set aside since the compensation under section 357(3) of the Code of Criminal Procedure, 1973 can be granted only in the case where there is no sentence of fine. In view of the same, the applicant is directed to pay compensation to the respondent No.2 complainant under section 357(3) of the Code of Criminal Procedure at the rate of 9% per annum on the total amount of cheques of Rs.l,16,400/from the date of filing of the complaint before the trial Court . (Paras 18 and 23)

       Result: Revision Application rejected.