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2021 Supreme(Chh) 283

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
SANJAY K. AGRAWAL, J.
Smt. Sutapa Mukharjee, Wd/o Lt. Shri Sudeep Kumar Mukharjee – Appellant
Versus
State of Chhattisgarh – Respondent
WPCR No. 739 of 2019
Decided on : 18-03-2021

Advocates:
Advocate Appeared:
For the Appellant :Mr. Anish Tiwari, Advocate
For the Respondent:Mr. Ravi Bhagat, Mr. Faiz Kazi, Advocate

Headnote:

Negotiable Instruments Act, 1881 - Section 138 – Criminal Procedure code,1973 - Section 421 – Dishonoured of Cheque – Contingent imprisonment - Petitioner's husband namely was convicted for offence punishable under Section 138 of Negotiable Instruments Act, 1881 by judgment and he was sentenced to imprisonment for one year along with a compensation of payable to respondent No. 2 and it was further directed that in event of nonpayment of said compensation amount, he would have to serve jail sentence for three months.- Said judgment of conviction was appealed by petitioner's husband but ultimately, appeal stood dismissed by appellate authority on In meanwhile, recovery proceeding under Section 421 of CrPC was initiated by respondent No. 2 for realizing amount of compensation, but unfortunately petitioner's husband died on and now, proceeding for recovery of compensation/fine amount is pending against petitioner which has been called in question by her in instant writ petition – Held, Court, in view of authoritative pronouncement of Supreme Court in petitioner's contention that she is not liable to pay compensation amount as her husband has already served substantial as well as default jail sentence is liable to be and is hereby rejected.- However, petitioner's objection of compensation amount being non-recoverable on any legally permissible ground including based on Section 70 of IPC can always be raised before Court where application under Section 421 of CrPC is pending and in that event, said Court would consider and dispose of said objection/application after hearing the parties strictly in accordance with law - writ petition dismissed

Judgement Key Points

Key Points: - (!) The Supreme Court Kumaran (supra) principle holds that compensation under Section 138 NI Act remains recoverable under Section 421(1) CrPC even after default imprisonment has been served. (!) - (!) The deeming fiction of Section 431 CrPC extends to Section 421(1) and to compensation under Section 357(3), enabling recovery despite prior default imprisonment. (!) - (!) The last part of Section 421(1) proviso allows recovery of a fine-ordered compensation via levy warrants even after default imprisonment, as per the Law Commission recommendation; recovery is not barred by default imprisonment. (!) - (!) The petitioner’s contention that compensation cannot be recovered due to service of default and substantive sentences is rejected; recovery can proceed. (!) - (!) However, objections based on legally permissible grounds, including Section 70 IPC, can be raised before the Court during Section 421 CrPC proceedings and decided in accordance with law. (!) - (!) The writ petition is dismissed with no cost. (!) - (!) The decision cites Kumaran v. State of Kerala & Anr., (2017) 7 SCC 471 as controlling authority. (!) - (!) The Court recognizes the ongoing recovery proceedings despite death of the debtor, focusing on recoverability as per statutory framework. (!)

What is the recoverability of compensation under Section 421 CrPC when the accused has already served substantive and default jail sentences for non-payment in a case under Section 138 NI Act?

What is the effect of Section 431 CrPC and the deeming fiction on recovering compensation under Section 421(1) when default imprisonment has been undergone?

What are the permissible grounds (e.g., under Section 70 IPC) on which a Court can raise objections to recovery of compensation under Section 421 CrPC, and how should such objections be heard?


ORDER :

1. Petitioner's husband namely Sudeep Kumar Mukharjee was convicted for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 by judgment dated 05/01/2012 and he was sentenced to imprisonment for one year along with a compensation of Rs. 3,00,000/- payable to respondent No. 2 and it was further directed that in the event of nonpayment of said compensation amount, he would have to serve jail sentence for three months. The said judgment of conviction was appealed by petitioner's husband but ultimately, the appeal stood dismissed by the appellate authority on 06/10/2012. In the meanwhile, recovery proceeding under Section 421 of CrPC was initiated by respondent No. 2 for realizing the amount of compensation, but unfortunately petitioner's husband died on 04/07/2015 and now, the proceeding for recovery of compensation/fine amount is pending against the petitioner which has been called in question by her in the instant writ petition.

2. Mr. Anish Tiwari, learned counsel for the petitioner, would submit that since petitioner's husband has already served jail sentence of one year as well as default sentence of another three months for nonpayment of compensation, no proceeding under Section 421 of CrPC for recovery of compensation would lie and the compensation amount cannot be recovered. Even otherwise, the compensation could also not be recovered as per Section 70 of IPC, as such, the instant writ petition be allowed and the recovery proceeding pending against the petitioner be quashed.

3. Mr. Faiz Kazi, learned counsel for respondent No. 2, would submit that in view of the decision rendered by the Supreme Court in the matter of Kumaran v. State of Kerala & Anr., (2017) 7 SCC 471 even if substantive jail sentence as well as default sentence both have been served, yet the compensation amount has to be recovered from the accused/his legal heirs, as such, the instant writ petition deserves to be dismissed. However, any objection with regard to Section 70 of IPC can be raised by the petitioner before the authority where the application under Section 421 of CrPC is pending.

4. I have heard learned counsel for the parties, considered their rival submissions made hereinabove and went through the records with utmost circumspection.

5. It is not in dispute that petitioner's husband has already served the substantive jail sentence of one year awarded to him by the trial Court as affirmed by the appellate Court. It is also not in dispute that in default of nonpayment of the compensation amount, petitioner's husband has also served the jail sentence for another three months. Thereafter, at the instance of respondent No. 2, recovery proceeding under Section 421 of CrPC was initiated against petitioner's husband but in the meanwhile, he died on 04/07/2015 and now, the said proceeding is pending against the petitioner for recovery of compensation amount despite serving of default sentence for three months, which is sought to be questioned in this writ petition.

6. Their Lordships of the Supreme Court in the matter of Kumaran (supra) pose the following question for consideration :

    “The present appeals raise an interesting question as to whether when compensation is ordered as payable for an offence committed under Section 138 of the Negotiable Instruments Act, and in default thereof, a jail sentence is prescribed and undergone, is compensation still recoverable.”

7. Their Lordships considered the issue with reference to Section 421 and 431 of CrPC and held that even though a default sentence has been suffered by the accused, yet, compensation would be recoverable in the manner provided under Section 421(1) of CrPC, which states as under :

    “27. These two judgments make it clear that the deeming fiction of Section 431 CrPC extends not only to Section 421, but also to Section 64 of the Penal Code. This being the case, Section 70 IPC, which is the last in the group of sections dealing with sentence of imprisonment for non payment

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