Compensation under Section 357(3) of CrPC must be reasonable and not exceed the actual loss suffered, aligning with the cheque amount in dishonor cases.

Order :

(Sanjay K. Agrawal, J.)

1. The short question involved in this batch of criminal revisions filed under Section 397 read with Section 401 of the Code of Criminal Procedure (for short the “CrPC”) is:

“whether the criminal Court and the appellate Court are justified in granting compensation to the extent of Rs.2,00,000/-, which is more than the cheque amount i.e. Rs.15,52,985/-, in exercise of power conferred under sub-section (3) of Section 357 of CrPC ?

2. The aforesaid question of law arises for consideration on the following factual backdrop:

2.1 It is the case of complainant- Heetanand Agrawal (hereinafter referred to as the “complainant”) that accused- Raj Agrawal (hereinafter referred to as the “accused”) issued a cheque bearing No.60744 for an amount of Rs.15,52,985/- on 05.10.2009 in token of his liability to him, which stood dishonored on 13.10.2009 on account of insufficiency of funds. Thereafter, the complainant firstly served legal notices to the accused on 21.10.2009 & 10.11.2009 and, ultimately, he filed criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short the “NI Act”) on 10.12.2009, in which, the accused took a defence that the amount claimed by the complainant i.e. Rs.15,52,985/- is not correct and produced documents (Ex.D/7 to D/16) in support of his defence. However, the jurisdictional criminal Court vide its judgment of conviction and order of sentence dated 16.09.2014 allowed the complaint of the complainant and convicted the accused for offence under Section 138 of NI Act and sentenced him to undergo rigorous imprisonment for 01 year and further granted compensation in exercise of power under Section 357(3) of CrPC to the extent of Rs.20,00,000/- in favour of the complainant and, in failure to pay the compensation, sentenced to undergo additional rigorous imprisonment for 03 months.

2.2 Feeling aggrieved against the said judgment of conviction and order of sentence dated 16.09.2014, the accused preferred appeal under Section 386 of CrPC before the appellate Court, in which, vide impugned order dated 09.10.2015, the appellate Court while partly allowing the appeal of the accused though modified/reduced the sentence of 01 year rigorous imprisonment till the rising of the Court, but maintained the compensation of Rs.20,00,000/- payable by the accused to the complainant alongwith default stipulation.

2.3 Further feeling aggrieved by the order of the appellate Court dated 09.10.2015, the accused has preferred Criminal Revision No.1065 of 2015 before this Court stating that the grant of compensation to the tune of Rs.20,00,000/- is in excess and on higher side, as in exercise of power conferred under Section 357(3) of CrPC, the same cannot be granted and, according to the accused, at the best, without admitting, the total liability on the accused would be only around Rs.12,00,000/- and, therefore, the compensation granted by the criminal Court to the extent of Rs.20,00,000/-, as also affirmed/maintained by the appellate Court, is to be modified/reduced accordingly. On the other hand, the complainant has also preferred Criminal Revision No.983 of 2015 against the order passed by the appellate Court dated 09.10.2015 seeking enhancement of the jail sentence to the accused.

3. Since the common questions of fact and law are involved and being arising out of a common impugned order, on the joint request of learned counsel for the parties, both the criminal revisions are clubbed together, heard together and are decided by this common order.

4. Mr. Manoj Paranjpe, learned counsel appearing for the accused in CRR-1065-2015 would submit that both the Courts below have legally and concurrently erred in granting compensation more than the cheque amount, as it is not a case of imposition of fine sentence. He would rely upon the document (Ex.P/1) filed by the complainant before the criminal Court to contend that total amount which might be recoverable from the accused is Rs.15,52,985/- (princi