Cheque dishonour conviction and default sentence for compensation upheld; enforceability of victim compensation cannot be illusory.

Cheque dishonour conviction was upheld because the promissory note, cheque, reply notice and income-tax returns supported the complainant's loan claim, while the accused failed to prove fabrication or that the cheque was only a security instrument. A default sentence for non-payment of compensation under Section 357(3) CrPC was held valid because compensation must be effective and enforceable, and that enforcement is not confined to recovery as a fine under Section 421; the order restoring imprisonment in default of payment was affirmed.

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Issues: (i) Whether the conviction for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 was sustainable on the evidence; (ii) whether a sentence in default of payment of compensation awarded under Section 357(3) of the Code of Criminal Procedure, 1973 could validly be imposed.

Issue (i): Whether the conviction for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 was sustainable on the evidence.

Analysis: The promissory note and cheque supported the complainant's version of a loan of Rs. 5 lakhs. The accused did not adduce evidence to establish that the documents were fabricated or that the cheque was merely a security instrument. The diary entry relied upon by the accused was found not to displace the loan transaction reflected in the promissory note, the cheque, the reply notice, and the income-tax returns showing the amount due from the accused.

Conclusion: The conviction and substantive sentence were upheld against the accused.

Issue (ii): Whether a sentence in default of payment of compensation awarded under Section 357(3) of the Code of Criminal Procedure, 1973 could validly be imposed.

Analysis: Compensation under Section 357(3) is intended to give effective relief to the victim, and its enforcement is not confined to recovery under Section 421 of the Code of Criminal Procedure, 1973. Reading Sections 357(3), 421 and 431 of the Code together, and in light of the principle recognised in prior decisions, the order awarding compensation can be backed by a default sentence so that the direction is effective and not illusory. Section 64 of the Indian Penal Code, 1860 also supports the concept of imprisonment for non-payment of fine, reinforcing the enforceability of the compensation order by default imprisonment.

Conclusion: The default sentence was valid and the contrary view taken by the High Court was incorrect.

Final Conclusion: The challenge to the conviction failed, while the complainant succeeded on the legality of the default sentence. The order of the Magistrate restoring imprisonment in default of payment of compensation was affirmed.

Ratio Decidendi: Compensation awarded under Section 357(3) of the Code of Criminal Procedure, 1973 may be enforced by a sentence in default of payment, and such enforcement is not confined to recovery as a fine under Section 421 of the Code.

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