2018 (3) TMI 511 - HC - Indian Laws

Compensation Recovery Upheld Despite Acquittal: Key Legal Principles in Play

Yasah Pal Gupta Versus State & Anr.

The Revisional Court upheld the compensation recovery from the petitioner under Section 138 of the Negotiable Instrument Act, despite acquittal initially. ... Recovery of compensation from petitioner - Warrants of attachment - Section 138 of the Negotiable Instrument - Held that: - similar issue decided in the case of Kumaran Versus State of Kerala & Anr [2017 (5) TMI 372 - SUPREME COURT OF INDIA], where it was held that despite the petitioner having undergone the default sentence, the petitioner would remain liable to pay the compensation amount awarded by the Court while sentencing the petitioner. By merely undergoing the default sentence, the accused cannot claim discharge of the liability to pay the compensation amount - petition dismissed - decided against petitioner. Issues:1. Impugning the order of the learned Metropolitan Magistrate seeking to recover compensation.2. Interpretation of Section 138 of the Negotiable Instrument Act.3. Validity of the order of Sentence dated 31.08.2015.4. Challenge to the warrants of attachment issued by the Trial Court.5. Modification of the Trial Court's order by the Revisional Court.6. Applicability of the legal position as laid down by the Supreme Court in Kumaran vs. State of Kerela.Analysis:1. The petitioner challenged the order of the Revisional Court that upheld the recovery of compensation from the petitioner, which was initially sought by the Metropolitan Magistrate. The petitioner was acquitted of the offence under Section 138 of the Negotiable Instrument Act but was later held guilty and sentenced to pay a fine. The Revisional Court modified the Trial Court's order by reducing the additional cost imposed but upheld the compensation amount.2. The complaint against the petitioner was filed under Section 138 of the Negotiable Instrument Act. The petitioner was initially acquitted by the Metropolitan Magistrate but was later found guilty by the High Court and sentenced to pay a fine of Rs. 11,50,000. The petitioner's argument that no compensation amount is payable as the default sentence has been undergone was rejected by the Revisional Court, citing the legal position clarified by the Supreme Court in Kumaran vs. State of Kerela.3. The order of Sentence dated 31.08.2015, sentencing the petitioner to pay a fine of Rs. 11,50,000 and undergo imprisonment for three months in default of depositing the fine, was upheld. The petitioner failed to deposit the fine and served the default sentence. After release, the respondent sought to recover the compensation amount, leading to the legal proceedings challenging the warrants of attachment and subsequent revision petitions.4. The Trial Court directed the issuance of warrants of attachment for the recovery of the compensation amount along with an additional cost. The Revisional Court modified the Trial Court's order by removing the additional cost but upheld the compensation amount based on the legal principles outlined in the judgment of the Supreme Court in Kumaran vs. State of Kerela.5. The Revisional Court correctly applied the legal position established by the Supreme Court in Kumaran vs. State of Kerela, emphasizing that the petitioner remains liable to pay the compensation amount despite undergoing the default sentence. The petitioner's argument that the default sentence absolves them from the liability to pay compensation was dismissed by the Revisional Court, leading to the rejection of the petition by the High Court.6. The legal position clarified by the Supreme Court in Kumaran vs. State of Kerela was crucial in determining the petitioner's liability to pay the compensation amount even after undergoing the default sentence. The Revisional Court's decision to uphold the compensation amount based on this legal interpretation was deemed correct by the High Court, resulting in the dismissal of the petition.