2024 (6) TMI 748 - HC - Indian Laws

Conviction upheld under Section 138 for cheque dishonour but compensation award ruled unlawful without prior sentence

The Calcutta HC upheld the petitioner's conviction under Section 138 of the Negotiable Instruments Act for dishonour of cheque, finding that mandatory ... Dishonour of Cheque - Conviction and sentence under Section 138 of the Negotiable Instruments Act - presumption under Section 139 N.I. Act in favour of the Complainant/Opposite Party not rebutted - HELD THAT:- The mandatory provisions under Section 138 N.I. Act has also been duly complied with by the complainant - It appears that the cheque has been issued by the petitioner in his personal capacity from his personal account - Thus the findings and order of conviction passed by the Trial Court and affirmed by the Appellate Court is in accordance with law and thus requires no interference by this Court - But the sentencing is clearly not in accordance with law. In the present case the petitioner has been convicted and sentenced to pay Rs. 1,00,000/- as compensation in default to suffer simple imprisonment for a period of twelve months. In Krishan Gupta & Anr. Vs State of West Bengal & Anr. [2007 (3) TMI 834 - CALCUTTA HIGH COURT], it was held that 'The Negotiable Instruments Act provides for sentence of imprisonment and sentence of fine. The compensation is not the part of any sentence neither it is a substitute of sentence but in addition thereto. The provisions of Section 357(3) of the Code makes it abundantly clear that when Court imposes a sentence may order the accused person to pay by way of compensation such amount as may be specified, when fine does not form the part of the sentence. Therefore, no compensation can be awarded without being preceded by imposition of sentence and obviously not by imposition of sentence of fine.' The judgment and order dated 30.03.2019 passed by the learned Sessions Judge, Hooghly in Criminal Appeal No. 6/2018 and the judgment and order of conviction and sentence passed by the learned Judicial Magistrate, 5th Court, Hooghly, in CR No. 98/2013, convicting the petitioner to pay Rs. 1,00,000/- to the complainant as compensation within 30 days in default he shall suffer simple imprisonment for a period of twelve months, as to sentence not being in accordance with law is hereby modified - Application disposed off. Issues Involved:1. Dishonour of cheque for insufficient funds.2. Conviction and sentencing under Section 138 of the Negotiable Instruments Act.3. Compliance with mandatory provisions under Section 138 N.I. Act.4. Validity of compensation awarded without imposition of fine.5. Modification of sentencing.Detailed Analysis:1. Dishonour of Cheque for Insufficient Funds:The petitioner issued a cheque for Rs. 70,000/- which was dishonoured due to insufficient funds. The complainant issued a demand notice, but the petitioner did not pay the amount, leading to the filing of the case.2. Conviction and Sentencing under Section 138 of the Negotiable Instruments Act:The trial court convicted the petitioner and sentenced him to pay Rs. 1,00,000/- as compensation to the complainant within 30 days, failing which he would suffer simple imprisonment for twelve months. This judgment was affirmed by the Sessions Judge, Hooghly. The petitioner then filed a revision.3. Compliance with Mandatory Provisions under Section 138 N.I. Act:The court found that the cheque was dishonoured for 'insufficient funds' and that the petitioner had issued the disputed cheque. The presumption under Section 139 N.I. Act in favor of the complainant was not rebutted by the petitioner. The mandatory provisions under Section 138 N.I. Act were duly complied with by the complainant.4. Validity of Compensation Awarded Without Imposition of Fine:The court referred to several precedents:- In Krishan Gupta & Anr. Vs State of West Bengal & Anr., it was held that compensation cannot be awarded without being preceded by the imposition of any sentence.- In Somnath Sarkar vs Utpal Basu Mallick & Anr., the Supreme Court highlighted that the punishment under Section 138 is more about ensuring payment rather than retribution. The court also noted that the power to levy a fine is limited to twice the cheque amount, and compensation can only be awarded out of the fine levied.- In Tedhi Singh vs Narayan Dass Mahant, the Supreme Court allowed substitution of imprisonment with a fine and additional compensation.5. Modification of Sentencing:The court found that while the conviction was in accordance with the law, the sentencing was not. The judgment and order were modified to substitute the word 'compensation' with 'fine.' The rest of the judgment and order remained unchanged.Conclusion:The judgment and order dated 30.03.2019 by the Sessions Judge, Hooghly, and the judgment and order of conviction and sentence by the Judicial Magistrate, 5th Court, Hooghly, were modified to the extent that the word 'compensation' was substituted with 'fine.' The petitioner was directed to comply with the trial court's order within 30 days, failing which the trial court would proceed in accordance with the law. All connected applications were disposed of, and interim orders were vacated. A copy of the judgment was sent to the trial court for necessary compliance.