TaxTMI 
TaxTMI 
2017 (5) TMI 372
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....ficiency of funds. The requisite demand notice was sent by the complainant to the accused followed by the complaint. Ultimately, the accused was found guilty of the offence under Section 138, and was convicted, stating: "Considering the fact that this is an offence u/s 138 of the Negotiable Instruments Act I do not consider this to be a fit case to be proceeded under the Probation of Offenders Act. I am of the view that simple imprisonment for 4 months for the offence u/s 138 of the Negotiable Instruments Act would meet the ends of justice. The accused is further directed to pay a compensation of Rs. 2,75,000/- to the complainant u/s 357(3) of Cr.P.C. In default of payment of compensation, he shall undergo simple imprisonment for 1 month." 4. The accused challenged the aforesaid judgment before the Court of Sessions, and the Appellate Court, by an order dated 27th April, 2006, confirmed the conviction, but reduced the sentence to imprisonment till rising of the Court. The order to pay compensation with the default clause was, however, sustained. The accused underwent imprisonment till the rising of the Court and also underwent the default sentence for non-payment of compensation....
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....judgment cannot be faulted on any score. 7. Having heard learned counsel for the parties, it is important to set out all the relevant statutory provisions. Section 357 Cr.P.C. reads as under: "357. Order to pay compensation. (1) When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment, order the whole or any part of the fine recovered to be applied- (a) in defraying the expenses properly incurred in the prosecution; (b) in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the Court, recoverable by such person in a Civil Court; (c) when any person is convicted of any offence for having caused the death of another person or of having abetted the commission of such an offence, in paying compensation to the persons who are, under the Fatal Accidents Act, 1855 (13 of1855), entitled to recover damages from the person sentenced for the loss resulting to them from such death ; (d) when any person is convicted of any offence which includes theft, criminal misappropriation, criminal breach of trust, or cheating,....
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....regulating the manner in which warrants under sub-section (1), clause (a), are to be executed, and for the summary determination of any claims made by any person other than the offender in respect of any property attached in execution of such warrant. (3) Where the Courts issue a warrant to the Collector under sub-section (1), Clause (b), such warrant shall be deemed to be a decree, and the Collector to be the decree-holder, within the meaning of the Code of Civil Procedure, 1908, and the nearest Civil Court by which any decree for a like amount could be executed shall, for the purposes of the said Code, be deemed to be the Court which passed the Decree, and all the provisions of that Code as to execution of decrees shall apply accordingly: Provided that no such warrant shall be executed by the arrest or detention in prison of the offender." 9. Section 421 of the present Code reads as follows : "421. Warrant for levy of fine. (1) When an offender has been sentenced to pay a fine, the Court passing the sentence may take action for the recovery of the fine in either or both of the following ways, that is to say, it may- (a) issue a warrant for the levy of the amount by att....
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....his provision, it is clear that a deeming fiction is enacted, viz., that any money other than a fine, (which would include compensation payable under Section 357(3) Cr.P.C.) the method of recovery of which is not expressly provided for, shall be recoverable as if it was a fine. One of the bones of contention in these appeals is the effect of the deeming fiction under Section 431. 12. Section 53 of the Indian Penal Code speaks of punishment to which offenders are liable under the provisions of the Code. Suffice it to say that fine is one of them, but compensation payable is not. 13. Also contained in Chapter III of the Penal Code which is headed "OF PUNISHMENTS" are the provisions of Sections 64 to 70. Section 64 recognises that it shall be competent to the Court which sentences an offender to state that, in default of payment of a fine, the offender shall suffer imprisonment. Section 65 sets the limit to which such imprisonment can go. Section 68 is important and reads as follows : "68. Imprisonment to terminate on payment of fine.- The imprisonment which is imposed in default of payment of a fine shall terminate whenever that fine is either paid or levied by process of law." ....
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...., if the Court considers that there are special reasons for issuing the warrant. I apprehend that the special reasons should be reasons accounting for the fact that the fine has not been recovered before the sentence in default has been served, and any reasons which are directed to that point would be relevant. It may be that the authorities, through no negligence on their part, did not know of the existence of the property or the accused may have inherited property after he served his sentence in default; or there may not have been time to execute the warrant. Matters of that sort would all be special reasons for issuing a warrant after the sentence in default had been served; and I think, in the same way, they are reasons justifying the Court in refusing to withdraw a warrant already issued. In the present case, in my opinion, there are special reasons, though not quite those which were recorded by the Judge. I think that a special reason for not withdrawing the warrant is that before the sentence in default had been served the authorities had taken steps to enforce this warrant by levying execution, upon the immoveable property of the applicant, and the delay which has taken pla....
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....ed, and if such offender has undergone the whole of such imprisonment in default, no Court shall issue such warrant unless for special reasons to be recorded in writing it considers it necessary to do so." The absence of any specific provision to the effect that the fine shall not be realisable if the whole of the period of imprisonment for default has been undergone and the language of the proviso to sub-sec. (1) of Sec. 386, Cr. P.C. lead to the conclusion that the undergoing of imprisonment awarded in default of payment of the fine does not operate as a discharge or satisfaction of the fine which may nevertheless be levied in the manner prescribed by Sec. 386(1), Cr. P.C." 18. A Single Judge of the Kerala High Court in Saji Kumar vs. Soman Pillai, 2006 (3)KLT 679, set out Section 421 of the Code of Criminal Procedure and held that the fiction contained in Section 431 Cr.P.C. must be extended logically until its object is accomplished. A non-fine must be deemed to be a fine for the purpose of recovery, and until recovery is complete, the fiction must continue. Having so held, the learned Judge stated that the proviso to Section 421(1) would apply not merely to Section 357(1), ....
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....tioner has no means now to pay the same, it can be recovered from any property acquired by him within the period specified. Even his death will not discharge from the liability any property which would, after his death be legally liable for his debts. (Section 70, Penal Code, corresponding to S. 59, Travancore Penal Code)." 22. In K. Vemmana Shenoy v. Collector of South Kanara, AIR 1964 Mys. 64, a Single Judge of that High Court adverted to the amending Act of 1923, by which a substantial change was made to Section 386 of the Cr.P.C., which made it clear that the offender should not be made to pay fine as well as undergo imprisonment in default of payment of the fine in the absence of special reasons to be recorded in writing. The learned Single Judge held that Section 70 IPC read with Section 386(1) proviso would necessarily lead to the conclusion that in the absence of special reasons to be recorded in writing, the fine cannot be recovered after the offender has undergone imprisonment in default of payment. 23. A conspectus of the aforesaid judgments would show that compensation under the old Cr.P.C. was always recoverable as a part of fine, and that even after default imprison....
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...., recovery of the fine should be pursued, and in such cases, the fact that the sentence of imprisonment in default has been fully undergone should not be a bar to the issue of a warrant for levy of the fine. We recommend that the proviso to section 386(1) should make this clear." 24. Following paragraph 28.10, the words "or unless it made an order for the payment of expenses or compensation out of the fine under Section 357" was added to the proviso which was contained in old Section 386(1) and continued in Section 421(1). 25. At this juncture, it is important to note that in Vijayan v. Sadanandan K. (2009) 6 SCC 652, this Court held : "29. To appreciate the said legal position, the provisions of Section 431 are set out hereinbelow: "431. Money ordered to be paid recoverable as fine. -Any money (other than a fine) payable by virtue of any order made under this Code, and the method of recovery of which is not otherwise expressly provided for, shall be recoverable as if it were a fine: Provided that Section 421 shall, in its application to an order under Section 359, by virtue of this section, be construed as if in the proviso to sub-section (1) of Section 421, after the word....
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....en directed to be paid, albeit under Section 357(3), Section 431, Section 70 IPC and Section 421(1) proviso would make it clear that by a legal fiction, even though a default sentence has been suffered, yet, compensation would be recoverable in the manner provided under Section 421(1). This would, however, be without the necessity for recording any special reasons. This is because Section 421(1) proviso contains the disjunctive "or" following the recommendation of the Law Commission, that the proviso to old Section 386(1) should not be a bar to the issue of a warrant for levy of fine, even when a sentence of imprisonment for default has been fully undergone. The last part inserted into the proviso to Section 421(1) as a result of this recommendation of the Law Commission is a category by itself which applies to compensation payable out of a fine under Section 357(1) and, by applying the fiction contained in Section 431, to compensation payable under Section 357(3). 28. As is well known, a legal fiction is not to be extended beyond the purpose for which it is created or beyond the language of the section by which it is created. For example, see Prakash H. Jain v. Marie Fernandes, (....