TaxTMI 
TaxTMI 
2022 (4) TMI 1148
X X X X Extracts X X X X
X X X X Extracts X X X X
.... India. The respondent presented the said cheque on 16.8.2005 in State Bank of India, Branch Sironj. The bank informed that as said account has been closed, it could not be encashed. Thereafter respondent gave registered notice on 29.8.2005 and demanded money within fifteen days. The petitioner on 31.8.2005 denied to take the said notice. Thereafter, respondent filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioner. 3. After service, petitioner appeared before the learned Magistrate and trial conducted. After completion of trial, the petitioner was convicted under Section 138 of the Negotiable Instruments Act and directed to pay a fine of Rs. 2,50,000/-, out of which, Rs. 2,40,000/- was directed to be paid to the respondent as compensation. Against this, petitioner filed an appeal before the Court of learned Additional Sessions Judge, Sironj. Learned Additional Sessions Judge vide judgment dated 26.8.2010 found that trial of the case was conducted like summons trial and due to Section 29 of Cr.P.C. Judicial Magistrate First Class cannot impose fine of more than 10,000/- and converted the fine of Rs. 2,50,000/- into compensation under Section 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g its powers of revision. (5)At the time of awarding compensation in any subsequent civil suit relating to the same matter, the Court shall take into account any sum paid or recovered as compensation under this section." The trial Court vide judgment dated 10.3.2008 on conviction has not sentenced the petitioner. The trial Court has only imposed fine of Rs. 2,50,000/-. Hence, provisions of Section 357(1)(b) will be attracted. 6. As far as conversion of that fine into compensation under Section 357(3) of Cr.P.C. is concerned, it is illegal because provision of Section 357(3) of Cr.P.C. will come into force only when Court imposes a sentence of which fine does not form a part, but learned Magistrate has not convicted the petitioner for any sentence. 7. In Negotiable Instruments Act, as per provision of Section 138, a Magistrate can punish the accused with imprisonment for a term which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. It is true that as per provisions of Section 29 of Cr.P.C. Judicial Magistrate First Class cannot impose fine of more than Rs. 10,000/-, but in this context amendment of Section 143 dated 6.2.2003 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of compensation under Section 357(1) (b) of the Code. Though a complaint under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1) (b) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome other courts do not grant compensation, the inconsistency, though perfectly acceptable in the eye of the law, will give rise to certain amount of uncertainty in the minds of litigants about the functioning of courts. Citizens will not be able to arrange or regulate their affairs in a proper manner as they will not know whether they should simultaneously file a civil suit or not. The problem is aggravated having regard to the fact that in spite of Section 143(3) of the Act requiring the complaints in regard to cheque dishonour cases under Section 138 of the Act to be concluded within six months from the date of the filing of the complaint, such cases seldom reach finality before three or four years let alone six months. These cases give rise to complications where civil suits have not been filed within three years on account of the pendency of the criminal cases. While it is not the duty of criminal courts to ensure that successful complainants get the cheque amount also, it is their duty to have uniformity and consistency with other courts dealing with similar cases." 18. In the matter of Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, the Supreme Court following the principle o....