The Supreme Court last week held that compensation may be recoverable from a convict in cheque bouncing cases even after he undergoes imprisonment for failing to pay up..A Bench of Justices Rohinton Fali Nariman and Navin Sinha was deciding an appeal from a judgment of the Kerala High Court in which the appellant was ordered to pay compensation in a cheque bouncing case..The appellant had borrowed a sum of Rs. 2.75 lakh from the complainant. Later, he issued a cheque to the complainant, which was dishonoured due to insufficiency of funds, and was consequently approached against under Section 138 of the Negotiable Instruments Act. Ultimately, the appellant was found guilty of the offence and was convicted..The Magistrate sentenced the appellant to imprisonment of four months and directed him to pay the complainant Rs. 2,75,000 by way of compensation. The judge also held that should the appellant fail to pay the compensation, another month would be added to his sentence..On appeal, the Court of Sessions and the Appellate Court confirmed the conviction but reduced the sentence to imprisonment till the rising of the Court. The appellant underwent the said imprisonment, including the default sentence for non-payment of compensation..Then, the complainant issued a distress warrant against the appellant in order to recover the compensation due to him. The High Court, in a judgment dated August 8, 2012, upheld the orders of the Magistrate and held that despite the fact that the default sentence was undergone, compensation was recoverable..Appearing for the appellant before the Supreme Court, Siddharth Dave argued that the High Court judgment was liable to be set aside because it failed to record reasons for directing payment of compensation after the sentence was served, as was required under Section 421 of the Code of Criminal Procedure..The basis of the apex court’s decision hinged on the effect of the deeming fiction created under Section 431 of the Cr.PC, which states,.“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 words and figures “under section 357”, the words and figures “or an order for payment of costs under section 359” had been inserted.”.Section 421 states,.“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 attachment and sale of any movable property belonging to the offender;.(b) issue a warrant to the Collector of the district, authorising him to realise the amount as arrears of land revenue from the movable or immovable property, or both, of the defaulter.Provided that, if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, 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 so to do, or unless it has made an order for the payment of expenses or compensation out of the fine under section 357.”.The Court held that post the 1973 amendment to the Cr.PC., it was no longer mandatory for the judge to record special reasons while issuing such a warrant. The amendment to this Section came into to place after a recommendation from the Law Commission in its 41st Report. That report stated,.“A contumacious offender should not, in our opinion, be permitted to deprive the aggrieved party of the small compensation awarded to it by the device of undergoing the sentence of imprisonment in default of payment of the fine.”.Thus, the Court held that the object of the legal fiction created by Section 431 extends to the purpose of recovery of compensation until such recovery is completed, and that would apply to Section 421 and other provisions in the Cr.PC. and the IPC as well..“The deeming provision in Section 431 will apply to Section 421(1) as well, despite the fact that the last part of the proviso to Section 421(1) makes a reference only to an order for payment of expenses or compensation out of a fine, which would necessarily refer only to Section 357(1) and not 357(3)….…so long as compensation has been 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”…”.Therefore, the Court upheld the decision of the Kerala High Court and dismissed the appeals..Read judgment:
The Supreme Court last week held that compensation may be recoverable from a convict in cheque bouncing cases even after he undergoes imprisonment for failing to pay up..A Bench of Justices Rohinton Fali Nariman and Navin Sinha was deciding an appeal from a judgment of the Kerala High Court in which the appellant was ordered to pay compensation in a cheque bouncing case..The appellant had borrowed a sum of Rs. 2.75 lakh from the complainant. Later, he issued a cheque to the complainant, which was dishonoured due to insufficiency of funds, and was consequently approached against under Section 138 of the Negotiable Instruments Act. Ultimately, the appellant was found guilty of the offence and was convicted..The Magistrate sentenced the appellant to imprisonment of four months and directed him to pay the complainant Rs. 2,75,000 by way of compensation. The judge also held that should the appellant fail to pay the compensation, another month would be added to his sentence..On appeal, the Court of Sessions and the Appellate Court confirmed the conviction but reduced the sentence to imprisonment till the rising of the Court. The appellant underwent the said imprisonment, including the default sentence for non-payment of compensation..Then, the complainant issued a distress warrant against the appellant in order to recover the compensation due to him. The High Court, in a judgment dated August 8, 2012, upheld the orders of the Magistrate and held that despite the fact that the default sentence was undergone, compensation was recoverable..Appearing for the appellant before the Supreme Court, Siddharth Dave argued that the High Court judgment was liable to be set aside because it failed to record reasons for directing payment of compensation after the sentence was served, as was required under Section 421 of the Code of Criminal Procedure..The basis of the apex court’s decision hinged on the effect of the deeming fiction created under Section 431 of the Cr.PC, which states,.“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 words and figures “under section 357”, the words and figures “or an order for payment of costs under section 359” had been inserted.”.Section 421 states,.“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 attachment and sale of any movable property belonging to the offender;.(b) issue a warrant to the Collector of the district, authorising him to realise the amount as arrears of land revenue from the movable or immovable property, or both, of the defaulter.Provided that, if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, 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 so to do, or unless it has made an order for the payment of expenses or compensation out of the fine under section 357.”.The Court held that post the 1973 amendment to the Cr.PC., it was no longer mandatory for the judge to record special reasons while issuing such a warrant. The amendment to this Section came into to place after a recommendation from the Law Commission in its 41st Report. That report stated,.“A contumacious offender should not, in our opinion, be permitted to deprive the aggrieved party of the small compensation awarded to it by the device of undergoing the sentence of imprisonment in default of payment of the fine.”.Thus, the Court held that the object of the legal fiction created by Section 431 extends to the purpose of recovery of compensation until such recovery is completed, and that would apply to Section 421 and other provisions in the Cr.PC. and the IPC as well..“The deeming provision in Section 431 will apply to Section 421(1) as well, despite the fact that the last part of the proviso to Section 421(1) makes a reference only to an order for payment of expenses or compensation out of a fine, which would necessarily refer only to Section 357(1) and not 357(3)….…so long as compensation has been 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”…”.Therefore, the Court upheld the decision of the Kerala High Court and dismissed the appeals..Read judgment:
