Full Judgment Text
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CASE NO.:
Appeal (crl.) 1335 of 2005
PETITIONER:
P. Suresh Kumar
RESPONDENT:
R. Shankar
DATE OF JUDGMENT: 08/03/2007
BENCH:
S.B. Sinha & Markandey Katju
JUDGMENT:
J U D G M E N T
S.B. SINHA, J :
The parties hereto were partners. The partnership business ran into
rough weather. Appellant intended to initiate some criminal proceedings
against the respondent. Allegedly, the bank account was to be operated
jointly. Respondent alone as a partner, thus, could not have taken out any
money from the bank. However, allegedly, he did so. According to the
respondent, a compromise was entered into by and between the parties in a
police station on the following terms:
"1) Both the firms accounts right from inception
till date shall be finalized and the share of profits
determined by an independent auditor, Mr. R. Kasi
Viswanathan. His determination shall be final and
binding on both the parties.
2) The above scrutiny and finalization shall be
completed before 31.1.1996. Until such time, we
shall not raise any dispute against each other.
3) Till such finalization, Mr. Shankar shall
handover a cheque (cheque No. 551661 dated
31.1.96) for Rs. 7 lakhs to Mr. Suresh Kumar as
security deposit.
4) If the share of profits for Mr. Suresh Kumar is
more than 7 lakhs, he shall encash the cheque and
shall also receive the balance amount from
Shankar forthwith. If the share of profits is less
than 7 lacs, Suresh Kumar shall return the said
cheque and Shankar shall pay Suresh Kumar a
draft for the amount of profits determined. If any
profit is due to Shankar, Suresh Kumar shall pay
the same to Shankar forthwith."
Pursuant thereto or in furtherance thereof, the respondent allegedly
handed over a post dated cheque for a sum of Rs. 7,00,000/- to the appellant.
As the said cheque was dishonoured on presentation, a complaint petition
was filed by the appellant inter alia alleging:
"3\005Further the accounts in the Bank are joint
accounts and the cheques can be drawn only by
both of partners on any account and not by one
partner.
4. The Complainant submits that the accused has
taken some amounts from the Bank and the bills
also encashed by him for his own gain without
concern of complainant. Therefore the accused
has agreed to pay the profits sharing of a sum of
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Rs. 12 lacs towards the complainant. But he
agreed to pay advance share of profit which he
owes to the complainant till appropriate audit and
accounting is made, the accused has given a sum
of Rs. 7 lacs by cheque No. 551661 dated
31.1.1996 drawn of Syndicate Bank,
Kodambakkam Branch as assured. The accused is
to settle the entire due towards the complainant
before 31.1.1996.
5. The complainant submits that the accused has
not informed the complainant anything about the
stop payment or requesting not to present the
cheque. Therefore, in good faith the complainant
has presented the cheque on 31.1.1996 through his
Bankers Syndicate Bank, Kodambakkam Branch
through his S.B. Account No. 10521. And the
complainant has received an intimation from the
Bankers that the payment stopped by the drawer
and thus the cheque is dishonoured. The
complainant has also verified whether the accused
has sufficient funds in the Bank account on 31.1.96
but to his shock found that the accused was not
having sufficient funds to honour the cheque on
31.1.96. Therefore the complainant has issued a
lawyer’s notice dt. 3.2.1996 to the accused stating
that the dishonouring of the cheque and the
accused caused complainant mental agony and
demanded the cheque amount to be paid to the
complainant within 15 days from the date of
receipt of the notice. The accused has received the
notice on 6.2.1996 but he has preferred no reply to
the notice even after 15 days and he has not paid
the cheque amount till date."
The learned Trial Judge, however, found the said defence of the
respondent to be not acceptable. The learned Magistrate by a judgment and
order dated 12.10.1998 imposed a fine of Rs. 7,05,000/- and directed that if
the respondent fails to remit, he will undergo three months simple
imprisonment. Out of the said amount, he was directed to pay a sum of Rs.
7,00,000/- by way of compensation and the remaining sum of Rs. 5000/- was
to be credited to the Government.
An appeal thereagainst was filed by the respondent. The learned
Additional Sessions Judge partially allowed the said appeal stating:
"22. In the result, this Criminal Appeal is partly
allowed thereby the finding of conviction against
the accused under Sec. 138 of Negotiable
Instrument Act is confirmed and the sentence is
modified to the effect that the appellant/ accused
should pay a fine of Rs. 5,000/- (Rupees five
thousand only) under Sec. 138 of Negotiable
Instrument Act and in default to undergo three
months simple imprisonment and the order of the
learned Magistrate in awarding compensation is set
aside. There is no order as to cost. The appellant/
accused will be entitled to get back the amount
deposited by him less the fine amount, now
imposed, and entitled to get back the bank
guarantee and other security deeds filed by him in
this case after the time for revision or appeal is
over or after the revision or after if any preferred is
over."
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Appellant herein preferred a revision application before the High
Court which was marked as R.C. No. 1213 of 2001 whereby and whereunder
modification was made by the appellate court in relation to the quantum of
fine.
Respondent filed a criminal revision against the said order which was
marked as Criminal R.C. No. 713 of 2001. The High Court dismissed both
the civil revisions confirming the conviction of the respondent under the
provisions of the Act as also the order qua the question of the payment of
fine.
Respondent herein has not approached this Court from the said order.
Only Appellant has. By an order dated 6.10.2005, a 3-Judge Bench of this
Court while granting leave directed:
"Notice shall issue to the respondent to show cause
why the sentence be not enhanced and the sentence
of fine be not substituted by order for
imprisonment as also an order for payment of
compensation under Section 357(3) of the Code of
Criminal Procedure read with Section 138 of the
Negotiable Instruments Act, returnable after four
weeks."
It is not in dispute that the Negotiable Instruments Act (for short "the
Act") was amended by the Negotiable Instruments (Amendment & Misc.
Provisions) Act, 2002 which came into force with effect from 6.02.2003 in
terms whereof the accused could also be imprisoned for a term which may
extend to one year or with fine which may extend to twice the amount of the
cheque or with both. The amended provision, however, is not applicable in
the instant case.
Mr. Kailash Vasudev, learned senior counsel appearing on behalf of
the appellant, would submit that the learned District Judge and the High
Court committed a serious error in passing the impugned judgment insofar
as they failed to take into consideration that the quantum of punishment
should be commensurate with the gravity of the offence and having regard to
the amendment in the Act which came into force on 6.02.2003, it is a fit case
where the respondent should have been awarded substantial punishment.
Mr. V. Prabhakar, learned counsel appearing on behalf of the
respondent, on the other hand, would submit that having regard to the fact
that this Court had issued notice on enhancement of sentence; in terms of
Section 377 of the Code of Criminal Procedure, the respondent would be
entitled to contend that no case had been made out for recording a judgment
of conviction by the courts below. According to the learned counsel, the
defence of the respondent having regard to entering into a compromise by
and between the parties hereto was wrongly not accepted by the courts
below, as the same should have been considered by the courts below in the
light of the averments made by the complainant in the complaint petition
wherefrom it would be evident that :
(i) the share of the profit in the partnership business was still to be
ascertained;
(ii) the cheque was issued in anticipation of the accounts to be audited
by a named auditor;
(iii) Only upon finalization of the accounts by the auditor, the debt or
liability of the respondent could have been clearly ascertained so as
to make him liable for payment of any amount pursuant thereto or
in furtherance thereof.
In the instant case, it was urged, as the appellant himself in his
complaint petition categorically stated that the actual amount of the liability
of the respondent was yet to be ascertained, the courts concerned must be
held to have committed a manifest error in recording a judgment of
conviction.
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It was further submitted that the appellate court and consequently, the
High Court also committed a manifest error inasmuch as they failed to take
into consideration that the burden of proof on the accused can be discharged
by showing only preponderance of probabilities; the standard of proof not
being the proof beyond all reasonable doubt. Our attention has further been
drawn to the fact that although the learned Trial Judge had directed payment
of compensation and fine of Rs. 7,05,000/-, the appellant had not filed any
appeal thereagainst and in that view of the matter, the revision petition filed
by it was not maintainable.
Section 138 of the Act is a special statute. It provides inter alia for
imposition of fine which may extend to twice the amount of the cheque.
We, as at present advised, need not go into the question as to whether
having regard to the provisions contained in Sub-section (2) of Section 29 of
the Code of Criminal Procedure, the jurisdiction of the Magistrate would be
to impose a fine for a sum of Rs. 5,000/- or not in view of the decisions of
this Court in Pankajbhai Nagjibhai Patel v. State of Gujarat [(2001) 2 SCC
595] and K. Bhaskaran v. Sankaran Vaidhyan Balan [(1999) 7 SCC 510].
The question arising in this case, in our opinion, should be considered
absolutely from a different angle.
Although the power of the court to impose a fine may or may not be
limited, it is not in dispute that the power to award compensation is not. The
purpose for which such compensation is to be granted to the complainant
whether in terms of clause (b) of Sub-section 1 of Section 357 of the Code of
Criminal Procedure or Sub-section (3) of Section 357 is not of much
significance for our purpose, although there cannot be any doubt whatsoever
that consideration for payment of compensation is somewhat different from
payment of fine. [See Rachhpal Singh v. State of Punjab (2002) 6 SCC 462]
In State of Punjab v. Gurmej Singh [(2002) 6 SCC 663] it was stated:
"9. The next contention raised by the learned
counsel for the appellant is that the surviving
victim, namely, the daughter of Jagjit Singh may
be awarded some compensation under Section
357(3) of the Code of Criminal Procedure. In
support of his submission he has also referred to a
decision of this Court in Rachhpal Singh v. State of
Punjab. In the said case this Court allowed
compensation under sub-section (3) of Section 357
CrPC to the victims but it would not be applicable
in the present case since a sentence of fine has also
been imposed. A reading of sub-section (3) of
Section 357 would show that the question of award
of compensation would arise where the court
imposes a sentence of which fine does not form a
part. The decision in Rachhpal Singh does not take
any contrary view nor hold that compensation may
be awarded over and above the sentence of fine. A
perusal of sub-section (3) of Section 357 CrPC
would make the position clear.
11. In the present case, sentence of fine has also
been imposed, as indicated in the earlier part of
this judgment. Out of the fine, a sum of Rs 1000
each had been ordered to be given to the three
injured persons, namely, Dalip Singh, Amarjit
Kaur and Gurmeet Kaur. The balance amount is to
go to the legal heirs of Jagjit Singh. We had heard
the learned counsel for both parties on this aspect.
Learned counsel for the appellant submitted that
Gurmeet Kaur lost both her parents as well as her
brother in the incident and now she is alone and
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would have become of marriageable age or may
have to start some work of her own. She would
need some money. In case she cannot be
compensated, the amount of fine may be enhanced
to some extent. Learned counsel for the respondent
has, however, submitted that out of seven acres of
land belonging to his father, the same has been
divided into three equal shares and some of it is
also under mortgage and he has got two daughters
and a son and his wife. He has also submitted that
whenever the respondent was released on parole he
met Gurmeet Kaur and his wife also keeps on
going to meet her. Their relations are normal and
cordial. If that is so, nothing better can be thought
of in the prevailing circumstances. However, we
are not considering for awarding any compensation
to Gurmeet Kaur under Section 357(3) CrPC but
the amount of fine imposed, can in any case be
reasonably enhanced."
Purpose of imposition of fine and/ or compensation, however, must be
considered having regard to the relevant factors in mind as envisaged under
Section 357 of the Code of Criminal Procedure.
We may notice that in Sube Singh v. State of Haryana [2006 (3) SCC
178], the law has been stated in the following terms :
"...The quantum of compensation will, however, depend
upon the facts and circumstances of each case. Award of
such compensation (by way of public law remedy) will
not come in the way of the aggrieved person claiming
additional compensation in a civil court, in the
enforcement of the private law remedy in tort, nor come
in the way of the criminal court ordering compensation
under Section 357 of the Code of Criminal Procedure."
The basic question, however, which arises for consideration before us
is as to whether we, in the peculiar facts and circumstances of this case, can
delve deep into the matter so as to find out the culpability of the respondent
herein and pass a judgment of acquittal in his favour. We do not think that
we should do so. Section 377 of the Code of Criminal Procedure has no
application in the instant case. Respondent has not preferred any appeal.
Even otherwise the complainant had categorically stated in his complaint
petition that although his claim was for a sum of Rs. 12 lakhs which amount
the respondent is said to have been withdrawn from the bank in
contravention of the terms and conditions of the deed of partnership, he
accepted his liability at least to the extent of Rs. 7,00,000/-. It appears from
a plain reading of the complaint petition that the respondent had admitted his
liability to the extent of Rs. 7,00,000/-. It was found as of fact to be so by
the courts below. The said findings do not warrant any interference. The
defence raised by the respondent to the effect that the parties had entered
into a compromise in the police station and he had to sign a cheque under
some threat or coercion had not been accepted by the courts below. There
cannot be any doubt whatsoever that had the respondent been able to show
that the cheque had been issued not in discharge of a debt but by way of a
security pending determination of his liability by an auditor, the matter
would have been different. In such an event, the court could have arrived at
a finding that the cheque having been issued on the basis of an anticipated
profit which by itself did not create any liability in presenti and the result of
the audit might have gone either way, no case under Section 138 of the Act
was made out. But, the same is not the case here.
The question which now arises for consideration is as to whether any
case for awarding a substantial sentence has been made out. We do not
think so. Grant of compensation, in our opinion, would subserve the
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purpose.
Appellant may also file a suit for damages and/ or for other reliefs.
We do not know what was found by the auditor upon scrutiny of the books
of account of the partnership firm.
The relationship between the parties is not disputed.
Respondent has not been charged with any fraudulent action. He had
a probable defence. Appellant furthermore had not preferred any appeal
against the judgment of the learned Trial Judge for enhancement of the
sentence. It may be that quantum of compensation has been altered to that
of the fine but in effect and substance the same did not matter.
In our opinion, therefore, interest of justice would be subserved, if the
respondent is hereby directed to pay a compensation of Rs.7,00,000/- in
stead and place of a fine of Rs.5,000/-, as has been directed by the High
Court. Thus, the appellant would be entitled to get the aforementioned sum
of Rs.7,00,000/- by way of compensation.
This appeal is disposed of accordingly. Respondent should pay the
amount of compensation within a period of eight weeks, if not already
deposited, failing which steps may be taken for recovery thereof in
accordance with law.