2002 JTR(SC) 43
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2002(1) Supreme 227
SUPREME COURT OF INDIA
(From Chennai High Court)
K.T. Thomas & S.N. Phukan, JJ.
Suganthi Suresh Kumar -Appellant
versus
Jagdeeshan -Respondent
Criminal Appeal Nos. 65-66 of 2002
(Arising out of SLP (Crl.) Nos. 2699-2700 of 2001)
Decided on 15-1-2002
Counsel for the Parties :
For the Appellant : K.V. Viswanathan, Kunwar Ajit Mohan Singh and K.V. Venkataraman, Advocates.
For the Respondent : T. Raja, Advocate.
VERY IMPORTANT POINT
For conviction under Section 138 Negotiable Instruments Act, 1881 sentence should be appropriate when the amount covered by the cheque remains unpaid and court should make liberal use of Section 357(3) of Cr.P.C. for awarding appropriate compensation and for imposing sentence in default.
Act
Referred
:CIVIL PROCEDURE CODE : S.9(c), O.21 R.43, O.21 R.54
CONSTITUTION OF INDIA : Art.141
CRIMINAL PROCEDURE CODE : S.357(3), S.431
NEGOTIABLE INSTRUMENTS ACT : S.138
(A) The case involves an offence under Section 138 of the Negotiable Instruments Act concerning dishonoured cheques, where two complaints arose from two sets of dishonoured cheques with a total value of Rs. 4,50,000. The trial court convicted the accused but imposed only a fine of Rs. 5000/- and imprisonment until the rising of the court, which the complainant/appellant challenged as grossly inadequate. The High Court dismissed the revisions without invoking Section 357(3) of the Code of Criminal Procedure, and the High Court also did not apply the guidelines from Pankaj Bhai Nagjibhai Patel v. State of Gujarat. This appeal to the Supreme Court questions the adequacy of the sentence and seeks to enforce the provisions of Section 357(3) read with Section 431 of the Code of Criminal Procedure, which allow a court to award compensation from the fine realized or attach it as a decree, and to impose a sentence in default for non-payment. The case further invokes principles from Hari Singh v. Sukhbir Singh regarding liberal use of compensation orders and the binding nature of Supreme Court precedents under Article 141.
(B) The core legal principles are: (i) Compensation for cheque dishonour offences can be awarded under Section 357(3) Cr.P.C. even if the cheque value exceeds the jurisdictional limit of a Magistrate, with no upper limit fixed; (ii) Courts must make liberal use of Section 357(3) to compensate complainants; (iii) The quantum of compensation depends on the nature of the crime, justice to the victim, and the ability to pay; (iv) A sentence in default may be imposed under Section 357(3) Cr.P.C. for non-payment of compensation, and such an order is enforceable; (v) Orders for compensation under the Code are recoverable as if they were fines under Section 431 Cr.P.C.; (vi) A High Court cannot overrule a decision of this Court merely on the ground that it did not consider a particular point; and (vii) Subordinate courts are bound to follow this Courts decisions until expressly overruled by a larger bench.
Facts of the case:
Two complaints were filed against the respondent for dishonouring two sets of cheques aggregating Rs. 4,50,000. The trial magistrate convicted the respondent under Section 138 of the Negotiable Instruments Act but sentenced him only to imprisonment until the rising of the court and a fine of Rs. 5000/- in each case. The complainant preferred revisions before the High Court on the ground that the sentence was inadequate and that Section 357(3) Cr.P.C. should have been invoked, but the High Court dismissed the revisions without interfering with the sentence. The complainant then approached this Court seeking appropriate directions.
Findings of Court:
The High Court was wrong in not invoking Section 357(3) Cr.P.C. and in dismissing the revisions. The sentence imposed by the trial magistrate was manifestly inadequate given that the cheque amounts remained unpaid, which undermines the deterrent object of Section 138 of the Negotiable Instruments Act. The High Court must ensure that the sentence reflects the gravity of the offence and gives proper effect to the legislative object. The decision of the Sessions Judge to impose a sentence in default was correct and in accordance with this Courts precedents.
Issues:
(i) Whether the High Court was justified in not invoking Section 357(3) Cr.P.C. when the complainant sought compensation and a stricter sentence? (ii) Whether the sentence imposed was proportionate to the offence and the amount involved? (iii) Whether a court may enforce compensation by imposing a sentence in default under Section 357(3) read with Section 431 Cr.P.C.? (iv) Whether a High Court can overrule this Courts decision in Hari Singh v. Sukhbir Singh on the ground that it did not consider Section 431 Cr.P.C.?
Ratio Decidendi:
The court reaffirmed that compensation under Section 357(3) Cr.P.C. is payable out of the fine realised and may be awarded without any upper limit, and that a sentence in default for non-payment is a valid and enforceable mode of recovery. The trial magistrate must impose a sentence that adequately reflects the seriousness of the offence and ensures that the deterrent purpose of the Negotiable Instruments Act is not defeated by nominal or inadequate punishment when the dishonoured cheque amounts remain unpaid.
Result:
The appeals are allowed. The sentence imposed on the respondent is set aside, and the case is remitted to the trial Magistrate for re-sentence after hearing both sides, with a direction to pass a condign sentence that properly addresses the gravity of the offence and the unpaid cheque amounts.
(A) The case involves an offence under Section 138 of the Negotiable Instruments Act concerning dishonoured cheques, where two complaints arose from two sets of dishonoured cheques with a total value of Rs. 4,50,000. The trial court convicted the accused but imposed only a fine of Rs. 5000/- and imprisonment until the rising of the court, which the complainant/appellant challenged as grossly inadequate. The High Court dismissed the revisions without invoking Section 357(3) of the Code of Criminal Procedure, and the High Court also did not apply the guidelines from Pankaj Bhai Nagjibhai Patel v. State of Gujarat. This appeal to the Supreme Court questions the adequacy of the sentence and seeks to enforce the provisions of Section 357(3) read with Section 431 of the Code of Criminal Procedure, which allow a court to award compensation from the fine realized or attach it as a decree, and to impose a sentence in default for non-payment. The case further invokes principles from Hari Singh v. Sukhbir Singh regarding liberal use of compensation orders and the binding nature of Supreme Court precedents under Article 141.
(B) The core legal principles are: (i) Compensation for cheque dishonour offences can be awarded under Section 357(3) Cr.P.C. even if the cheque value exceeds the jurisdictional limit of a Magistrate, with no upper limit fixed; (ii) Courts must make liberal use of Section 357(3) to compensate complainants; (iii) The quantum of compensation depends on the nature of the crime, justice to the victim, and the ability to pay; (iv) A sentence in default may be imposed under Section 357(3) Cr.P.C. for non-payment of compensation, and such an order is enforceable; (v) Orders for compensation under the Code are recoverable as if they were fines under Section 431 Cr.P.C.; (vi) A High Court cannot overrule a decision of this Court merely on the ground that it did not consider a particular point; and (vii) Subordinate courts are bound to follow this Courts decisions until expressly overruled by a larger bench.
Facts of the case:
Two complaints were filed against the respondent for dishonouring two sets of cheques aggregating Rs. 4,50,000. The trial magistrate convicted the respondent under Section 138 of the Negotiable Instruments Act but sentenced him only to imprisonment until the rising of the court and a fine of Rs. 5000/- in each case. The complainant preferred revisions before the High Court on the ground that the sentence was inadequate and that Section 357(3) Cr.P.C. should have been invoked, but the High Court dismissed the revisions without interfering with the sentence. The complainant then approached this Court seeking appropriate directions.
Findings of Court:
The High Court was wrong in not invoking Section 357(3) Cr.P.C. and in dismissing the revisions. The sentence imposed by the trial magistrate was manifestly inadequate given that the cheque amounts remained unpaid, which undermines the deterrent object of Section 138 of the Negotiable Instruments Act. The High Court must ensure that the sentence reflects the gravity of the offence and gives proper effect to the legislative object. The decision of the Sessions Judge to impose a sentence in default was correct and in accordance with this Courts precedents.
Issues:
(i) Whether the High Court was justified in not invoking Section 357(3) Cr.P.C. when the complainant sought compensation and a stricter sentence? (ii) Whether the sentence imposed was proportionate to the offence and the amount involved? (iii) Whether a court may enforce compensation by imposing a sentence in default under Section 357(3) read with Section 431 Cr.P.C.? (iv) Whether a High Court can overrule this Courts decision in Hari Singh v. Sukhbir Singh on the ground that it did not consider Section 431 Cr.P.C.?
Ratio Decidendi:
The court reaffirmed that compensation under Section 357(3) Cr.P.C. is payable out of the fine realised and may be awarded without any upper limit, and that a sentence in default for non-payment is a valid and enforceable mode of recovery. The trial magistrate must impose a sentence that adequately reflects the seriousness of the offence and ensures that the deterrent purpose of the Negotiable Instruments Act is not defeated by nominal or inadequate punishment when the dishonoured cheque amounts remain unpaid.
Result:
The appeals are allowed. The sentence imposed on the respondent is set aside, and the case is remitted to the trial Magistrate for re-sentence after hearing both sides, with a direction to pass a condign sentence that properly addresses the gravity of the offence and the unpaid cheque amounts.
JUDGMENT
Thomas, J.-Leave granted.
2. Appellant in this case is the complainant before the court of 9th Metropolitan Magistrate, Saidapet, Chennai. The offence pitted against the respondent was under Section 138 of the Negotiable Instruments Act. In fact there was two complaints arising out of two sets of cheques which were dishonoured by the drawee bank. The trial Magistrate after holding the respondent guilty of the offence convicted him of the aforesaid offence but sentenced him only to undergo imprisonment till rising of the court and pay a fine of Rs. 5000/- in both cases. Apparently the respondent was happy and therefore he did not prefer any appeal. But the complainant/appellant was unhappy and therefore he preferred two revisions before the High Court on the premise that the sentence was grossly inadequate. He contended before the High Court that the trial magistrate should atleast have invoked the provision under Section 357(3) of the Code of Criminal Procedure (for short the Code).
3. However the learned single judge of the High Court of Madras was not inclined to interfere with the sentence passed on the respondent and therefore he dismissed both the revisions. Nonetheless learned single judge has chosen this opportunity to send a message to the trial magistrates "to keep in mind the object of providing stringent punishment and the guidelines given by the Apex Court in Pankaj Bhai Nagjibhai Patel v. State of Gujarat & Anr. 2001(2) SCC 595". Nor did the High Court invoked Section 357(3) of the Code.
4. Mr. K.V. Viswanathan, learned counsel for the petitioner invited our attention to the following observations made by this Court in K. Bhaskaran v. Sankaran Vaidhyan Balan 1999(7) SCC 510:-
"If a Judicial Magistrate of the First Class were to order compensation to be paid to the complainant from out of the fine realised the complainant will be the loser when the cheque amount exceeded the said limit. In such a case a complainant would get only the maximum amount of rupees five thousand. But the Magistrate in such cases can alleviate the grievance of the complainant by making resort to Section 357(3) Cr.P.C. The Supreme Court had emphasised the need for making liberal use of that provision. No limit is mentioned in the sub-section and therefore, a Magistrate can award any sum as compensation. Of course while fixing the quantum of such compensation the Magistrate has to consider what would be the reasonable amount of compensation payable to the complainant. Thus, even if the trial was before a Court of a Magistrate of the first Class in respect of a cheque which covers an amount of Rs. 5,000/- the Court has power to award compensation to be paid to the complainant."
5. In the said decision this Court reminded all concerned that it is well to remember the emphasis laid on the need for making liberal use of Section 357(3) of the Code. This was observed by reference to a decision of this Court in 1988(4) SCC 551 Hari Singh v. Sukhbir Singh. In the said decision this Court held as follows :-
"The quantum of compensation may be determined by taking into account the nature of crime, the justness of the claim by the victim and the ability of accused to pay. If there are more than one accused they may be asked to pay in equal terms unless their capacity to pay varies considerably. The payment may also vary depending upon the acts of each accused. Reasonable period for payment of compensation, if necessary by instalments, may also be given. The court may enforce the order by imposing sentence in default." (emphasis supplied)
6. Our attention has been brought to a decision rendered by a single judge of the High Court of Kerala vide Rajendra v. Jose 2001(3) Kerala Law Times 431. Learned Judge has directed that the decision of this Court in Hari Singh v. Sukhbir Singh is not to be followed as this Court laid down the said legal proposition without adverting to Section 431 of the Code. The Single Judge of the High Court of Kerala by-passed the legal proposition made by the apex court in the following manner :-
"The learned Sessions Judge imposed sentence in default on the basis of the observation made by the apex court in Hari Kishan and State of Haryana v. Sukhbir Singh, AIR 1988 SC 2127, that court may enforce the order by imposing sentence in default. It appears that while disposing of that appeal attention of apex court was not drawn specifically to the provisions of Section 431 Cr.P.C. providing for recovery of money (other than fine) payable by virtue of any order made under the Criminal Procedure Code."
7. Saying so, learned single judge set aside "that part of the order passed by the sessions court directing an accused to undergo simple imprisonment for a period of six months in case of his committing default in payment of the compensation awarded."
8. Thereafter learned single judge cited another decision of this Court in Balraj v. State of UP, AIR 1995 SC 1935. It related to a murder case. Apart from the sentence of imprisonment this Court awarded compensation and directed the amount to be collected under Section 431 of the Code. But there is not even a remote hint in the said decision doubting the correctness of the legal proposition adopted in Hari Singh v. Sukhbir Singh. In other words the said legal position remains in force as no other bench of this Court has even chosen to depart from it.
9. It is impermissible for the High Court to overrule the decision of the apex court on the ground that Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, it is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India, AIR 1988 SC 1353 that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.
10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by virtue of an order made under the Code shall be recoverable "as if it were a fine". Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisonment, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for levy of the amount.
11. When this Court pronounced in Hari Singh v. Sukhbir Singh (supra) that a court may enforce an order to pay compensation "by imposing a sentence in default" it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger bench of this Court. Hence learned single Judge of the High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said Judge
Rajendran v. Jose 2001(3) Kerala Law Times 431. It is unfortunate that when the Sessions Judge has correctly done a course in accordance with the discipline the Single judge of the High Court has incorrectly reversed it.
12. The total amount covered by the cheques involved in the present two cases was Rs. 4,50,000/-. There is no case for the respondent that the said amount had been paid either during the pendency of the cases before the trial court or revision before the High Court or this Court. If the amounts had been paid to the complainant there perhaps would have been justification for imposing a flee-bite sentence as had been chosen by the trial court. But in a case where the amount covered by the cheque remained unpaid it should be the look out of the trial magistrates that the sentence for the offence under Section 138 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be allowed to take dishonour of the cheque issued by him light heartedly. The very object of enactment of provisions like 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount atleast during the pendency of the case.
13. Learned counsel for the respondent contended that the complainant has subsequently filed a civil suit and attached all the properties of the respondent. That is not a ground for lessening the gravity of the offence or to impose a minor sentence chosen by the trial court.
14. As we propose to remit the case back to the trial Court, we do not wish to indicate what exactly should be the limit of proper sentence to be passed. The trial Magistrate shall hear both sides once again in the matter of sentence and pass a sentence which is condign. We, therefore, set aside the sentence passed on the respondent and remit the case back to the trial Magistrate for passing appropriate sentence on the respondent after hearing both sides.
15. Learned counsel for the respondent made a plea that if the respondent is able to make payment of the amount covered by the cheques he shall not be debarred from taking up the plea for mitigation of the sentence. The respondent will be entitled to make such a plea in the event of his succeeding in paying the amount covered by the cheques.
16. Appeals are disposed of in the above terms.
(N.K.R.) Order accordingly.
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