IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF NOVEMBER, 2019 BEFORE THE HON'BLE MR. JUSTICE B.A. PATIL CRIMINAL REVISION PETITION NO.361/2019 C/W Crl.RP No.363/2019 In Crl.RP No. 361/2019 Between:
Sri Narasimha Murthy S/o Krishnappa Aged abut 49 years, Residing at No.40 4th Cross, Sanjeevinagar Visvaneedam Post Bangalore – 560 078 (By Sri Raghavendra.K, Advocate) And:
Sri M.M.Fabs and Tools Rptd. By its Proprietor M.Murthy Aged about 60 years No.4/54, 50 feet road, 12th Cross, Chowdeshwari Nagar Laggere, Bangalore – 560 078 … Petitioner … Respondent (By Sri Vivek.S and Sri. H.Mahesh Kumar, Advocates) This Criminal Revision Petition is filed under Section 397 R/w 401 of Cr.P.C., praying to pleased to (a) set aside the order dated 22.02.2019 passed by the Hon’ble LX Additional City Civil and Sessions Judge Bengaluru (CCH-61), in Crl.A.No.1282/2017 so far as modifying the quantum of compensation is concerned and (b) Convict the respondent/accused in C.C.No.11269/2014, by confirming the judgment passed by the XIX Additional Chief Metropolitan Magistrate at Bangalore City, dated 23.06.2017, for the alleged offence U/s.138 of N.I Act.
In Crl.RP No. 363/2019 Between:
Sri Narasimha Murthy S/o Krishnappa Aged abut 49 years, Residing at No.40 4th Cross, Sanjeevinagar Visvaneedam Post Bangalore – 560 078 (By Sri Raghavendra.K, Advocate) … Petitioner And:
Sri M.M.Fabs and Tools Rptd. By its Proprietor M.Murthy Aged about 60 years No.4/54, 50 feet road, 12th Cross, Chowdeshwari Nagar Laggere, Bangalore – 560 078. … Respondent (By Sriyuths Vivek.S and Sri. H.Mahesh Kumar, Advocates) This Criminal Revision Petition is filed under Section 397 R/w 401 of Cr.P.C., praying to pleased to (a) set aside the order dated 22.02.2019 passed by the Hon’ble LX Additional City Civil and Sessions Judge Bengaluru (CCH-61), in Crl.A.No.1280/2017 so far as modifying the quantum of compensation is concerned and (b) Convict the respondent/accused in C.C.No.11268/2014, by confirming the judgment passed by the XIX Additional Chief Metropolitan Magistrate at Bangalore City, dated 23.06.2017 for the alleged offence U/s 138 of N.I Act.
These Criminal revision petitions coming on for Admission this day, the court made the following:-
O R D E R These petitions have been filed by the petitioner/complainant challenging the judgment passed by LX Additional City Civil and Sessions Judge, Bengaluru in Crl.A. No.1282/2017 and Crl.A.No.1280/2017 dated 22.02.2019.
2. I have heard the learned counsel appearing for the parties.
3. Though these cases are listed for admission, with the consent of learned counsel for the parties, same are taken up for final disposal.
4. The case of the complainant before the Court below is that complainant and accused were close friends. Accused sought financial assistance from the complainant and as such complainant advanced a sum of Rs.23,27,000/- (Rupees Twenty Three Lakh Twenty Seven Thousand Only) through cheques of different dates. Accused has agreed to pay a nominal interest. In order to repay the loan amount accused issued five cheques of different dates and he assured to pay an amount of Rs.14,000/- (Rupees Fourteen Thousand Only) by way of cash. When the said cheques have been submitted through the banker of the complainant, same have been returned, with an endorsement ‘insufficient funds’. The same has been intimated to the accused and he got issued a legal notice on 20.08.2013. Accused, in spite of service of legal notice, has not chosen to pay the amount and as such complainant filed two separate complaints.
5. In order to prove the case of the complainant, he got examined himself as PW1 and got marked Exs.P1 to P10. Thereafter, the statement of the accused was recorded and accused got examined himself as DW-1 and has not marked any documents. After hearing the learned counsel appearing for the parties, trial Court convicted the accused. Being aggrieved by the same appeal was preferred. It was partly allowed and accused was convicted and sentenced to pay a fine amount of Rs.9,23,000/- with default sentence. Challenging the same the petitioner/complainant is before this Court.
6. It is the submission of the learned counsel for the complainant that though the accused also preferred petitions before this Court in Crl.R.P.Nos.745/2019 and 747/2019, but subsequently the same have been withdrawn as not pressed. Thereby the accused has admitted the sentence of conviction passed by the trial Court. It is his further submission that the trial Court has convicted the accused and sentenced him to pay a fine amount double the cheque amount. But the Appellate Court has erroneously come to a wrong conclusion and has wrongly reduced the sentence. It is his further submission that the trial Court has rightly imposed the punishment but the Appellate Court modified the same without justifiable reasons. Accused used the amount of the complainant and if the said amount would have kept in any nationalized bank it could have earned some interest. In that light, the First Appellate Court ought to have imposed fine of double the cheque amount.
7. It is his further submission that Chapter 17 of Negotiable Instruments Act strongly lean towards grant of reimbursement of the loss by way of compensation, the Courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount of compensation. In some other cases Court can award interest at the rate of 9% per annum. In this behalf the trial Court has failed to exercise its discretionary power. In order to substantiate the said aspect, learned counsel relied upon the case of M/s IDEB Buildcon Pvt. Ltd, Bangalore and others vs. Mr. Narinder Malik reported in 2016(3) KCCR 2149.
8. It is further submitted that though the accused has undergone the default sentence for non payment of compensation, the amount of compensation would still to be recoverable as per the provisions of law. In support of this proposition of law, he relied upon the decision in the case Kumaran v. State of Kerala and Another reported in AIR 2017 SC 2433. On these grounds he prays to allow the petition and to modify the judgment of the First Appellate Court and impose sentence of paying double the cheque amount.
9. Per contra, the learned counsel appearing on behalf of the respondent/accused vehemently argued and submitted that the First Appellate Court, by exericising its discretionary power, has come to the conclusion that no substantial reasons have been assigned by the trial Court to impose the sentence of double the cheque amount, the Appellate Court has rightly reduced the sentence to the cheque amount. It is his further submission that the accused already undergone sentence in the prison. Under Section 138 of Negotiable Instruments Act, 1881 the word used i.e., ‘may’, that itself indicates that the Court is having full discretion either to grant double the cheque amount or it may not. On these grounds he prayed to dismiss the petitions.
10. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for the parties and perused the records.
11. In so far as the conviction of the accused is concerned there is no dispute. The trial Court convicted him and he preferred appeals and the same was also allowed in part, modifying the conviction. Being aggrieved by the said order, accused preferred the criminal revision petitions before this Court and subsequently the same have been got withdrawn and thereby it indicates that he has accepted the conviction and order of the sentence. But it is the specific contention of the learned counsel for the petitioners that as per law, the sentence imposed is not proportionate. The first appellate Court ought to have confirmed the judgment of conviction of the trial Court and imposed the fine of double the cheque amount. For the purpose of brevity, I quote Section 138 of the Negotiable Instruments Act.
“138. Dishonour of cheque for insufficiency etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this Section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder I due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.”
12. On a close reading of Section 138 of Negotiable Instruments Act, it indicates that the Court can punish with imprisonment for a term which may extend for a period of two years or with a fine which may extend twice the amount of the cheque or with both. The word used “may” itself indicates that discretionary power to be exercised, to meet the ends of justice. The main object of the Negotiable Instruments Act is when once a loan has been given and if it is not been returned, then under such circumstances, the complainant will be put to loss; and a reasonable compensation has to be granted in this behalf for having used the fund of the complainant. But however, while exercising the discretion, the Court has to keep in mind various factors including the act of the accused.
13. I have gone through the materials and records including the trial Court records. No such special circumstances have been made out by the accused so as to exercise the discretion and reduce the sentence. It is true that the said amount if it had been invested in any nationalized bank, then under such circumstances, it would have earned some interest.
14. In that light, the reasonable quantum to compensate the loss, can be asked to be paid to the complainant. This proposition of law has been laid down by the co-ordinate Bench of this Court in M/s IDEB Buildcon Private Limited case (quoted supra) wherein at paragraph 12 which reads thus:
“12. It is useful to refer to paragraphs 14 and 15 of the judgment in the case of Mainuddin Abdul Sattar Shaikh in which earlier decision rendered in the case of R.Vijayan Vs. Baby and Another ([2012] 1 SCC 260) is relied upon by the Hon’ble Apex Court. It is held as follows in paragraph Nos. 14 and 15:
“14. The law laid down by this Court in R.Vijayan Vs. Baby was to the following effect “18. … As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the Courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view of the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount of compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would me an not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformly and consistency in deciding similar cases by different Courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of Courts of Justice.”
15. We, therefore, award compensation to the extent of twice the cheque amount and simple interest thereon at 9% p.a to the complainant. Accordingly, the respondent Vijay.D.Salvi is sentenced to undergo simple imprisonment for a period of five months for the offence under Section 138 of the NI Act. Considering the fact that the cheque amount is Rs.74,200, we direct the respondent Vijay.D.Salvi to pay a compensation of Rs.1,48,400/- (Rupees One Lakh forty-eight thousand four hundred only) with simple interest thereon at 9% p.a., to the appellant complainant. In default of payment of the said compensation, the respondent will have to undergo simple imprisonment for a period of six months.”
15. Keeping in view the above said proposition, awarding of compensation to the extent of twice the cheque amount is the discretionary power vested with the Court. However, no special circumstances have been stated to award double the cheque amount. In that view of the matter if interest at the rate of 6% per annum is calculated, under such circumstances it would meet the ends of justice.
16. This Court will also not forget the time taken in prosecuting the case in the trial Court, first appellate Court and before this Court. If no interest is awarded on the compensation awarded, then under such circumstances, it would cause prejudice to the complainant. In that light, I am of the considered opinion that in Crl.RP No.361/2019 and Crl.RP No.363/2019 together if an amount of Rs.11,19,840/-
is ordered to be paid as the compensation by the accused, then under such circumstances, the same would meet the ends of justice.
17. In that light the petitions are allowed and the judgment of the first appellate Court in both the cases is modified and accused is sentenced to pay a fine amount as ordered by the first appellate Court both cases together to the tune of the Rs.23,33,000/- by default sentence as ordered by the first appellate Court and further he is directed to pay an amount of Rs.11,19,840/- as compensation. If the said amount is not paid within two months from the date of this order it will carry interest at the rate of 9% per annum for the delayed period. In default, he has to undergo imprisonment for a period of one year.
BVK/HB SD/- JUDGE