In one landmark ruling, the Jammu and Kashmir High Court issued guideline on certain factors to be considered for Magistrates while passing conviction orders under Section 138 of the Negotiable Instruments Act.
The Court noted that the sentence of fine, whenever imposed by the Criminal Court, upon conviction of accused under Section 138 of N.I. Act, must be sufficient enough to adequately compensate the complainant as the the Legislature has given discretion to the Magistrate to impose a sentence of fine which may extend to double the amount of cheque.
Brief Facts of the Case
The petitioner herein is partly aggrieved of the order passed by Special Mobile Magistrate who convicted the respondent-accused against whom the petitioner initiated case under Section 138 of Negotiable Instruments Act, 1981 and sentenced him to six months imprisonment.
The discontent of the petitioner, however arises from the amount of fine imposed on the respondent-accused. The contention submitted to the Court is that the said fine isn't in proportion to the loss suffered. It is being pleaded that the respondent-accused should have also been awarded fine sufficient enough to meet the liability of the cheque issued by him which later on was dishonoured.
The only arguement is that the compensation of ₹2 lac, to be paid to the petitioner in terms of the impugned order, is only one fifth (1/5th) of the value of the cheque and once the respondent appeared before the trial Court and admitted the liability, the trial Court should have exercised its discretion to impose minimum fine of ₹30 lac and ordered payment of same to the petitioner by way of compensation.
High Court Observation
Dealing with the principle question raised in the petition that what should be the approach of the trial Court while awarding punishment to an accused convicted for commission of offence under Section 138 of N.I. Act; whether the trial Court should, with or without the punishment of imprisonment, impose fine which is sufficient enough to meet the liability of the accused towards the complainant as represented by the bounced cheque, the Court noted on the outset that Trial Court is given the discretion to impose the sentence of imprisonment or fine or both.
It observed:
The Court cited SC Judgement in The Assistant Commissioner, Assessment-Ii, Bangalore & Ors Vs. M/S. Velliappa Textiles Ltd. & ANR [2003] INSC 454 (16 September 2003), 2003 Latest Caselaw 449 SC, in which it was ruled that where the legislature has granted discretion to the court in the matter of sentencing, it is open to the court to use its discretion. Where, however, the legislature, for reasons of policy, has done away with this discretion, it is not open to the court to impose only a part of the sentence prescribed by the legislature, for that would amount re-writing the provisions of the statute.
Further citing, SC Judgement in Damodar S.Prabhu Vs. Sayed Babalal H. [2010] INSC 333 (3 May 2010), 2010 Latest Caselaw 332 SC, the Court stressed that while exercising discretion under Sec- 138, the Trial Court must be alive to the object of the enactment of the NI Act which is to control and discourage the menace of cheque bouncing in the course of commercial transactions and to encourage the culture of use of cheques and enhancing the credibility of the instrument.
The Court showed complete agreement to SC view as cemented in case of Somnath Sarkar Vs. Utpal Basu Mallick & ANR [October 7, 2013], 2013 Latest Caselaw 717 SC that unlike other forms of crime, the punishment for commission of offence under Section 138 of N. I. Act is not a means of seeking retribution, but is more a means to ensure payment of money and, therefore, respect of offence of dishonor of cheques, it is the compensatory aspect of the remedy which should be given priority over the punitive aspect.
Ruling that the object of Section 138 of N.I. Act is not only punitive, but is compensatory as well, the Court cited SC Judgement in Suganthi Suresh Kumar vs Jagdeeshan 2002 2 SCC 420.
It further mentioned R.Vijayan Vs. Baby & ANR., 2011 Latest Caselaw 749 SC wherein the SC elaborated the intention of the Legislature for enacting Section 138.
"The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under section 357(1)(b) of the Code."
The Court stated that in Bir Singh Vs. Mukesh Kumar, the SC had pulled up the Magistrates for following the traditional view, that the criminal proceedings were for imposing punishment and not exercising discretion to direct payment of compensation, which causes considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case gets decided.
In backdrop of the above, the Court specified the following guiding factors for the Magistrates who are dealing with Section 138 NI Act cases:
The Court accordingly set aside the impugned order and remitted back the case to Trial Court for considering the imposition of sentence upon the respondent de novo in the light of legal position.
It also directed the Registrar General to circulate this judgment to all the Judicial Magistrates so that uniformity and consistency in the matter of imposing sentence of fine having regard to the compensatory aspect of remedy under Section 138 of N.I. Act is ensured.
Read Judgement Here:
source ; www.latestlaws.com/
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