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2023 DIGILAW 1037 (MAD)

M. S. P. Paper Mills (P) Ltd. v. Devendran Coal International Pvt. Ltd.

2023-03-14

N.ANAND VENKATESH

body2023
ORDER : Prayer in Crl.R.C.No.1322 of 2017 : Criminal Revision filed under Sections 397 r/w 401 of the Code of Criminal Procedure praying against the judgment passed by the Metropolitan Magistrate FTC II, Egmore, Chennai in C.C.No.1318 of 2013, dated 31.03.2015 against C.A.No.78 of 2015 by the VIth Additional City Civil Court, Chennai. Prayer in Crl.R.C.No.1323 of 2017 : Criminal Revision filed under Sections 397 r/w 401 of the Code of Criminal Procedure praying against the judgment dated 26.07.2017 in Crl.R.C.No.12 of 2016 on the file of the VIth Additional City Civil Page No.1 of 16 Court, Chennai, High Court Campus preferred this Memorandum of Criminal Revision thereby conforming the judgment dated 31.03.2015 passed in C.C.No.1318 of 2013 by the learned Metropolitan Magistrate Fast Track Court No.II, Egmore, Chennai. These Criminal Revision cases have been filed against the common judgment and order passed by the VI Additional Sessions Judge in Crl.A.No.78 of 2015 and Crl.Rc.No.12 of 2016, dated 27.06.2017, wherein, the criminal appeal filed by the petitioners was dismissed confirming the judgment and order passed by the learned Metropolitan Magistrate (FTC) No.II, Egmore in C.C.No.1318 of 2013 and Crl.R.C.No.12 of 2016 was allowed and the sentence imposed against the 2nd petitioner was enhanced and the petitioner was directed to undergo imprisonment for a period of two years and to pay compensation of a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) to the respondent/complainant. 2. The respondent/complainant had a business transaction with the petitioners and based on purchase orders placed by the 1st petitioner, Coal was supplied by the respondent. Out of the total value of coal supplied, there was an outstanding balance amount and towards the said liability, the 1st petitioner issued three cheques each amounting to a sum of Rs.5,00,000/- (Rupees Five Lakhs ony) and in total for a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only). 3. When the cheques were presented for collection by the respondent, the same was returned with an endorsement “Insufficient Funds”. A legal notice was issued by the respondent on 29.12.2012 calling upon the petitioners to pay the cheque amount, within a period of fifteen days. In spite of receipt of the legal notice, the petitioners neither paid the cheque amount nor gave any reply. Under such circumstances, the complaint came to be filed by the respondent against the petitioners for offence under Section 138 of the Negotiable Instruments Act. In spite of receipt of the legal notice, the petitioners neither paid the cheque amount nor gave any reply. Under such circumstances, the complaint came to be filed by the respondent against the petitioners for offence under Section 138 of the Negotiable Instruments Act. The first petitioner is the Company and the second petitioner is the Managing Director of the Company. 4.The representative of the respondent Company examined himself as PW1 and Ex.P1 to Ex.P16 were marked. No one was examined on the side of the petitioners and two documents were marked as Ex.D1 and Ex.D2. 5.The Trial Court on considering the facts and circumstances of the case and on appreciation of evidence, came to a conclusion that the legal presumption under Section 139 of the Negotiable Instruments Act must lean in favour of the respondent and that the petitioners have failed to rebut the legal presumption and accordingly, convicted the petitioners for offence under Section 138 of the Negotiable Instruments Act. Insofar the sentence is concerned, no sentence was imposed as against the first petitioner. Insofar as the second petitioner is concerned, he was directed to pay the sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) as compensation under Section 357(3) of Cr.P.C., and in default to undergo one year simple imprisonment. 6.Aggrieved by the judgment and order passed by the Trial Court, the petitioners filed Crl.A.No.78 of 2015. The respondent was also aggrieved by the sentence imposed by the Trial Court and sought for the enhancement of sentence by filing Crl.R.C.No.12 of 2016. Both the appeal and revision were taken up together and a common judgment was passed by the VI Additional Sessions Judge on 27.06.2017. The Criminal Appeal filed by the petitioners was dismissed. The Criminal Revision filed by the respondent was allowed and the sentence was enhanced and the second petitioner was sentenced to undergo imprisonment for a period of two years and to pay a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) as compensation to the respondent/complainant. Aggrieved by the same, these criminal revision cases have been filed before this Court by the petitioners. 7. Heard Mr.Sarath Chandran, learned counsel appearing on behalf of the petitioners and Ms.H.Kavitha, learned Legal Aid Counsel appearing on behalf of the respondent. 8. Aggrieved by the same, these criminal revision cases have been filed before this Court by the petitioners. 7. Heard Mr.Sarath Chandran, learned counsel appearing on behalf of the petitioners and Ms.H.Kavitha, learned Legal Aid Counsel appearing on behalf of the respondent. 8. The main ground that was urged by the learned counsel for the petitioners is that the Trial Court literally did not impose any sentence against the petitioners and hence, the Appellate Court was not right in enhancing the sentence when there was no sentence. Yet another submission that was made by the learned counsel for the petitioners is that the enhancement of sentence was made even without questioning the second petitioner on the sentence and hence, the very procedure followed by the Appellate Court is illegal and unsustainable. The learned counsel for the petitioners therefore submitted that the judgment and order passed by the Appellate Court is liable to be interfered by this Court and the matter has to be remanded back to the file of the Trial Court and the Trial Court must be directed to continue from the stage of questioning the petitioners on the sentence. 9. Per contra, the learned Legal Aid Counsel appearing on behalf of the respondent submitted that the petitioners do not have any case on merits and some technical plea is being taken before this Court to escape from the liability. The learned counsel submitted that both the Courts below have dealt with the merits of the case and found that the legal presumption under Section 139 of the Negotiable Instruments Act must be applied in favour of the respondent and that the petitioners did not rebut the presumption. In view of the same, the petitioners cannot escape from the conviction by taking a technical plea on the sentence imposed by the Courts below. Accordingly, the learned counsel for the respondent sought for the dismissal of these criminal revision cases. 10.This Court has carefully considered the submissions made on either side and also the materials available on record. 11.Mr.Sarath Chandran, learned counsel for the petitioners mainly focussed his arguments on the sentence that was imposed by the Trial Court and the enhancement of sentence imposed by the Appellate Court based on the revision that was filed by the respondent. 10.This Court has carefully considered the submissions made on either side and also the materials available on record. 11.Mr.Sarath Chandran, learned counsel for the petitioners mainly focussed his arguments on the sentence that was imposed by the Trial Court and the enhancement of sentence imposed by the Appellate Court based on the revision that was filed by the respondent. The learned counsel submitted that the Trial Court straight away invoked Section 357 (3) of Cr.P.C., and directed the second petitioner to pay the compensation even in the absence of any other sentence. In view of the same, the learned counsel submitted that the so-called sentence that was imposed by the trial Court is unsustainable in law. To substantiate his submission, the learned counsel relied upon the judgment of the Apex Court in R.Vijayan vs. Baby and Another reported in 2012 1 SCC 260 and the relevant portion in the judgment is extracted hereunder: 9. It is evident from sub-section (3) of Section 357 of the Code, that where the sentence imposed does not include a fine, that is, where the sentence relates to only imprisonment, the Court, when passing judgment, can direct the accused to pay, by way of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced. The reason for this is obvious. Sub-section (1) of Section 357 provides that where the Court imposes a sentence of fine or a sentence of which fine forms a part, the court may direct the fine amount to be applied in the payment to any person of compensation for any loss or injury caused by the offence, when the compensation is, in the opinion of the court, recoverable by such person in a civil court. Thus, if compensation could be paid from out of the fine, there is no need to award separate compensation. Only where the sentence does not include fine but only imprisonment and the court finds that the person who has suffered any loss or injury by reason of the act of the accused person, requires to be compensated, it is permitted to award compensation under Section 357 (3). 12. Only where the sentence does not include fine but only imprisonment and the court finds that the person who has suffered any loss or injury by reason of the act of the accused person, requires to be compensated, it is permitted to award compensation under Section 357 (3). 12. To appreciate the submission made by the learned counsel for the petitioners, this Court has to take note of the sentence that was imposed by the Trial Court and for proper appreciation, the relevant portion in the judgment of the Trial Court is extracted hereunder: OTHER LANGUAGE 13. The Trial Court has come to a conclusion that no sentence can be imposed as against the 1st petitioner, since it is a Company. This first finding rendered by the Trial Court is unsustainable, since the sentence of fine can always be imposed even as against a corporate entity and the law on this issue is too well settled. The next finding of the Trial Court on the sentence is that only the second petitioner is liable to be sentenced and accordingly, the second petitioner was directed to pay compensation of a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) (equivalent to the cheque amount) under Section 357 (3) of Cr.P.C. 14. Section 357 (3) of Cr.P.C., reads as follows: When a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment order the accused person to pay, by way of compensation such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced. 15. While interpreting the above provision, the Apex Court in R.Vijayan case referred supra has categorically held that the compensation can be directed to be paid under Section 357(3) of Cr.P.C., only if there is a sentence of imprisonment imposed against the accused person. In the present case, no sentence of imprisonment was imposed as against the second petitioner and the Trial Court merely imposed the sentence for payment of compensation of a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only). Such a sentence imposed by the Trial Court goes against the mandate as found under Section 357 (3) of Cr.P.C. Unfortunately, the Trial Court did not take note of this fact. 16. Such a sentence imposed by the Trial Court goes against the mandate as found under Section 357 (3) of Cr.P.C. Unfortunately, the Trial Court did not take note of this fact. 16. Under Section 138 of the Negotiable Instruments Act, it is left open to the Trial Court to impose the sentence of imprisonment or fine or with both. Insofar as imprisonment is concerned, the maximum period of imprisonment that can be imposed is for two years. Likewise, the maximum fine that can be imposed is twice the cheque amount. If the Trial Court had imposed the sentence of imprisonment, then the payment of compensation under Section 357 (3) of Cr.P.C., can be sustained. In the absence of the same, it must be held that no sentence was imposed by the Trial Court, since mere direction to pay compensation under Section 357 (3) of Cr.P.C., is unsustainable without the sentence of imprisonment forming part of the main sentence. 17. If the Trial Court had not imposed the sentence of imprisonment as against the second petitioner and had only imposed the sentence of payment of fine, then there can always be a direction under Section 357 (1) of Cr.P.C., to pay the amount of fine as compensation to the respondent. It is only for this reason, the Apex Court in Dilip S. Dahanukar vs. Kotak Mahindra Co. Ltd., and Another reported in 2007 6 SCC 528 held as follows: 50. This Court is an appropriate case may have to consider as to whether in economic offence like those under the Negotiable Instruments Act the Courts should be at all invoke sub-section (3) of Section 357 of the Code, when the purpose can be achieved by taking recourse to substantive provision of Section 138 of the Act read with Section 357(1) thereof. We, however, do not inclined to lay down any law in the behalf, as at present advised, as we are not concerned herein with such a situation. 18. It is clear from the above that where the Court convicts a person under Section 138 of the Negotiable Instruments Act and sentences the accused persons with imprisonment and fine or with a sentence of only fine, recourse can be had under Section 357 (1) of Cr.P.C., and the amount that is paid as a fine can be directed to be paid as compensation to the complainant. This was an easy way out for the Trial Court if the Trial Court did not want to sentence the second petitioner with imprisonment. The Trial Court could have directed the second petitioner to pay fine of a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) and directed it to be paid as compensation to the respondent under Section 357 (1) of Cr.P.C. This would have solved the entire problem without any confusion. 19. The Appellate Court while dealing with the criminal revision case filed by the respondent seeking for enhancement of sentence completely lost sight of the legal position that has been discussed supra. The Appellate Court straight away went ahead and enhanced the sentence as against the second petitioner and imposed imprisonment for a period of two years and also payment of compensation to the tune of Rs.15,00,000/- (Rupees Fifteen Lakhs only). This enhancement of sentence suffers from two illegalities. The first illegality is that such an enhancement of sentence was made by the Appellate Court even without giving notice to the second petitioner and without questioning him on the sentence. The second illegality that was committed by the Appellate Court was that the sentence which is unsustainable in the eye of law was imposed by the Trial Court and hence, there is no question of enhancing the same. 20.In the light of the above discussion, judgment of the Appellate Court enhancing the sentence also requires the interference of this Court. 21.Under normal circumstances, this Court would have remanded the matter back to the file of the Trial Court and directed the Trial Court to commence from the stage of questioning on sentence as against the petitioners. This process will drag on the case for years together. This Court does not want to resort to this procedure, since this Court finds that the respondent had a good case on merits and the findings of both the Courts below do not suffer from any perversity on this front. Hence, in order to strike a balance, this Court is inclined to exercise its revisional jurisdiction to cure the illegality and consequently, direct the petitioners to pay the sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) as fine and this amount can be further directed to be paid as compensation to the respondent under Section 357 (1) of Cr.P.C. Substantial justice can be rendered by modifying the sentence as indicated above. 22.In the result, these criminal revision cases are disposed of in the following manner: (a) The sentence is modified and the petitioners are directed to deposit the fine amount of Rs.15,00,000/- (Rupees Fifteen Lakhs only) before the Trial Court on or before 24.04.2023 and in default, the second petitioner shall undergo one year simple imprisonment. (b)The fine amount deposited by the petitioners before the Trial Court shall be paid as compensation to the respondent under Section 357 (1) of Cr.P.C. Hence, after the deposit of the fine amount, it is left open to the respondent to file an appropriate memo before the Trial Court and the Trial Court shall permit the respondent to withdraw the sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) deposited by the petitioners (c) If the petitioners deposit the fine amount as directed in clause (a) within the time stipulated, the offence shall stand compounded and the judgment and order passed by the Trial Court and as confirmed by the Appellate Court shall automatically stand set aside, and (d) If the petitioners fail to comply with direction (a), the second petitioner shall undergo the default sentence and the same shall be ensured by the Trial Court. 23. Post these criminal revision cases under the caption 'For Reporting Compliance' on 26.04.2023 and if the petitioners comply with the directions issued in clause (a), the same shall be recorded. In the absence of the same, the default sentence will be enforced. In the meantime, the Tamil Nadu State Legal Services Authority shall pay a sum of Rs.5,000/- (Rupees Five Thousand only) to the counsel appointed by this Court to the respondent towards fees.