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2024 DIGILAW 496 (CHH)

Manoj Bithalkar v. P. K. Rai, S/o Late Shri D. P. Rai

2024-07-11

SANJAY K.AGRAWAL

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ORDER : Sanjay K. Agrawal, J. 1. Since common question of fact & law is involved in both the revisions and both arise from one & same criminal trial i.e. Criminal Complaint Case No.1512/2010, they have been clubbed together and heard together and are being disposed of by this common order. 2. The applicant herein purchased a part of land from the non-applicant herein situate at Village Khamtarai amounting to Rs.13,60,000/- for which agreement was executed between them on 27-5-2005 and some payment was also made and for the outstanding payment of Rs.5,44,000/-, eight different cheques on eight different dates were issued in favour of the non-applicant from 5-1-2006 to 30-1-2006. On 4-7-2006, the non-applicant deposited all the cheques in his bank which were got dishonoured on 5-7-2006 holding that ‘account closed’ and accordingly, legal notice was sent by the non-applicant to the applicant on 10-8-2006 which got returned on 14-8-2006. Accordingly, one common complaint was filed on 13-9-2006 by the non-applicant herein / complainant whereupon trial was conducted and the trial Court by judgment dated 31-10-2011 convicted the applicant under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the NI Act’) and sentenced him to undergo simple imprisonment for one year and also directed the applicant to pay compensation of Rs.5,44,000/- to the non-applicant herein / complainant under Section 357(3) of the CrPC against which unsuccessful appeal was preferred by the applicant leading to filing of Criminal Revision No.86/2013, whereas, Criminal Revision No.688/2011 has been preferred to quash the judgment passed in appeal to the extent it relates to the direction to deposit 20% of Rs.5,44,000/-, which was directed by the appellate Court to be deposited as interim compensation and which was not deposited by the applicant herein. Thus, Cr.Rev.No.688/2011 was filed for quashment of judgment dated 21-11-2011 passed by the appellate Court to the extent of depositing 20% of Rs.5,44,000/- as interim compensation and Cr.Rev.No.86/2013 was filed for quashment of judgment dated 30-1-2013 passed by the trial Court. This is how both the revisions have been placed for consideration. 3. Mr. Goutam Khetrapal, learned counsel appearing for the applicant herein / accused, would make a solitary submission that single complaint is not maintainable for dishonour of multiple cheques issued by the applicant on the same cause of action. This is how both the revisions have been placed for consideration. 3. Mr. Goutam Khetrapal, learned counsel appearing for the applicant herein / accused, would make a solitary submission that single complaint is not maintainable for dishonour of multiple cheques issued by the applicant on the same cause of action. He would further submit that eight different cheques issued by the applicant were dishonoured, therefore, eight complaints could have been filed and as such, single complaint was not maintainable which was not adverted to by the trial Court and therefore the judgment passed by the trial Court is liable to be set aside on that very count only. 4. Mr. Dhiraj Kumar Wankhede, learned counsel appearing for the non-applicant herein / complainant, would submit that both the courts below were absolutely justified in granting the complaint and the legal issue raised is squarely covered by a recent decision of the Karnataka High Court in the matter of A. Adinarayana Reddy v. S. Vijayalakshmi and another Criminal Petition No.5909 of 2023, decided on 5-2-2024, as such, both the criminal revisions deserve to be dismissed. 5. I have heard learned counsel for the parties and perused the judgment of the trial Court as well as of the appellate Court and also went through the record with utmost circumspection. 6. The question is, whether single complaint is maintainable for dishonour of multiple cheques issued by the applicant on the same cause of action / transaction in question? 7. However, the issue is no longer res integra. It stands decided authoritatively by the Supreme Court in the matter of Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663 in which their Lordships have clearly held that if cheques issued in one transaction subsequently found dishonoured and multiple complaints are allowed to be filed, it would cause tremendous harassment and prejudice to the drawers of the cheque, and it has been observed by their Lordships in paragraph 23 as under: - “23. We are also in agreement with the learned Attorney General's suggestions for controlling the filing of multiple complaints that are relatable to the same transaction. It was submitted that complaints are being increasingly filed in multiple jurisdictions in a vexatious manner which causes tremendous harassment and prejudice to the drawers of the cheque. We are also in agreement with the learned Attorney General's suggestions for controlling the filing of multiple complaints that are relatable to the same transaction. It was submitted that complaints are being increasingly filed in multiple jurisdictions in a vexatious manner which causes tremendous harassment and prejudice to the drawers of the cheque. For instance, in the same transaction pertaining to a loan taken on an instalment basis to be repaid in equated monthly instalments, several cheques are taken which are dated for each monthly instalment and upon the dishonour of each of such cheques, different complaints are being filed in different courts which may also have jurisdiction in relation to the complaint. In light of this submission, we direct that it should be mandatory for the complainant to disclose that no other complaint has been filed in any other court in respect of the same transaction. Such a disclosure should be made on a sworn affidavit which should accompany the complaint filed under Section 200 CrPC. If it is found that such multiple complaints have been filed, orders for transfer of the complaint to the first court should be given, generally speaking, by the High Court after imposing heavy costs on the complainant for resorting to such a practice. These directions should be given effect prospectively.” 8. The Karnataka High Court in A. Adinarayana Reddy (supra) has followed the decision of the Supreme Court in Damodar S. Prabhu (supra) to hold that single complaint is maintainable for multiple cheques issued by the respondent on same cause of action. 9. Reverting to the facts of the case in light of the decision of the Supreme Court in Damodar S. Prabhu (supra) as also in light of the decision of the Karnataka High Court in A. Adinarayana Reddy (supra) followed by the Delhi High Court in the matter of Pawan Dhanpatrai Malhotra v. Mahender Khari 2024 SCC OnLine Del 3951, it is quite vivid that all the eight cheques issued by the applicant / accused in favour of the complainant / non-applicant herein towards payment of amount in lieu of purchase of plot i.e. one and same transaction and one and same cause of action, were dishonoured and therefore single legal notice was issued by the complainant before filing complaint, though the same was not served. As such, in light of the aforesaid decisions, both the Courts below are absolutely justified in holding the complaint to be maintainable and the trial Court is also justified in trying the complaint and the appellate Court is equally justified in dismissing the appeal on merits. I do not find any merit in both the revisions qua holding the applicant guilty for the offence under Section 138 of the NI Act. 10. Now coming to the sentence part, the trial Court has convicted the accused / applicant herein under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for one year and further directed to pay a compensation of Rs.5,44,000/- to the complainant / non-applicant herein under Section 357(3) of the CrPC, which has been questioned on behalf of the applicant on the ground that jail sentence is not mandatory and only fine (if any) ought to have been imposed by the trial Court and the order imposing sentence is unsustainable and bad in law. 11. In order to consider the said plea it would be appropriate to set out the provisions contained in the aforesaid provision:— "357. Order to pay compensation.—(1) When a court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the court may, when passing judgment, order the whole or any part of the fine recovered to be applied— (a) in defraying the expenses properly incurred in the prosecution; (b) in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the court, recoverable by such person in a civil court; (c)-(d) ** ** ** (2) ** ** ** (3) 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. (4) An order under this section may also be made by an appellate court or by the High Court or Court of Sessions when exercising its powers of revision. (4) An order under this section may also be made by an appellate court or by the High Court or Court of Sessions when exercising its powers of revision. (5) At the time of awarding compensation in any subsequent civil suit relating to the same matter, the court shall take into account any sum paid or recovered as compensation under this section." 12. The law with regard to grant of compensation under Section 357(3) of the CrPC in cases arising from Section 138 of the NI Act is well settled. The object of Section 138 of the NI Act appears to be punitive as well as compensatory in nature as it provides a single forum and single proceeding for enforcement in criminal liability (for dishonouring the cheque) and for enforcement of civil liability (for realization of cheque amount). 13. In the matter of Suganthi Suresh Kumar v. Jagdeeshan (2002) 2 SCC 420 , the Supreme Court while dealing with flea-bite sentence (imprisonment till rising of court and fine of Rs.5,000/-) imposed under Section 138 of the NI Act, held that same is not justified when the amount (over 4 lakhs) had not been paid by accused to complainant during pendency of the case before trial court or High Court and observed as under: - “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 flea-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 lookout 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 Section 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. 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 Section 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 at least during the pendency of the case.” 14. In the matter of R. Vijayan v. Baby and another (2012) 1 SCC 260 , their Lordships of the Supreme Court culled out the following principle contained in the provisions of Chapter-XVII of the Act, which states as under:-- “(i) The provision for levy of fine which is linked to the cheque amount and may extent to twice the amount of the cheque (Section 138) thereby rendering Section 357(3) virtually infructuous insofar as cheque dishonour cases are concerned." Their Lordships in the later part of judgment while considering the intention of legislature for enacting Section 138 of the NI Act, have held as under:— "17. 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. Though a complaint under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1)(b) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount. A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the drawer of the cheque for the offence of dishonour, becoming secondary. 18. Having reached that stage, if some Magistrates go by the traditional view that the criminal proceedings are for imposing punishment on the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a "victim" in the real sense, but is a well-to-do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. 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 the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as 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 mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity 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. 19. We are conscious of the fact that proceedings under Section 138 of the Act cannot be treated as civil suits for recovery of the cheque amount with interest. Uniformity 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. 19. We are conscious of the fact that proceedings under Section 138 of the Act cannot be treated as civil suits for recovery of the cheque amount with interest. We are also conscious of the fact that compensation awarded under Section 357(1)(b) is not intended to be an elaborate exercise taking note of interest, etc. Our observations are necessitated due to the need to have uniformity and consistency in decision making. In same type of cheque dishonour cases, after convicting the accused, if some courts grant compensation and if some other courts do not grant compensation, the inconsistency, though perfectly acceptable in the eye of the law, will give rise to certain amount of uncertainty in the minds of litigants about the functioning of courts. Citizens will not be able to arrange or regulate their affairs in a proper manner as they will not know whether they should simultaneously file a civil suit or not. The problem is aggravated having regard to the fact that in spite of Section 143(3) of the Act requiring the complaints in regard to cheque dishonour cases under Section 138 of the Act to be concluded within six months from the date of the filing of the complaint, such cases seldom reach finality before three or four years let alone six months. These cases give rise to complications where civil suits have not been filed within three years on account of the pendency of the criminal cases. While it is not the duty of criminal courts to ensure that successful complainants get the cheque amount also, it is their duty to have uniformity and consistency with other courts dealing with similar cases.” 15. In the matter of Bir Singh v. Mukesh Kumar (2019) 4 SCC 197 , the Supreme Court following the principle of law laid down in R. Vijayan (supra), held that Section 138 of the NI Act is both punitive as well as compensatory and restitutive, and also provides for enforcement of civil liability for realisation of cheque amount. It was held as under: - “25. In R. Vijayan v. Baby5 this Court observed that the object of Chapter XVII of the Negotiable Instruments Act is both punitive as also compensatory and restitutive. It was held as under: - “25. In R. Vijayan v. Baby5 this Court observed that the object of Chapter XVII of the Negotiable Instruments Act is both punitive as also compensatory and restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of the civil liability for realisation of the cheque amount, thereby obviating the need for the creditor to move two different fora for relief. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided.” Thereafter, while granting appeal and confirming conviction of the respondent therein, their Lordships of the Supreme Court sentenced him only to fine, which was enhanced to Rs.16 lakhs and further directed the same to be paid as compensation to the complainant. It was held as under: - “40. The appeals are allowed. The judgment Mukesh Kumar v. Bir Singh, 2017 SCC OnLine P&H 5352 and order of the High Court is set aside. The conviction of the respondent under Section 138 of the Negotiable Instruments Act is confirmed. However, the respondent-accused is sentenced only to fine, which is enhanced to Rs 16 lakhs and shall be paid as compensation to the appellant complainant. The fine shall be deposited in the trial court within eight weeks from the date, failing which the sentence of imprisonment of one year as imposed by the trial court shall revive. There shall be no order as to costs.” 16. Thus, it is quite vivid that under Section 138 of the NI Act, Criminal Court is competent to levy fine up to twice the cheque amount and direct payment of such amount as compensation by way of restitution in regard to the loss on account of dishonour of cheque under Section 357(1)(b) of the CrPC and as such, the power under Section 357(3) of the CrPC cannot be exercised by Criminal Court in the cheque dishonour cases. 17. 17. Taking into consideration, the provisions contained in Section 138 of the NI Act in which punishment imposable is two years imprisonment or with fine which can be twice the amount of cheque and taking note of the law laid down by the Supreme Court noticed herein-above including the judgment in Bir Singh (supra) and other cases, punishment to be awarded in Section 138 of the NI Act cases are meant to ensure payment of money and threat of jail is only to ensure recovery and as such, imposition of jail sentence is not mandatory. In the considered opinion of this Court, ends of justice would be served if in addition to Rs.5,44,000/-, Rs.2,85,000/- as additional amount and Rs.15,000/- towards interest on the said amount, total amounting to Rs.3,00,000/-, is imposed. Accordingly, the accused / applicant herein is sentenced to fine of Rs.5,44,000/- + Rs.3,00,000/- = Rs.8,44,000/- which shall be paid as compensation to the non-applicant herein / complainant under Section 357(1)(b) of the CrPC, it would be excluding the amount already deposited. Remaining amount of compensation shall be deposited by applicant before the CCD of the concerned trial Court within a period of 45 days and shall be paid immediately to the complainant / non-applicant. If balance amount of fine is not deposited within the stipulated period, the applicant shall undergo simple imprisonment for one year as directed by the trial Court and affirmed by the appellate Court. 18. As a fallout and consequence of the aforesaid discussion, Cr.Rev. No.86/2013 is allowed in part and Cr.Rev.No.688/2011 is dismissed as having become infructuous.