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Home > SC > Civil Law > Negotiable Instruments Act > Dilip S. Dahanukar Vs. Kotak Mahindra Co. Ltd. & Anr



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Dilip S. Dahanukar Vs. Kotak Mahindra Co. Ltd. & Anr

Posted on 26 March 2009 by jyoti

Title

Dilip S. Dahanukar Vs. Kotak Mahindra Co. Ltd. & Anr



Coram

S.B. SINHA, DALVEER BHANDARI



Act

Negotiable Instruments Act



Subject

Code of Criminal Procedure, 1973 :

Sections 357 and 424-Imprisonment for default in payment of fine-Held-It remains stayed pending elapsing of period for presenting appeal or decision therein-Section 424 is subject to Section 357(2).

Section 357(3)-Compensation not forming part of sentence of fine-Recovery of-Held-Pending elapsing of period for presenting appeal or decision therein, its recovery remains stayed-It is unacceptable that although a compensation payable out of quantum of fine would remain stayed under Section 357(2) of Code, if a compensation is directed to be paid under sub-Section (3) thereof, same would not attract said provision-It was more so as compensation was recoverable as a 'fine', but legal fiction raised in relation to recovery of fine only, it is in that sense `fine' stood on a higher footing than compensation-If, therefore, under Section 357(2) realization of fine is to be stayed automatically, there is no reason as to why legislative intent cannot apply to compensation directed to be paid in terms of sub-Section (3).

Section 357(3)-Compensation not forming part of sentence of fine-Quantum of-Held-It compensates in one way or another, hence amount thereof must be reasonable and not arbitrary-It should not be more than sufficient to compensate complainant-Ordinarily, it should be less than amount which can be granted by a Civil Court upon appreciation of evidence brought before it for losses which might have reasonably been suffered by plaintiff-Though there is no upper limit to it, its subject to other provisions of Code which mandates that amount of fine imposed on an accused cannot be more than five thousand-In view of fact that Parliament did not think it fit to put a ceiling limit in regard to amount of compensation leviable upon an accused, discretionary jurisdiction thereto must be exercised judiciously.

Section 357(3)-Compensation not forming part of sentence of fine-Order for payment of-Held-Before issuing a direction to pay compensation, capacity of accused to pay it must be judged; a summary enquiry in this behalf is necessary and some reasons, which may not be very elaborate, also have to be assigned-Furthermore, as Section 357(3) neither imposes any limitation on power to grant compensation nor enumerates factors for which it is to be paid, power to grant it should be exercised only in appropriate cases, and such jurisdiction cannot be exercised at whims and caprice of a judge.

Section 357(3)-Compensation not forming part of sentence of fine-Conditions for suspension of sentence-Held-They should also be reasonable-A part of compensation may be directed to be deposited, but that must be a reasonable amount-Order may not be passed which cannot be complied resulting in a person being sent to prison-Court, in such cases, must endeavour to strike a balance-Section 421 of Code may be taken recourse to-Ordinarily, a person should not suffer imprisonment only because conditions imposed for suspending sentence are harsh-Also, an accused shall not be taken in custody during trial.

Section 357-Compensation-Award of-Held-Magistrates cannot award it in addition to fine-Power to award it under Section 357(3) is not an ancillary power, but an additional power-Also, when fine is imposed, private party has no right to insist that compensation may be awarded to him out of it.

Section 357(3)-Negotiable Instrument Act, 1881-Sections 138 and 141-Company along with its Chairman convicted for offence punishable under Section 138 r.w. 141 of Act of 1881-Company sentenced to pay a fine of twenty five thousand rupees and in default thereof, Chairman was to suffer simple imprisonment for one month-Also, Chairman sentenced to simple imprisonment for one month and directed to pay a compensation of fifteen lakhs rupees under Section 357(3) to complainant-On admission of appeal against it, direction given for deposition of amount of five lakhs rupees each-Correctness of-Direction of Trial Judge was unreasonable- For all intent and purpose, both Sub-sections (1) and (3) of Section 357 were invoked-Liability of Chairman was a vicarious one in terms of Section 141 of Act of 1881- Direction for payment of compensation of fifteen lakhs rupees by Chairman of Company found to be wrong when fine of only of twenty five thousand rupees was imposed on Company-On facts, Chairman directed to deposit one lakh rupees which complainant was entitled to withdraw.

Section 374-Appeal from conviction-Scope of-Held-It is a statutory right affecting liberty of a person-Keeping in view expansive definition of Article 21 of Constitution of India, 1950, it is also a Fundamental Right-It can, thus, neither be interfered/impaired, nor subjected to any condition-Also, right of Court to suspend sentence cannot be taken away and such a provision would be ultra vires.

Interpretation of statutes-Penal statute-Held-Where different meanings are possible, it must be construed liberally in favour of an accused-Also, while Court shall give due weight to need of victim, it cannot ignore right of an accused, and in case of conflict, construction which favours accused shall prevail.

Interpretation of statute-Legal fiction-Held-It must be construed having regard to purport of statute.

Appellant, along with Company of which he was Chairman, were convicted for commission of an offence punishable under Section 138 r.w. 141 of Negotiable Instruments Act. The company was sentenced to pay a fine of twenty five thousand rupees, and in default of payment thereof, appellant was to suffer simple imprisonment for one month. Appellant was sentenced to suffer simple imprisonment for one month and also directed to pay compensation to the complainant, quantified at fifteen lakhs rupees under Section 357(3) of Cr.P.C. An appeal was preferred there against. The Appellate Court while admitting the appeal, directed them to deposit five lakhs rupees each. A writ petition was filed by the appellants questioning the legality of the said order, which by reason of the impugned judgment has been dismissed. Hence the present appeal.

Appellant contended that (i) right to prefer an appeal being a constitutional right in terms of Article 21 of the Constitution of India, 1950 no condition could have been imposed in respect therefor or for suspension of sentence; (ii) in terms of Section 357(2) of the Code, the amount of fine imposed would automatically be suspended.

Respondents contended that (i) a distinction must be made between imposition of fine and application thereof, as contemplated under Section 357(1)(a) to (d) of the Code, and an amount of compensation directed to be paid under Sub-section (3) thereof; (ii) on a conjoint reading of Section 357 read with Sections 421 and 424 of the Code, it is permissible to direct recovery of fine forthwith.



Citation

, 2007(4 )SCR1122, 2007(6 )SCC528 , 2007(5 )SCALE452 , 2007(6 )JT204



Head Notes

Partly allowing the appeals, the Court

HELD 1.1. An appeal is indisputably a statutory right and an offender who has been convicted is entitled to avail the right of appeal which is provided for under Section 374 of the Code. Right of Appeal from a judgment of conviction affecting the liberty of a person keeping in view the expansive definition of Article 21 is also a Fundamental Right. Right of Appeal, thus, can neither be interfered with or impaired, nor it can be subjected to any condition. [Para 12] [1134-g]

Mardia Chemicals Ltd. and Ors. v. Union of India and Ors., [2004] 4 SCC 311, followed

Garikapati Veeraya v. N. Subbiah Choudhry & Ors., AIR [1957] SCR 540, Babu Rajirao Shinde v. The State of Maharashtra, [1971] 3 SCC 337, Siddanna Apparao Patil v. The State of Maharashtra, [1970] 1 SCC 547, State of Gujarat v. Salimbhai Abdulgaffar Shaikh and Ors., [2003] 8 SCC 50, Madhav Hayawadanrao Hoskot v. State of Maharashtra, [1978] 3 SCC 552, Transmission Corporation of A.P. v. Ch. Prabhakar & Ors., [2004] 5 SCC 551, Madhav Hayawadanrao Hoskot v. State of Maharashtra, [1978] 3 SCC 544 and Jolly George Varghese and Anr. v. The Bank of Cochin, [1980] 2 SCC 360, relied on

1.2. Although the right of appeal being a vested right cannot be taken away, it must also be noticed that right of the Court cannot be taken away to suspend the sentence and such a provision would be ultra vires. [Para 24]
[1139-d]

Dadu alias Tulsidas v. State of Maharashtra, [2000] 8 SCC 437, relied on

2.1. There exists a distinction between fine and compensation, although, in a way it seeks to achieve the same purpose. An amount of compensation can be directed to be recovered as a 'fine' but the legal fiction raised in relation to recovery of fine only, it is in that sense `fine' stands on a higher footing than compensation awarded by the Court. If, therefore, under sub-Section (2) of Section 357, realization of fine, at least in respect of the factor(s) enumerated in clause (1) of sub-Section to be stayed automatically, there is no reason as to why the legislative intent cannot be held to apply in relation to amount of compensation directed to be paid in terms of sub-Section (3).
[Para 30 and 31] [1139-h; 1140-a-b]

Rachhpal Singh v. State of Punjab, [2002] 6 SCC 462, State of Punjab v. Gurmej Singh, [2002] 6 SCC 663, relied on

2.2. It is unacceptable that although a compensation payable out of the quantum of fine would remain stayed under sub-Section (2) of Section 357 of the Code, if a compensation is directed to be paid under sub-Section (3) thereof, the same would not attract the said provision. [Para 41] [1144-b]

P. Suresh Kumar v. R. Shankar, (2007) 4 SCALE 143, referred to

2.3. Sub-Section (2) of Section 357 uses the word `fine'. It does not say that what would be stayed i.e. application of fine. Sub-Section 2 of Section 357, does not contemplate any other interpretation. Even assuming that respondents are correct in their submission, still then sub-Section (3) would be squarely attracted. [Para 43] [1144-d]

2.4. Section 421 only provides for a mode of recovery of fine. Section 424 provides for an enabling clause so as to enable the Court to take recourse to either of the situations provided for therein. The said provision, however, would be subject to sub-Section (2) of Section 357 of the Code. Section 431 of the Code provides for a legal fiction in terms whereof any money other than a fine shall be recoverable as if it were a fine. Even according to respondents sub-Section (2) of Section 357 of the Code would be attracted in such a situation. There does not appear to be any reason as to why the amount of compensation should be held to be automatically payable, although the same is only to be recovered as if a fine has been imposed.
[Para 45] [1144-h; 1145-a]

Stanny Felix Pinto v. Jangid Builders Pvt. Ltd. & Anr., [2001] 2 SCC 416, held inapplicable

2.5. When a direction is issued for payment of compensation, having regard to Sub-Section (2) of Section 357 of the Code, the application thereof should ordinarily be directed to be stayed. It will, therefore, be for the Court to stay the operation of that part of the judgment whereby and where under compensation has been directed to be paid, which would necessarily mean that some conditions therefor may also be imposed. A fortiori a part of the amount of compensation may be directed to be deposited, but the same must be a reasonable amount. [Para 53] [1147-f-g]

3. In a case of this nature, the Court must invoke the doctrine of purposive construction. Sub-Section (2) of Section 357 was enacted for a definite purpose. It must be given its full effect. [Para 58] [1148-c]

K. Bhaskaran v. Sankaran Vaidhyan Balan & Anr., [1999] 7 SCC 510, Suganthi Suresh Kumar v. Jagdeeshan, [2002] 2 SCC 420 and National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 4 SCALE 36, relied on.

K.L. Gupta v. Bombay Municipal Corpn. [1968] 1 SCR 274, Maruti Udyog Ltd. v. Ram Lal, [2005] 2 SCC 638, Reserve Bank of India v. Peerless General Finance & Investment Co. Ltd., [1987] 1 SCC 424, Punjab Land Development and Reclamation Corpn. Ltd. v. Presiding Officer, Labour Court, [1990] 3 SCC 682, Balram Kumawat v. Union of India, [2003] 7 SCC 628, Pratap Singh v. State of Jharkhand, [2005] 3 SCC 682, referred to.

V. Prasada Rao v. The State of A.P. & Anr., 2002 Crl. Law Journal 395, approved .

R (Haw) v. Secretary of State for the Home Department & Anr., [2006] 3 All ER p. 428-438, referred to

4.1. Unfortunately, the Legislature has not made any express provision in this behalf. In absence of any express provision, the question must be considered having regard to the overall object of a statute.
[Para 53] [1147-d]

4.2. The purpose of imposition of fine and/or grant of compensation to a great extent must be considered having the relevant factors therefor in mind. It may be compensating the person in one way or the other. The amount of compensation sought to be imposed, thus, must be reasonable and not arbitrary. Before issuing a direction to pay compensation, the capacity of accused to pay the same must be judged. A fortiori, an enquiry in this behalf even in a summary way may be necessary. Some reasons, which may not be very elaborate, may also have to be assigned; the purpose being that whereas the power to impose fine is limited and direction to pay compensation can be made for one or the other factors enumerated out of the same; but sub-Section (3) of Section 357 does not impose any such limitation and thus, power thereunder should be exercised only in appropriate cases. Such a jurisdiction cannot be exercised at the whims and caprice of a judge. [Para 37] [1143-a-c]

Hari Singh v. Sukhbir Singh & Ors., [1988] 4 SCC 551 and Sarwan Singh & Ors. v. State of Punjab, [1978] 4 SCC 111, relied on

4.3. Even in a case where violation of fundamental right guaranteed under Article 21 is alleged, the amount of compensation cannot be arbitrary or unreasonable even under Public Law. [Para 40] [1143-f]

Sube Singh v. State of Haryana, (2006) 3 SCC 178, relied on

4.4. If a fine is to be imposed under the Act, the amount which in the opinion of the Parliament would be more than sufficient to compensate the complainant can it be said, that an unreasonable amount should be directed to be paid by the Court while exercising its power under sub-Section (3) of Section 357? The answer thereto must be rendered in the negative. Sub-Section (5) of Section 357 also provides for some guidelines. Ordinarily, it should be lesser than the amount which can be granted by a Civil Court upon appreciation of the evidence brought before it for losses which might have reasonably been suffered by the plaintiff. Jurisdiction of the Civil Court, in this behalf, for realization of the amount in question must also be borne in mind. A criminal case is not a substitution for a civil suit, far less execution of a decree which may be passed. [Para 38] [1143-d-e]

4.5. It is also of some significance to note that whereas under Section 357(1) of the Code of Criminal Procedure a fine of Rs. 5000/- can be imposed; fine in terms of Section 357 (2) thereof can be twice the amount of cheque whereas there is no upper limit for award of a compensation. But the same would be subject to other provisions of the Code of Criminal Procedure which mandates that the amount of fine imposed on an accused cannot be more than Rs. 5000/-. The very fact that the Parliament did not think it fit to put a ceiling limit in regard to the amount of compensation leviable upon an accused, the discretionary jurisdiction thereto must be exercised judiciously. [Para 66]
[1152-g-h; 1153-a]

4.6. The matter has to be considered from another angle. An accused for commission of an offence under Section 138 of the Negotiable Instruments Act would ordinarily be granted bail in view of the fact that the offence is a bailable one. [Para 63] [1151-d-e]

4.7. Prosecution under the Negotiable Instruments Act may be contemplated as a measure of deterrence, but the same is never meant to be a persecution. [Para 39] [1143-f]

4.8. An order may not be passed which the appellant cannot comply with resulting him being sent to prison. Appellate Court, in such cases, must make an endeavour to strike a balance. Section 421 of the Code of the Criminal Procedure may take recourse to, but therefor he cannot be remanded to custody. [Para 54] [1147-g]

4.9. Ordinarily, an accused shall not be taken in custody during trial. Thus, while exercising the appellate power, ordinarily, a person should not suffer imprisonment only because the conditions imposed for suspending the sentence are harsh. [Para 66] [1153-a-b]

4.10. Having regard to the aforementioned factors the amount of compensation not only must be reasonable one, the conditions for suspending the sentence should also be reasonable. It is only with that intent in view, the doctrine of purposive construction should be applied. [Para 67] [1153-b-c]

5. Magistrates cannot award compensation in addition to fine. When a fine is imposed, however, the private party has no right to insist that compensation may be awarded to him out of the amount of fine. The power to award compensation under Section 357(3) is not an ancillary power. It is an additional power. [Para 42] [1144-c]

Balraj v. State, (1995) Crl. Law Journal 3217, referred to

6.1. Prima facie, without going into the merit of the appeal, the direction of the Trial Judge appears to be somewhat unreasonable. Appellant has been sentenced to imprisonment. Only fine has been imposed on the Company. Thus, for all intent and purpose, the Trial Judge has invoked both Sub-sections (1) and (3) of Section 357 of the Code. The liability of the appellant was a vicarious one in terms of Section 141 of the Negotiable Instruments Act. The question may also have to be considered from the angle that the Trial Judge thought it fit to impose a fine of Rs. 25,000/- only upon the Company. If that be so, a question would arise as to whether an amount of compensation for a sum of Rs. 15 lakhs should have been directed to be paid by the Chairman of the Company. The answer is that it is not. [Para 69] [1153-d-E]

6.2. In the facts and circumstances of the case, it is reasonable to direct the appellant to deposit a sum of Rs. 1 lakh within a period of four weeks, from date. The Respondent - Company, however, would be entitled to withdraw the said amount. The deposit of such amount by the appellant shall be without prejudice to the rights and contentions of the parties in the appeal.
[Para 71] [1154-b-c]

7.1. A penal statute, in the event, the different meanings are possible to be given, must be construed liberally in favour of an accused.
[Para 56] [1148-a-b]

7.2. While the Court shall give due weight to the need of the victim, it cannot ignore the right of an accused. In a case of conflict, construction which favours the accused shall prevail. [Para 57] [1148-b]

8. Legal fiction must be construed having regard to the purport of the statute. [Para 44] [1144-f]

Sadashiv Dada Patil v. Purushottam Onkar Patil (D) By Lrs., (2006) 10 SCALE 21, M.P. State Electricity Board v. Union of India & Ors., (2006) 9 SCALE 194, Maruti Udyog Ltd. v. Ram Lal & Ors., [2005] 2 SCC 638 and Bharat Petroleum Corpn. Ltd. v. P. Kesavan & Anr., [2004] 9 SCC 772, referred to

Kamal Mohan Gupta for the Appellant.

Uday Lalit, Nandini Gore and V.N. Raghupathy for the Respondents.



Judgment Made On

04/10/2007

JUDGMENT:
J U D G M E N T

With
Criminal Appeal No. 521 of 2007
(Arising out of S.L.P. (Crl.) No. 3355 of 2006)
Criminal Appeal No. 522 of 2007
(Arising out of S.L.P.(Crl.) No. 3490 of 2006)



S.B. Sinha, J.

Leave granted.

Interpretation of Section 357 of the Code of Criminal Procedure, 1973
('the Code', for short) vis-`-vis the provisions of the Negotiable Instruments
Act ('the Act', for short), as regards power to impose sentence of fine is
involved in these appeals which arise out of a judgment and order dated
6.6.2006 passed by the High Court of Bombay in Criminal Writ Petition No.
1167 of 2006.

Accused No.1-M/s. Goodvalue Marketing Co. Ltd., a company
registered and incorporated under the Companies Act, 1956 and Accused
No.2-Appellant herein were convicted for commission of an offence
involving Section 138 of the Act by a judgment of conviction and sentence
dated 23.2.2006 holding :

"The accused No.1 company M/s. Goodvalue
Marketing Co. Ltd. stands convicted for the offence
punishable under Section 138 r.w. 141 of Negotiable
Instruments Act.
The accused No.1 company, is sentenced to pay a
fine of Rs.25,000/- (Rupees Twenty Five Thousand
only). In default of payment of fine, the accused No.2
Mr. Dilip Dahanukar, the Chairman of accused No.1 and
representative at the trial, shall suffer S.I. for 1 month.
The accused No.2 Mr. Dilip S. Dahanukar, stands
convicted for the offence punishable under Section 138
r.w. 141 of Negotiable Instruments Act, 1881.
The accused No.2 is sentenced to suffer S.I. for 1
month.
The accused No.2 is also directed to pay
compensation to the complainant, quantified (sic) at
Rs.15,00,000/- (Rupees Fifteen lakhs only), under
Section 357(3) of Cr.P.C. The accused No.2 is entitled to
pay the amount of compensation in two equal monthly
instalments of Rs.7,50,000/- each. The first instalment of
Rs.7,50,000/- shall be paid on or before 23-03-2006 and
the second instalment of Rs.7,50,000/- shall be paid on or
before 24-04-2006 in default of payment of the amount
of compensation the accused No.2 shall suffer further S.I.
for 2 month."


An appeal was preferred thereagainst. The Appellate Court by an
order dated 27.4.2006 while admitting the appeal, directed them to deposit a
sum of Rs. 5 lakhs each within four weeks from the said date. A writ
petition was filed by the appellants questioning the legality of the said order
which by reason of the impugned judgment has been dismissed.

Submissions of Mr. Subash Jha, learned Counsel appearing on behalf
of the appellant are :

i) That having regard to the provisions of Section 357(2) of the
Code, the impugned judgment is wholly unsustainable inasmuch as in terms
thereof the amount of fine imposed would automatically be suspended.

ii) Right to prefer an appeal being a constitutional right in terms of
Article 21 of the Constitution of India, no condition could have been
imposed in respect therefor or for suspension of sentence.

Mr. Uday Umesh Lalit, learned Senior Counsel appearing on behalf of
the respondents, on the other hand, would submit that a distinction must be
made between imposition of fine and application thereof, as contemplated
under Clauses (a) to (d) of Sub-Section (1) of Section 357 and an amount of
compensation directed to be paid under Section (3) thereof.

We have noticed hereinbefore the sentence imposed upon the accused.
It was submitted that a conjoint reading of Section 357 read with Sections
421 and 424 of the Code would clearly go to show that it is permissible for a
Court to direct recovery of fine forthwith and if it is to be held that recovery
of fine is automatically stayed, Section 421 and 424 of the Code would
become nugatory.

The Act is a special statute. Section 138(1) thereof provides for
imposition of sentence upto two years or a fine which may extend to twice
the amount of the cheque or with both.

Before embarking upon the rival contentions raised by the parties, we
may notice the relevant provisions of the Code :

"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-
* * * *
(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;
* * * *
(2) If the fine is imposed in a case which is subject
to appeal, no such payment shall be made before the
period allowed for presenting the appeal has elapsed, or
if an appeal be presented, before the decision of the
appeal.
(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.
* * * *
(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."

"421. Warrant for levy of fine. (1) When an
offender has been sentenced to pay a fine the Court
passing the sentence may take action for the recovery of
the fine in either or both of the following ways, that is to
say, it may-

(a) issue a warrant for the levy of the amount by
attachment and sale of any movable property
belonging to the offender;
(b) issue a warrant to the collector of the
district, authorizing him to realize the
amount as arrears of land revenue from
the movable or immovable property, or
both of the defaulter:

Provided that, if the sentence directs that in default
of payment of the fine, the offender shall be imprisoned,
and if such offender has undergone the whole of such
imprisonment in default, no Court shall issue such
warrant unless, for special reasons to be recorded in
writing, it considers it necessary so to do, or unless it has
made an order for the payment of expenses or
compensation out of the fine under Section 357."

"431. Money ordered to be paid recoverable as
a fine. Any money (other than a fine) payable by virtue
of any order made under this Code, and the method of
recovery of which is not otherwise expressly provided
for, shall be recoverable as if it were a fine:"

"439. Special powers of High Court or Court of
Session regarding bail. (1) A High Court or Court of
Session may direct-
(a) that any person accused of an offence and in
custody be released on bail, and if the offence
is of the nature specified in sub-section (3) of
Section 437, may impose any condition which
it considers necessary for the purposes
mentioned in that sub-section;
(b) that any condition imposed by a Magistrate
when releasing any person on bail be set aside
or modified:
Provided that the High Court or the Court of
Session shall, before granting bail to a person who is
accused of an offence which is triable exclusively by the
Court of Session or which, though not so triable, is
punishable with imprisonment for life, give notice of the
application for bail to the Public Prosecutor unless it is,
for reasons to be recorded in writing, of opinion that it is
not practicable to give such notice.
(2) A High Court or Court of Session may direct
that any person who has been released on bail under this
Chapter be arrested and commit him to custody."

It is, therefore, apparent that if a Court imposes a sentence of fine or a
sentence or where it forms a part thereof, the Court is entitled to direct that
whole or any part of the fine recovered, to be applied to in respect of the
factors enumerated in clauses (a), (b), (c) or (d). Section 421 of the Code
deals with the mode and manner in which the fine levied is to be recovered.
Section 424 deals with the steps required to be taken by the Court where the
amount of fine has not been paid forthwith. Section 357 deals with two
types of cases, namely, (i) where only a sentence has been imposed; and (ii)
where fine also forms part of the sentence. When a fine is imposed
simplicitor Section 421 read with Section 424 would be applicable but where
fine forms part of the sentence, it would not have any application.

A statute must be read harmoniously. An amount of compensation
directed to be paid may not form part of a fine. It may be awarded
separately. It may be recoverable as if it is a fine in terms of Section 431 of
the Code but by reason thereof it would not become automatically
recoverable forthwith. The legal position, however, must be considered
keeping in view the purport and object of the Act.

An appeal is indisputably a statutory right and an offender who has
been convicted is entitled to avail the right of appeal which is provided for
under Section 374 of the Code. Right of Appeal from a judgment of
conviction affecting the liberty of a person keeping in view the expansive
definition of Article 21 is also a Fundamental Right. Right of Appeal, thus,
can neither be interfered with or impaired, nor it can be subjected to any
condition.

We may take notice of some of the decisions operating in the field in
this behalf.

In Garikapati Veeraya vs. N. Subbiah Choudhry & Ors. [AIR
1957 SCR 540], this Court opined :

"(i) That the legal pursuit of a remedy, suit, appeal and
second appeal are really but steps in a series of
proceedings all connected by an intrinsic unity and are to
be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of procedure
but is a substantive right.
(iii) The institution of the suit carries with it the
implication that all rights of appeal then in force are
preserved to the parties thereto till the rest of the career
of the suit.
(iv) The right of appeal is a vested right and such a right
to enter the superior court accrues to the litigant and
exists as on and from the date the lis commences and
although it may be actually exercised when the adverse
judgment is pronounced such right is to be governed by
the law prevailing at the date of the institution of the suit
or proceeding and not by the law that prevails at the date
of its decision or at the date of the filing of the appeal.
(v) This vested right of appeal can be taken away only by
a subsequent enactment, if it so provides expressly or by
necessary intendment and not otherwise."


This Court, in Babu Rajirao Shinde vs. The State of Maharashtra
[(1971) 3 SCC 337], observed that a convicted person must be held to be at
least entitled to one appeal as a substantial right.

Yet again in Siddanna Apparao Patil vs. The State of Maharashtra
[(1970) 1 SCC 547], this Court held :

"The right to prefer an appeal from sentence of Court of
Sessions is conferred by Section 410 of the Criminal
Procedure Code. The right to appeal is one both on a
matter of fact and a matter of law. It is only in cases
where there is a trial by jury that the right to appeal is
under Section 418 confined only to a matter of law."


In State of Gujarat vs. Salimbhai Abdulgaffar Shaikh and Others
[(2003) 8 SCC 50], it was held:

"10. Sub-section (4) of Section 34 of POTA
provides for an appeal to the High Court against an
order of the Special Court granting or refusing
bail. Though the word "appeal" is used both in the
Code of Criminal Procedure and the Code of Civil
Procedure and in many other statutes but it has not
been defined anywhere. Over a period of time, it
has acquired a definite connotation and meaning
which is as under:
"A proceeding undertaken to have a decision
reconsidered by bringing it to a higher authority,
especially the submission of a lower court's
decision to a higher court for review and possible
reversal.
An appeal, strictly so-called, is one in which the
question is, whether the order of the court from
which the appeal is brought was right on the
material which the court had before it.
An appeal is removal of the cause from an inferior
to one of superior jurisdiction for the purposes of
obtaining a review or retrial.
An appeal, generally speaking, is a rehearing by a
superior court on both law and fact."
11. Broadly speaking, therefore, an appeal is a
proceeding taken to rectify an erroneous decision
of a court by submitting the question to a higher
court, and in view of the express language used in
sub-section (1) of Section 34 of POTA the appeal
would lie both on facts and on law. Therefore even
an order granting bail can be examined on merits
by the High Court without any kind of fetters on its
powers and it can come to an independent
conclusion whether the accused deserves to be
released on bail on the merits of the case. The
considerations which are generally relevant in the
matter of cancellation of bail under sub-section (2)
of Section 439 of the Code will not come in the
way of the High Court in setting aside an order of
the Special Court granting bail. It is, therefore,
evident that the provisions of POTA are in clear
contradistinction with that of the Code of Criminal
Procedure where no appeal is provided against an
order granting bail. The appeal can lie only against
an order of the Special Court and unless there is an
order of the Special Court refusing bail, the
accused will have no right to file an appeal before
the High Court praying for grant of bail to them.
Existence of an order of the Special Court is,
therefore, a sine qua non for approaching the High
Court."

In regard to the principles of natural justice, it was stated in Madhav
Hayawadanrao Hoskot vs. State of Maharashtra reported in (1978) 3
SCC 552 :

"11. One component of fair procedure is natural justice.
Generally speaking and subject to just exceptions, at least
a single right of appeal on facts, where criminal
conviction is fraught with long loss of liberty, is basic to
civilized jurisprudence. It is integral to fair procedure,
natural justice and normative universality save in special
cases like the original tribunal being a high bench sitting
on a collegiate basis. In short, a first appeal from the
Sessions Court to the High Court, as provided in the
Criminal Procedure Code, manifests this value upheld in
Article 21."


The legal position was declared as under :

"Where the prisoner seeks to file an appeal or revision,
every facility for exercise of that right shall be made
available by the Jail Administration;
These benign prescriptions operate by force of
Article 21 (strengthened by Article 19(1)(d) read with
sub-article (5) from the lowest to the highest court where
deprivation of life and personal liberty is in substantial
peril."

A Constitution Bench of this Court in Mardia Chemicals Ltd. and
Others vs. Union of India and Others [(2004) 4 SCC 311], where the
constitutionality of provisions of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 were
quested qua Section 17(4) thereof, held :

"In view of the discussion already held in this
behalf, we find that the requirement of deposit of 75% of
the amount claimed before entertaining an appeal
(petition) under Section 17 of the Act is an oppressive,
onerous and arbitrary condition against all the canons of
reasonableness. Such a condition is invalid and it is
liable to be struck down."


In Transmission Corporation of A.P. vs. Ch. Prabhakar & Ors.
[(2004) 5 SCC 551], this Court held :

"The appeal is the right of entering a superior court and
invoking its aid and interposition to redress an error of
the court below. Though procedure does surround an
appeal the central idea is a right. The right of appeal has
been recognized by judicial decisions as a right which
vests in a suitor at the time of institution of original
proceedings."


In Madhav Hayawadanrao Hoskot vs. State of Maharashtra
[(1978) 3 SCC 544], this Court held :

"The fact remains that prisoners are situationally at the
mercy of the prison `brass' but their right to appeal,
which is part of the constitutional process to resist illegal
deprivation of liberty, is in peril if district jail officials
ipse dixit that copies have been served is to pass muster
without a title of prisoner's acknowledgement. What is
more, there is no statutory provision for free legal
services to a prisoner, absent which a right of appeal for
the legal illiterates is nugatory and, therefore, a negation
of that fair legal procedure which is implicit in Article 21
of the Constitution as made explicit by this Court in
Maneka Gandhi."

It was further held:-


"Freedom is what freedom does and here we go straight
to Article 21 of the Constitution, where the guarantee of
personal liberty is phrased with superb amplitude."


Although it has been contended that direction to impose a fine of Rs.5
lacs had been issued as a condition precedent for admitting the appeal; from
the order of the Appellate Court, the same does not appear to be correct. In
its order dated 23.4.2006, the learned Appellate Court directed:-

"Appeal admitted.
Substantive sentence @ compensation payable in default
is suspended till the disposal of the appeal, on payment of
Rs.5 lacs within four weeks.

Call R & P.
Appellant be released on same bail.
Appellant to furnish fresh bail bond."


We may also notice that appellant sought time for depositing the
amount of compensation and also asked for the indulgence of the Court for
reduction of the said amount as also for extension of time.

In the Memorandum of Appeal, it was prayed:-

"(d) That the order of depositing of the compensation
imposed by the trial court be suitably modified, to enable
the appellant No. 2 time and come up with reduced
amount of funds to comply with the same."


Although the right of appeal being a vested right cannot be taken
away, we must also notice that right of the Court cannot be taken away to
suspend the sentence and such a provision would be ultra vires. It was so
held in Dadu alias Tulsidas vs. State of Maharashtra [(2000) 8 SCC 437].

The distinction between sub-Sections (1) and (3) of Section 357 is
apparent. Sub-Section (1) provides for application of an amount of fine
while imposing a sentence of which fine forms a part; whereas sub-Section
(3) calls for a situation where a Court imposes a sentence of which fine does
not form a part of the sentence.

Compensation is awarded towards sufferance of any loss or injury by
reason of an act for which an accused person is sentenced. Although it
provides for a criminal liability, the amount which has been awarded as
compensation is considered to be recourse of the victim in the same manner
which may be granted in a civil suit. So far as Appellant No. 2 is concerned,
no fine has been imposed on him. He was directed to pay compensation.

The question is as to whether the matter would come within the
purview of sub-Section (3) and if so, whether sub-Section (2) of Section 357
would automatically be attracted.

The purposes for application of fine imposed has been set out in
clauses (a) to (d) of sub-Sections (1) of Section 357. Clause (b) of sub-
Section (1) of Section 357 provides for payment of compensation out of the
amount of fine. The purpose enumerated in clause (b) of sub-Section (1) of
Section 357 is the same as sub-Section (3) thereof, the difference being that
whereas in a case under sub-Section (1) fine imposed forms a part of the
sentence, under sub-Section (3) compensation can be directed to be paid
whence fine does not form a part of the sentence.

The fine can be imposed only in terms of the provisions of the Act.
Fine which can be imposed under the Act, however, shall be double of the
amount of the cheque which stood dishonoured. When, however, fine is not
imposed, compensation can be directed to be paid for loss or injury caused
to the complainant by reason of commission of the offence. Clause (b) of
sub-Section (1) of Section 357 only provides for application of amount of
fine which may be in respect of the entire amount or in respect of a part
thereof. Sub-Section (3) of Section 357 seeks to achieve the same purpose.

We must, however, observe that there exists a distinction between fine
and compensation, although, in a way it seeks to achieve the same purpose.
An amount of compensation can be directed to be recovered as a 'fine' but
the legal fiction raised in relation to recovery of fine only, it is in that sense
`fine' stands on a higher footing than compensation awarded by the Court.

If, therefore, under sub-Section (2) of Section 357, realization of fine,
at least in respect of the factor(s) enumerated in clause (1) of sub-Section to
be stayed automatically, we see no reason as to why the legislative intent
cannot be held to apply in relation to amount of compensation directed to be
paid in terms of sub-Section (3).

In Rachhpal Singh vs. State of Punjab [(2002) 6 SCC 462], this
Court held:-

"...A perusal of the operative part of the judgment of the
High Court clearly shows that so far as the punishment
under Section 302 is concerned, it has disagreed with the
Sessions Court and altered the sentence to one of life
imprisonment from death. It has nowhere stated that it is
also awarding a fine or that it was confirming the fine
awarded by the Sessions Court for the offence under
Section 302 IPC. In the absence of any such specific
recording in our opinion, it should be deemed that the
High Court has awarded only a sentence of life
imprisonment for an offence under Section 302 IPC. In
such cases where the court does not award a fine along
with a substantive sentence, Section 357(3) comes into
play and it is open to the court to award compensation to
the victim or his family. In our opinion, it is in the
exercise of this power under Section 357(3) that the High
Court has awarded the compensation in question,
therefore, it was well within the jurisdiction of the High
Court..."


Yet again in State of Punjab vs. Gurmej Singh [(2002) 6 SCC 663],
we may notice a similar conclusion was arrived at although in a somewhat
different fact situation :

"11. In the present case, sentence of fine has also been
imposed, as indicated in the earlier part of this judgment.
Out of the fine, a sum of Rs.1000 each had been ordered
to be given to the three injured persons, namely, Dalip
Singh, Amarjit Kaur and Gurmeet Kaur. The balance
amount is to go to the legal heirs of Jagjit Singh. We had
heard the learned counsel for both parties on this aspect.
Learned counsel for the appellant submitted that Gurmeet
Kaur lost both her parents as well as her brother in the
incident and now she is alone and would have become of
marriageable age or may have to start some work of her
own. She would need some money. In case she cannot
be compensated, the amount of fine may be enhanced to
some extent. Learned counsel for the respondent has,
however, submitted that out of seven acres of land
belonging to his father, the same has been divided into
three equal shares and some of it is also under mortgage
and he has got two daughters and a son and his wife. He
has also submitted that whenever the respondent was
released on parole he met Gurmeet Kaur and his wife
also keeps on going to meet her. Their relations are
normal and cordial. If that is so, nothing better can be
thought of in the prevailing circumstances. However, we
are not considering for awarding any compensation to
Gurmeet Kaur under Section 357(3) CrPC but the
amount of fine imposed, can in any case be reasonably
enhanced."

It is, therefore, seen that consideration for payment of compensation is
somewhat different from payment of fine. It is, to the said extent applied
differently. As would be noticed a little later, it is necessary to probe into
the capacity of the accused to pay the amount and the purpose for which it is
directed to be paid.

In Hari Singh vs. Sukhbir Singh & Ors. [(1988) 4 SCC 551], this
Court held:

"Sub-section (1) of Section 357 provides power to award
compensation to victims of the offence out of the
sentence of fine imposed on accused. In this case, we are
not concerned with sub-section (1). We are concerned
only with sub-section (3). It is an important provision
but courts have seldom invoked it. Perhaps due to
ignorance of the object of it. It empowers the court to
award compensation to victims while passing judgment
of conviction. In addition to conviction, the court may
order the accused to pay some amount by way of
compensation to victim who has suffered by the action of
accused. It may be noted that this power of courts to
award compensation is not ancillary to other sentences
but it is in addition thereto. This power was intended to
do something to reassure the victim that he or she is not
forgotten in the criminal justice system. It is a measure
of responding appropriately to crime as well of
reconciling the victim with the offender. It is, to some
extent, a constructive approach to crimes. It is indeed a
step forward in our criminal justice system. We,
therefore, recommend to all courts to exercise this power
liberally so as to meet the ends of justice in a better way.

It was further opined:-

"The payment by way of compensation must, however,
be reasonable. What is reasonable, may depend upon the
facts and circumstances of each case. The quantum of
compensation may be determined by taking into account
the nature of crime, the justness of 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."

In Sarwan Singh & Ors. vs. State of Punjab [(1978) 4 SCC 111],
this Court held :
"...Though Section 545 enabled the court only to pay
compensation out of the fine that would be imposed
under the law, by Section 357 (3) when a Court imposes
a sentence, of which fine does not form a part, the Court
may direct the accused to pay compensation. In
awarding compensation it is necessary for the court to
decide whether the case is a fit one in which
compensation has to be awarded. If it is found that
compensation should be paid, then the capacity of the
accused to pay a compensation has to be determined. In
directing compensation, the object is to collect the fine
and pay it to the person who has suffered the loss. The
purpose will not be served if the accused is not able to
pay the fine or compensation for, imposing a default
sentence for non-payment of fine would not achieve the
object. If the accused is in a position to pay the
compensation to the injured or his dependents to which
they are entitled to, there could be no reason for the court
not directing such compensation. When a person, who
caused injury due to negligence or is made vicariously
liable is bound to pay compensation it is only appropriate
to direct payment by the accused who is guilty of causing
an injury with the necessary mens rea to pay
compensation for the person who has suffered injury."

The purpose of imposition of fine and/or grant of compensation to a
great extent must be considered having the relevant factors therefor in mind.
It may be compensating the person in one way or the other. The amount of
compensation sought to be imposed, thus, must be reasonable and not
arbitrary. Before issuing a direction to pay compensation, the capacity of
accused to pay the same must be judged. A fortiori, an enquiry in this behalf
even in a summary way may be necessary. Some reasons, which may not be
very elaborate, may also have to be assigned; the purpose being that whereas
the power to impose fine is limited and direction to pay compensation can be
made for one or the other factors enumerated out of the same; but sub-
Section (3) of Section 357 does not impose any such limitation and thus,
power thereunder should be exercised only in appropriate cases. Such a
jurisdiction cannot be exercised at the whims and caprice of a judge.

If a fine is to be imposed under the Act, the amount of which in the
opinion of the Parliament would be more than sufficient to compensate the
complainant; can it be said, that an unreasonable amount should be directed
to be paid by the Court while exercising its power under sub-Section (3) of
Section 357? The answer thereto must be rendered in the negative. Sub-
Section (5) of Section 357 also provides for some guidelines. Ordinarily, it
should be lesser than the amount which can be granted by a Civil Court upon
appreciation of the evidence brought before it for losses which might have
reasonably been suffered by the plaintiff. Jurisdiction of the Civil Court, in
this behalf, for realization of the amount in question must also be borne in
mind. A criminal case is not a substitution for a civil suit, far less execution
of a decree which may be passed.
Prosecution under the Act may be contemplated as a measure of
deterrence, but the same is never meant to be a persecution.

Even in a case where violation of fundamental right guaranteed under
Article 21 is alleged, the amount of compensation cannot be arbitrary or
unreasonable even under Public Law.

In Sube Singh vs. State of Haryana [2006 (3) SCC 178], it is stated :

"...The quantum of compensation will, however, depend
upon the facts and circumstances of each case. Award of
such compensation (by way of public law remedy) will
not come in the way of the aggrieved person claiming
additional compensation in a civil court, in the
enforcement of the private law remedy in tort, nor come
in the way of the criminal court ordering compensation
under Section 357 of the Code of Criminal Procedure."

It does not appeal to us that although a compensation payable out of
the quantum of fine would remain stayed under sub-Section (2) of Section
357 of the Code, if a compensation is directed to be paid under sub-Section
(3) thereof, the same would not attract the said provision. [See P. Suresh
Kumar v. R. Shankar, 2007 (4) SCALE 143]

Magistrates cannot award compensation in addition to fine. When a
fine is imposed, however, the private party has no right to insist that
compensation may be awarded to him out of the amount of fine. The power
to award compensation under Section 357(3) is not an ancillary power. It is
an additional power. {See Balraj vs. State [1995 Crl. Law Journal 3217}.

Clause (b) of sub-Section (1) of Section 357 and sub-Section (1) of
Section 357 and sub-Section (3) of Section 357 seek to achieve the same
purpose. What is necessary is to find out the intention of the law maker and
the object sought to be achieved. Sub-Section (2) of Section 357 uses the
word `fine'. It does not say that what would be stayed i.e. application of
fine. Sub-Section 2 of Section 357, in our opinion, does not contemplate
any other interpretation. Even assuming that Mr. Lalit was correct in his
submission, still then sub-Section (3) would be squarely attracted.

The amount of compensation, in view of the legal fiction, may be
recovered under Section 421 of the Code. But the amount of compensation,
having regard to Sub-Section (2) of Section 357 of the Code cannot be
recovered forthwith unless the period of appeal expires.

Legal fiction, it is well- settled, must be construed having regard to
the purport of the statute. {See Sadashiv Dada Patil vs. Purushottam
Onkar Patil (D) By Lrs. [2006 (10) SCALE 21]; M.P. State Electricity
Board vs. Union of India & Ors. [2006 (9) SCALE 194]; Maruti Udyog
Ltd. vs. Ram Lal & Ors. [(2005) 2 SCC 638]; Bharat Petroleum Corpn.
Ltd. vs. P. Kesavan & Anr. [(2004) 9 SCC 772].}

Section 421 only provides for a mode of recovery of fine. Section 424
provides for an enabling clause so as to enable the Court to take recourse to
either of the situations provided for therein. The said provision, however,
would be subject to sub-Section (2) of Section 357 of the Code. Section 431
of the Code provides for a legal fiction in terms whereof any money other
than a fine shall be recoverable as if it were a fine. Even according to Mr.
Lalit, sub-Section (2) of Section 357 of the Code would be attracted in such
a situation. There does not appear to be any reason as to why the amount of
compensation should be held to be automatically payable, although the same
is only to be recovered as if a fine has been imposed.

We are, however, not oblivious of the fact that in Stanny Felix Pinto
vs. Jangid Builders Pvt. Ltd. & Anr. [(2001) 2 SCC 416], Thomas, J.
opined that while entertaining revision applications, a part of the fine should
be directed to be deposited but therein this Court had no occasion to consider
the provisions of Section 357 of the Code in details.

This Court in an appropriate case may have to consider as to whether
in economic offence like Negotiable Instruments Act, the Courts should 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 intend to lay
down any law in this behalf, as at present advised, as we are not concerned
herein with such a situation.

Section 389 does not deal with exactly a similar situation. Section
389 of the Code is to be read with Section 387 thereof. Suspension of a
sentence and enlarging an appellant on bail, who is convicted and realization
of fine has been dealt with by the Parliament under different provisions of
the Code. The power of the Court, thus, to suspend a sentence in regard to
realization of compensation may be different from that of a direction in
realization of fine.

If realization of an amount of compensation payable to a victim as
envisaged under Clause (d) of sub-Section (1) of Section 357 is to be stayed
under sub-Section (2) thereof, there is no reason why the amount of
compensation payable in terms of sub-Section (3) shall not receive the same
treatment.

Doctrine of Purposive Interpretation in a situation of this nature, in
our opinion, shall be applied.

In R (Haw) vs. Secretary of State for the Home Department &
Anr. [(2006) 3 All ER p.428 at p.438], Lord Smith stated:-

"42...a passage from Bennion Statutory Interpretation (4th
edn, 2002) 810 (section 304) entitled, `Nature of
purposive construction'. That begins with the following
words:
`A purposive construction of an enactment is
one which gives effect to the legislative
purpose by- (a) following the literal meaning
of the enactment where the meaning is in
accordance with the legislative purpose (in
this Code called a purposive-and-literal
construction), or (b) applying a strained
meaning where the literal meaning is not in
accordance with the legislative purpose (in
the Code called a purposive-and-strained
construction).'
xxx xxx

44. The passage from Bennion continues:


'...I am not reluctant to adopt a
purposive construction where to apply
the literal meaning of the legislative
language used would lead to results
which would clearly defeat the
purposes of the Act. But in doing so
the task on which a court of justice is
engaged remains one of construction,
even where this involves reading into
the Act words which are not expressly
included in it. [Kammins Ballroom
Co. Ltd. v. Zenith Investments
(Torquay) Ltd. (1970) 2 All ER 871,
[1971] AC 850, [1970] 3 WLR 287]
provides an instance of this; but in
that case the three conditions that
must be fulfilled in order to justify
this course were satisfied. First, it
was possible to determine from a
consideration of the provisions of the
Act read as a whole precisely what the
mischief was that it was the purpose
of the Act to remedy; secondly, it was
apparent that the draftsman and
Parliament had by inadvertence
overlooked, and so omitted to deal
with, an eventuality that required to
be dealt with if the purpose of the Act
was to be achieved; and thirdly, it was
possible to state with certainty what
were the additional words that would
have been inserted by the draftsman
and approved by Parliament had their
attention been drawn to the omission
before the Bill passed into law.
Unless this third condition is fulfilled
any attempt by a court of justice to
repair the omission in the Act cannot
be justified as an exercise of its
jurisdiction to determine what is the
meaning of a written law which
Parliament has passed.'

45. The passage from Bennion continues:

'Lord Diplock's third point is, with
respect, erroneous. The argument that
in Jones v. Wrotham Park Settled
Estates Lord Diplock was mistaken in
saying that for a rectifying
construction to be effected it must be
possible to state with certainty what
the missing words are, has been
endorsed by the House of Lords.
Lord Nicholls of Birkenhead said that
the court must be sure of "the
substance of the provision Parliament
would have used" [See Inco Europe
Ltd. v. First Choice Distribution (a
firm) [2000] 2 All ER 109, [2000] 2
All ER 109, [2000] 1 WLR 586].'"


{See also K.L. Gupta vs. Bombay Municipal Corpn. [(1968) 1 SCR
274 : AIR 1968 SC 303]; Maruti Udyog Ltd. vs. Ram Lal [(2005) 2 SCC
638 : 2005 SCC (L&S) 308]; Reserve Bank of India vs. Peerless General
Finance & Investment Co. Ltd. [(1987) 1 SCC 424]; Punjab Land
Development and Reclamation Corpn. Ltd. vs. Presiding Officer,
Labour Court [(1990) 3 SCC 682]; Balram Kumawat vs. Union of India
[(2003) 7 SCC 628] and Pratap Singh vs. State of Jharkhand [(2005) 3
SCC 682].}

Unfortunately, the Legislature has not made any express provision in
this behalf. In absence of any express provision, the question must be
considered having regard to the overall object of a statute. We have noticed
hereinbefore that Article 21 of the Constitution of India read with Section
374 of Crl.P.C. confers a right of appeal. Such a right is an absolute one. In
a case where a judgment of conviction has been awarded, the Court can
release a person on bail having regard to the nature of offence but as also the
other relevant factors including its effect on society. A person upon arrest
may have to remain in jail as an under trial prisoner. So would a person
upon conviction. A person may also have to remain in jail, in the event he
defaults in payment of fine, if he is so directed. But when a direction is
issued for payment of compensation, having regard to Sub-Section (2) of
Section 357 of the Code, the application thereof should ordinarily be
directed to be stayed. It will, therefore, be for the Court to stay the operation
of that part of the judgment whereby and whereunder compensation has been
directed to be paid, which would necessarily mean that some conditions
therefor may also be imposed. A fortiori a part of the amount of
compensation may be directed to be deposited, but the same must be a
reasonable amount.

An order may not be passed which the appellant cannot comply with
resulting him being sent to prison. Appellate Court, in such cases, must
make an endeavour to strike a balance. Section 421 of the Code of the
Criminal Procedure may take recourse to, but therefor he cannot be
remanded to custody.

The Parliament has dealt with the imposition of substantive sentence
and a sentence of fine vis-`-vis payment of compensation differently.

A penal statute, in the event, the different meanings are possible to be
given, must be construed liberally in favour of an accused.

While the Court shall give due weight to the need of the victim, it
cannot ignore the right of an accused. In a case of conflict, construction
which favours the accused shall prevail.
In a case of this nature, the Court must invoke the doctrine of
purposive construction. Sub-Section (2) of Section 357 was enacted for a
definite purpose. It must be given its full effect.

Reliance has been placed on a judgment of a learned Single Judge of
the Andhra Pradesh High Court in V. Prasada Rao vs. The State of A.P. &
Anr. [2002 Crl. Law Journal 395]. The learned Judge opined that the
purpose of stay in sub-Section (2) of Section 357 would cover a case both
under sub-Section (1) as also under sub-Section (3) stating:-

"8. The fine amount imposed by the Court as a sentence
shall have to be recovered in the first instance so that the
whole of the said amount or part of it can be applied
towards expenses and towards compensation. The Code
clearly envisages recovery of fine amount. The
execution, suspension, remission and commutation of
sentences passed by a criminal Court is envisaged under
Chapter XXXII of the Code. It is in four parts. Part A
deals with the death sentences, Part B deals with
imprisonment, Part C with levy of fine and Part D deals
with general provisions regarding execution. Coming in
the realm of Part C. Section 421 envisages the procedure
of recovery of fine. There has been no specific provision
for recovery of compensation awarded by the criminal
Court. If the compensation awarded is from out of the
fine amount there is no difficulty. However, under the
general provisions of Part D, Section 431 covers the
field. It is a residuary provision, which caters to the
above piquant situation.

The learned Judge referred to Section 431 of the Code and observed :

"The object of granting compensation is one and the
same under these provisions. When the order of
compensation granted under sub-section (1) gets
automatically stayed in the event of filing an appeal there
is no reason as to why the stay shall not operate in
respect of the compensation granted under sub-section
(3) of Section 357 of the Code. Merely because sub-
section (2) is coming under sub-section (1) and speaks of
fine imposed by the Court in an appealable case the
benefit of the stay engrafted under the Section cannot be
restricted to sub-section (1) alone nor its application be
excluded to the provisions of sub-section (3) thereof. It
is manifest now even the compensation granted under
sub-section (3) of Section 357 shall have to be recovered
only as if it were a fine. Consequently, the stay engrafted
under sub-section (2) in my considered view equally
applies to the compensation granted under sub-section (3)
of Section 357 of the Code. It is not a case of suspending
the sentence of fine where it is open to the Court to
impose a condition either for deposit of a part of the fine
amount or for such condition as is appropriate in the
context. Section 357 which enables the Court to grant
compensation, inheres in itself a bar for such payment of
compensation under sub-section (2) which operates
automatically. Imposing a condition in this regard has
not been clearly envisaged by that Section. Oblivious of
the legal position the learned Judge directed the
petitioner to furnish third party security."


In K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr. [(1999) 7
SCC 510], this Court held :

"However, the Magistrate in such cases can
alleviate the grievance of the complainant by making
resort to Section 357(3) of the Code. It is well to
remember that this Court has emphasised the need for
making liberal use of that provision (Hari Singh v.
Sukhbir Singh). 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 exceeding
Rs 5000 the Court has power to award compensation to
be paid to the complainant."


{See also Suganthi Suresh Kumar vs. Jagdeeshan [(2002) 2 SCC
420].}
Recently, in National Insurance Co. Ltd. vs. Laxmi Narain Dhut
[2007 (4) SCALE 36], a Division Bench of this Court laid down the law in
the following terms:

"A statute is an edict of the Legislature and
in construing a statute, it is necessary to seek the
intention of its maker. A statute has to be
construed according to the intent of those who
make it and the duty of the court is to act upon the
true intention of the Legislature. If a statutory
provision is open to more than one interpretation
the Court has to choose that interpretation which
represents the true intention of the Legislature.
This task very often raises difficulties because of
various reasons, inasmuch as the words used may
not be scientific symbols having any precise or
definite meaning and the language may be an
imperfect medium to convey one's thought or that
the assembly of Legislatures consisting of persons
of various shades of opinion purport to convey a
meaning which may be obscure. It is impossible
even for the most imaginative Legislature to
foresee all situations exhaustively and
circumstances that may emerge after enacting a
statute where its application may be called for.
Nonetheless, the function of the Courts is only to
expound and not to legislate. Legislation in a
modern State is actuated with some policy to curb
some public evil or to effectuate some public
benefit. The legislation is primarily directed to the
problems before the Legislature based on
information derived from past and present
experience. It may also be designed by use of
general words to cover similar problems arising in
future. But, from the very nature of things, it is
impossible to anticipate fully the varied situations
arising in future in which the application of the
legislation in hand may be called for, and, words
chosen to communicate such indefinite referents
are bound to be in many cases lacking in clarity
and precision and thus giving rise to controversial
questions of construction. The process of
construction combines both literal and purposive
approaches. In other words the legislative intention
i.e., the true or legal meaning of an enactment is
derived by considering the meaning of the words
used in the enactment in the light of any
discernible purpose or object which comprehends
the mischief and its remedy to which the
enactment is directed. (See District Mining Officer
and Ors. v. Tata Iron & Steel Co. and Anr.JT 2001
(6) SC 183).
It is also well settled that to arrive at the
intention of the legislation depending on the
objects for which the enactment is made, the Court
can resort to historical, contextual and purposive
interpretation leaving textual interpretation aside."

It was also opined:

"More often than not, literal interpretation of
a statute or a provision of a statute results in
absurdity. Therefore, while interpreting statutory
provisions, the Courts should keep in mind the
objectives or purpose for which statute has been
enacted. Justice Frankfurter of U.S. Supreme Court
in an article titled as Some Reflections on the
Reading of Statutes (47 Columbia Law Reports
527), observed that, "legislation has an aim, it
seeks to obviate some mischief, to supply an
adequacy, to effect a change of policy, to
formulate a plan of Government. That aim, that
policy is not drawn, like nitrogen, out of the air; it
is evidenced in the language of the statutes, as read
in the light of other external manifestations of
purpose"."


We, generally, agree with the observations made by the learned Judge,
the same shall, however, be subject to any observations made hereinbefore.

The matter has to be considered from another angle. An accused for
commission of an offence under Section 138 of the Negotiable Instruments
Act would ordinarily be granted bail; in view of the fact that the offence is a
bailable one.

The right to appeal from a judgment of conviction vis-`-vis the
provisions of Section 357 of the Code of Criminal Procedure and other
provisions thereof, as mentioned hereinbefore, must be considered having
regard to the fundamental right of an accused enshrined under Article 21 of
the Constitution of India as also the international covenants operating in the
field.

It is of some significance to notice that in Jolly George Varghese
and Another vs. The Bank of Cochin [(1980) 2 SCC 360], this Court
opined:

"Equally meaningful is the import of Article 21 of
the Constitution in the context of imprisonment for
non-payment of debts. The high value of human
dignity and the worth of the human person
enshrined in Article 21, read with Arts. 14 and 19,
obligates the State not to incarcerate except under
law which is fair, just and reasonable in its
procedural essence. Maneka Gandhi's case [1978]
1 S.C.R. 248 as developed further in Sunil Batra v.
Delhi Administration, Sita Ram and Ors. v. State
of U.P. and Sunil Batra v. Delhi Administration
lays down the proposition. It is too obvious to need
elaboration that to cast a person in prison because
of his poverty and consequent inability to meet his
contractual liability is appalling. To be poor, in this
land of daridra Narayana, is no crime and to
'recover' debts by the procedure of putting one in
prison is too flagrantly violative of Article 21
unless there is proof of the minimal fairness of his
wilful failure to pay in spite of his sufficient means
and absence of more terribly pressing claims on his
means such as medical bills to treat cancer or other
grave illness. Unreasonableness and unfairness in
such a procedure is inferable from Article 11 of the
Covenant. But this is precisely the interpretation
we have put on the Proviso to Section 51 C.P.C.
and the lethal blow of Article 21 cannot strike
down the provision, as now interpreted.

The words which hurt are "or has had since the
date of the decree, the means to pay the amount of
the decree". This implies, superficially read, that if
at any time after the passing of an old decree the
judgment-debtor had come by some resources and
had not discharged the decree, he could be
detained in prison even though at that later point of
time he was found to be penniless. This is not a
sound position apart from being inhuman going by
the standards of Article 11(of the Covenant) and
Article 21(of the Constitution). The simple default
to discharge is not enough. There must be some
element of bad faith beyond mere indifference to
pay, some deliberate or recusant disposition in the
past or, alternatively, current means to pay the
decree or a substantial part of it. The provision
emphasises the need to establish not mere
omission to pay but an attitude of refusal on
demand verging on dishonest disowning of the
obligation under the decree. Here considerations of
the debtor's other pressing needs and straitened
circumstances will play prominently. We would
have, by this construction, sauced law with justice,
harmonised Section 51 with the Covenant and the
Constitution."

It is also of some significance to note that whereas under Section
357(1) of the Code of Criminal Procedure a fine of Rs. 5000/- can be
imposed; fine in terms of Section 357 (2) thereof can be twice the amount of
cheque whereas there is no upper limit for award of a compensation. But the
same would be subject to other provisions of the Code of Criminal
Procedure which mandates that the amount of fine imposed on an accused
cannot be more than Rs. 5000/-. The very fact that the Parliament did not
think it fit to put a ceiling limit in regard to the amount of compensation
leviable upon an accused, the discretionary jurisdiction thereto must be
exercised judiciously. Ordinarily, an accused shall not be taken in custody
during trial. Thus, while exercising the appellate power, ordinarily, a person
should not suffer imprisonment only because the conditions imposed for
suspending the sentence are harsh.

We are of the opinion that having regard to the aforementioned factors
the amount of compensation not only must be reasonable one, the conditions
for suspending the sentence should also be reasonable. It is only with that
intent in view, the doctrine of purposive construction should be applied.

We would, however, like to put a note of caution that the right of an
accused unnecessarily need not be enlarged but it is the court's duty to duly
protect his right.

We are prima facie of the opinion (without going into the merit of the
appeal) that the direction of the learned Trial Judge appears to be somewhat
unreasonable. Appellant herein has been sentenced to imprisonment. Only
fine has been imposed on the Company. Thus, for all intent and purpose, the
learned Trial Judge has invoked both Sub-sections (1) and (3) of Section 357
of the Code. The liability of the appellant herein was a vicarious one in
terms of Section 141 of the Negotiable Instruments Act. The question may
also have to be considered from the angle that the learned Trial Judge
thought it fit to impose a fine of Rs. 25,000/- only upon the Company. If
that be so, a question would arise as to whether an amount of compensation
for a sum of Rs. 15 lakhs should have been directed to be paid by the
Chairman of the Company. We feel that it is not.

We, therefore, are of the opinion :

i) In a case of this nature, Sub-Section (2) of Section 357 of the
Code of Criminal Procedure would be attracted even when
Appellant was directed to pay compensation;

ii) The Appellate Court, however, while suspending the sentence,
was entitled to put the appellant on terms. However, no such
term could be put as a condition precedent for entertaining the
appeal which is a constitutional and statutory right;

iii) The amount of compensation must be a reasonable sum;

iv) The Court, while fixing such amount, must have regard to all
relevant factors including the one referred to in Sub-Section (5)
of 357 of the Code of Criminal Procedure;

v) No unreasonable amount of compensation can be directed to be
paid.

In the facts and circumstances of the case, we, however, think it
reasonable to direct the appellant to deposit a sum of Rs. 1 lakh within a
period of four weeks, from date. The Respondent - Company, however,
would be entitled to withdraw the said amount. The deposit of such amount
by the appellant shall be without prejudice to the rights and contentions of
the parties in the appeal.

These appeals are allowed to the aforementioned extent. In the facts
and circumstances of this case, there shall be no order as to costs.



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