PUNISHMENT FOR ACCUSED BUT NO RELIEF TO COMPLAINANT

If he is an insolvent person having no capacity to repay, there is no other alternative for the MM but to sentence him to jail.  The reason could be that either you have not claimed your monetary loss, neither you have brought on record his sources of income, nor you could bring on record his movable or immovable property on record and claimed for monetary relief by sale of that property.  You can prefer an appeal before the Sessions Court against this judgement.  Or else, you can prefer criminal revision before sessions court stating that the trial court has not considered his income sources and completely errered in not giving financial relief based on that.  Or you may prefer a review petition before the trial court stating that his income sources have come to your knowledge recently, after passing the judgement and considering the changed situation, the trial court may modify its own order.  Regards.  Adv. Deepak ddkharpudikar@indiatimes.com

deepak sir, is it possible to file a review petition in any criminal cases? if any citations available kindly share in this thread

  Sir,

             i am highly obliged for ur concern to reply to my query however i continue to have my own doubts. Firstly i should clarify that that in both my complaint and affidavit by way of examination in chief i have prayed for double the cheque amount and also other reliefs that the court deems fit. Therefore the question of me lacking in the prayer asking for relief, is ruled out. Secondly in matters u/s 138 where do i get a chance to show the income source of the accused. There is no such way in a normal proceeding u/s 138 where the court even asks the complainant to do so. The accused is facing six trials in similar matters in the same court. The total questioned amount summed up in all cases grosses to about 28 lacs. How can the court arrive upon a decision that the accused is insolvent in such a scenario. The accused has not made any such statement in the court during the entire course of trial neither he has filed for bankruptcy. 

Is there a provision where i can file a revision petition in the High Court (Mumbai) against this judgement. It is pertinent to mention in this regard that the Accused has already initiated his process for filing of appeal against this judgement in the Sessions Court. In such a scenario what will be the net effect if he somehow manages to reverse the judgement in the sessions court and simultaneously i manage to get a revision from the High Court wherein i am granted some monetary relief. Please consider all the facts at hand and help me with your deemed replies. 

                                                                                                       Parthasarathy

Note : In the recent past the Accused's father has expired. Consequently the accused must have inheri

One Major advantages of being declared  insolvent is that he doesnt have to repay at all.....although his name in society degradages...BUt yes bad for the creditors....is there a guarantor invoved?

28 lac is a big amount but never the less u can appeal for may be some amount of money.....thats all depends if the court has attached his property whats the status of his property....?Also may be you havent proved the loss(Lack of Important Records).....

 Sir,

             I have not mentioned the intimate details of the case and probably that is the reason why i am failing to get the appropriate answers. The documents furnished in my case for proving transaction and liability are as follows

  (a)   Bank Statement proving transfer of 30 % of the                                         questioned amount been made to the personal account                               of the Accused.

 (b) Bank Statement showing 30 % of the amount been                                   transferred to a company which is a proprietary concern                                of the father of the accused. (Although court has not taken cognisance of the same on grounds that there was no tripartite agreement between me, father of the accused and the accused himself where the accused has taken over the liability of his father's company in respect of the relevant transaction been made to them)

(c) A Statement of Undertaking made on a stamp paper,prepared and signed by the Accused, wherein he has not only accepted the receipt of the amount but also specified the cheque numbers through which he was to refund the amount. The same cheques are the subject matter of my case. 

I feel that the above documents serves reasonably well to be accepted in court of law as a proof of the loss incurred by me.

I will look forward to a technical reply in the line of filing a criminal revision petition in the High Court against the judgement in my case. 

I think that it would not be prudent to file a civil suit for recovery in this matter as it will take at least a decade to reach a judgement. What will be the value of this money after a decade considering the present rate of inflation. 

I would be interested to seek the services of a lawyer who is a real expertand whose understanding of the matters u/s 138 is deep and thorough. 

"Parthasarathy" :

1.   Dishonour of Cheque under N.I.Act,  is a penal offence punishable with  Fine   " AND / OR " Imprisonment,  IF the offence (charge of dishonour of cheque)  is not Compounded by the parties in private,  BUT SHOULD BE BEFORE THE FINAL ORDERS of the MM.

2.  N.I.Act, has no provision for  "recovery of cheque amount"  which can be paid to the Complaintant (drawee).  Neither there is any provision to consider  "Loss or Financial relief or whatever"  that has  occured to the complaintant.

Since N.I.Act is a penal act (criminal offence)  AND NOT A CIVIL Act (civil offence),  the complaintant has no jurisdiction to ask for relief or pray for  payment of   "double the cheque amount or whatever".    This is  "False"  plaint drafting.
 

In N.I.Act, the complaintant has no role to ask for  ANY MONETARY OR ANY OTHER RELIEF.
The complaintant can only prove or provide evidences as to "how the N.I.Act was violated"  and it is no use to prove as to "how the complainant was put to a loss".  The MM court simply has no jurisdiction to consider  the losses caused to the complainant.
 

All this can be done under the CPC and the IPC,  but definetly not under the N.I.Act.

3.  The Act has penal provision for  "double the cheque amount"  BUT THAT IS AS A  "JUDICIAL FINE"   (imposed as a discretion  of the magistrate "MM").    This fine is to be deposited in the MM's  Court  by the Accused (drawer) on conviction and   "IS NOT"   payable to the Complaintant (drawee),   UNLESS & UNTIL  THE MM SPCIFICALLY DIRECTS in his final order that the  "fine" so recovered may be paid OR compensated to the Complaintant  (in full or part or whatever,  BUT AGAIN,  IT IS non-disputable DISCRETION OF THE MM).

4.  In other words,  the Complaintant cannot seek directions from the MM for payment of the cheque amount,  "as a matter of right",  IF or AS & WHEN the accused is convicted.

5.  IT IS THE  SOLE "DISCRETION"   OF THE  "ACCUSED"  (on conviction) to pay the "judicial fine"  or  simply undergo  the imprisonement term (whatever and whichever)  as directed by the MM.

6.  If the Accused choses to go for the "imprisonment term",  THEN THE COMPLAINTANT HAS NO OTHER REMEDY but to catch flies.  More-so, since by now the Limitation Period of filing a Civil suit for recovery of amount is also long over.

7.  Immediately after the  Intitial & Mandatory notice u/s 138,  The complaintant should be effectively guided (by his legal counsel)  to file 3 types of different simultaneous proceedings before the judiciary, namely :

a)  under the N.I.Act

b)  under the I.P.C.

c)  under the C.P.C.

8.  The higher court's,  will not entertain any petition, which is not within the "frame-work"  of the respective Law  (N.I.Act)  AND  the N.I.Act  does  " NOT HAVE ANY '    provision  for "money recovery"  whatsoever.

9.  IF interested, complaintant  may file petition to the higher courts to  further  "ENHANCE"  punishment / fine factor awarded to the accused, within the maximum parameters as laid down in the Act .   BEYOND THAT NOTHING.

10.  HOWEVER,  a natural & obivious  fact remains that IF the accused appeals in the Sessions or the HC, and still loses, the accused may try to come in terms (settlement) with you. 
 

Presently it is best to  TRY  "re-open the closed doors"  and initiate initial dialogue with the accused and persuade him to give you small parts of money  and  simultaneous'ly  coerce him to sign a fresh money repayment agreement and obtain fresh cheques from him.  THUS effectively  this gives you future leverage to use options as described in point no. 7 (above).

11.  OF COURSE,  (further in my opinion),  you always have the option to count and re-count the innumerable stars in the sky.

CONSIDER THIS :
"Life is a succession of lessons which must be lived to be understood"

Keep Smiling .... Hemant Agarwal
 

Kudos Hemant,

For such a informative and practical reply.

Thanks and best regards

Daksh

dear,

138 is not for recovery,this is criminal case.if you want recovery,then you go to civil court,file suit for recovery provided that you are instituting within limitation period

Dear Mr. Parthasarathy,

As this a forum for discussion and resolving the queries of aggrieved person, therefore it is quite obvious to have a different opinion on every problem. Because in this forum the opinion is given by the intellectuals so difference in opinion does not matter. First read the provision under section 138 of Negotiable Instruments Act, 1881, provided for dishonor of the Cheque.

Section 138. Dishonour of cheque for insufficiency, etc., of funds in the accounts

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for ²["a term which may extend to two year"], or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, ³["within thirty days"] of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and

(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability].

OBJECTS AND REASONS OF AMENDING ACT OF 2002

The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due fo insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques, Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act- (Para 1)

Keeping in view the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments, Act, 1881, namely:-

(i) to increase the punishment as prescribed under the Act from one year to two years;

(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days; (Para 4)

1. Inserted by Act 66 of 1988, sec. 4 (w.e.f. 1-4-1989). Earlier Chapter XVII relating to “Notaries Public" Inserted by Act 2 of 1985, sec. 10, was replaced by the Notaries Act, 1952 (53 of 1952), sec. 16 (w.e.f. 14-2-1956).

2. Substituted by Act 55 0f 2002, sec. 7 for "a term which may extended to one year" (w.e.f. 6-2-2003).

3. Substituted by Act 55 of 2002, sec. 7, for "within Fifteen days" (w.e.f. 6-2-2003).

Now coming up to your query, I would like to suggest you to file a revision against the Judgment passed by the Magistrate, as per the provision of section 397, 399 and 401 of the code of Criminal Procedure Code, 1973 and make a prayer to award compensation under section 359 of Criminal Procedure Code, 1973.

Section 397. Calling for records to exercise powers of revision.

(1) The High Court or any Sessions Judge may call for and examine the record of any proceeding before any inferior Criminal Court situate within its or his local jurisdiction for the purpose of satisfying itself' or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior court, and may, when calling for such record, direct that the execution of' any sentence or order be suspended, and if the accused is in confinement, that he be released on bail or on his own bond pending the examination of the record.

Explanation. All Magistrates, whether Executive or Judicial, and whether exercising original or appellate jurisdiction shall be deemed to be inferior to the Sessions Judge for the purposes of this subsection and of section 398.

(2) The powers of revision conferred by sub-section (I) shall not be exercised in relation to any interlocutory order passed in any appeal, inquiry, trial or other proceeding.

(3) If an application under this section has been made by any person either to the High Court or to the Sessions Judge, no further application by the same person shall be entertained by the of the of them.

Section 399. Sessions Judge’s powers of revision.

(1) In the case of any proceeding the record of which has been called for by himself the Sessions Judge may exercise all or any of the powers, which may be exercised by the High Court under sub-section (1) of section 401.

(2) Where any proceeding by way of revision is commenced before a Sessions Judge under subsection (1), the provisions of sub-sections (2), (3), (4) and (5) of section 401 shall, so far as may be, apply to such proceeding and references in the said subsections to the High Court shall be construed as references to the Sessions Judge.

(3) Where any application for revision is made by or on behalf of any person before the Sessions Judge, the decision of the Sessions Judge thereon in relation to such person shall be final and no further proceeding by way of revision at the instance of such person shall be entertained by the High Court or any other court.

 Section  401. High Court's powers of revision.

(1) In the case of any proceeding the record of which has been called for by it self or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 386, 389, 390 and 391 or on a Court of Session by section 307 and, when the Judges composing the court of revision are equally divided in opinion, the case shall be disposed of in the manner provided by section 392.

(2) No order under this section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by pleader in his own defence.

(3) Nothing in this section shall be deemed to authorise a High Court to convert a finding of acquittal into one of conviction.

(4) Where under this Code an appeal lies and no appeal is brought, no proceeding by way if revision shall be entertained at the instance of the party who could have appealed.

(5) Where under this Code an appeal lies but an application for revision has been made to the High Court by any person and the High Court is satisfied that such application was made under the erroneous belief that no appeal lies thereto and that it is necessary in the interests of justice so to do, the High Court may treat the application for revision as a petition of appeal and deal with the same accordingly.

 I would say that as the trial court has power to award compensation to the aggrieved party, in addition to the fine, if awarded in sentence, due to pendency of litigation. But in your case the Learned Magistrate did not apply his mind towards the Section 357 of the code of Criminal Procedure Code, 1973.

SEE:     2002CriLJ1704, 2002(2) MPHT47, 2002(1) MPLJ286

As the offence under section 138 of Negotiable Instrument Act, 1881 is a Non- Cognizable offence, therefore the appellate Court under section 359 (2) of Criminal Procedure Code, 1973 has power to award compensation/Cost.

See: (1992) BC 76, 1991 CriLJ 683, 1990 RLR 460, Cucusan Foils Pvt. Ltd. vs. State (Delhi Administration), decided by Hon’ble Mr. Justice Santosh Duggal, on 20/8/1990, wherein the Hon’ble High Court held that the offence defined under secton 138 of Negotiable Instrument Act, 1881 is a Non-Cognizable Offence,. Therefore the provision of section 359 of Criminal Procedure Code, 1973 is applicable in your case.

Section 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) When, any person is convicted of any offence for having caused the death of another person or of having abetted the commission of shelf all offence, in paying in, compensation to the persons who are, under the Fatal Accidents Act, 1855 (13 of 1855) entitled to recover damages from the person sentenced for the loss resulting to them from such death;

(d) When any person is convicted of any offence which includes theft, criminal, misappropriation, criminal breach of trust or cheating, or of having dishonestly received or retained, or of having voluntarily assisted in disposing of stolen property knowing or having reason to believe the same to be stolen in compensating any bona fide purchaser of such property for the loss of the same if such property is restored to the possession of the person entitled thereto.

(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 his 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 reason of the act for which the accused person his been so sentenced.

(4) An order under this section may also be made by all Appellate Court or by the High Court or Court of Session 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.

Section 359. Order to pay costs in non-cognizable cases

(1) Whenever any complaint of a non-cognizable offence is made to a court, the court, if it convicts the accused, may in addition to penalty imposed upon him, order him to pay to the complainant, in whole or in part, the cost incurred by him in the prosecution, and may further order that in default of payment, the accused shall suffer simple imprisonment for a period not exceeding thirty days and such costs may include any expenses incurred in respect of' process-fees witnesses and pleader's fees which the court may consider reasonable.

(2) An order under this section may also be made by an Appellate Court or by the High Court or Court of Session when exercising its powers of revision.

In your case filing a revision against the Judgment would suffice your cause, but there are also contrary views of different High Courts in regard of power of Trial Court, to award compensation along with imprisonment and fine thereon.  Even then you can take one chance to file revision against the Judgment.       

See: 1999CriLJ968, IN THE HIGH COURT OF MADRAS, Crl. R.C. No. 614 of 1997, Suresh vs. Natarajan Decided by Hon’ble Mr. Justice M. Karpagavinayagam, on: 25.11.1998.

The above judgment is on the very same facts as of your case. The High Court held that Magistrate has discretion to award penalty of Cheque amount and double thereof, or award sentence only or with fine of any amount.

I am citing the relevant para of the Judgment, which would facilitate you to understand the issue involved in the above captioned case.

“9. The learned Magistrate, while imposing the conviction and the sentence of fine of Rs. 5,000/-, did not advert to the provision under Section 29(2) Cr. P.C. stating that he is empowered to impose a fine of Rs. 5,000/- alone. No doubt, it is true that Section 138 of the Negotiable Instruments Act provides for the payment of fine to the extent of twice the amount of cheque. That does not mean that in every case, the Court is bound to impose fine to the value of the amount of the cheque or twice the value of the cheque. The section would also provide for the sentence of imprisonment or fine or both. Therefore, the learned Magistrate has got judicial discretion either in the imposition of imprisonment or fine or of the amount of fine which he would deem fit to be imposed.

10. In that view of the matter, I do not find any reason to hold that the sentence of fine of Rs. 5,000/- is quite inadequate.

11. It is also to be noticed in this context that besides this remedy of punishing the accused under this offence by collecting the amount by fine, there is yet another remedy available for the complainant to file a suit for recovery of the disputed amount out of the cheque amount.

12. In view of this situation, I do not find any merit in this Revision, though this Court agrees with the principle of law laid down by the decisions referred to above.

13. In the result, the Revision is dismissed.”

By Justice M. Karpagavinayagam, on: 25.11.1998

The section option is filing of Civil Suit under 37 of Code of Civil Procedure, 1908. The procedure adopted by this provision is summary in nature; therefore it does not take to much time to get decided. You file the suit for recovery under this Order, thereafter the court shall issue notice to the Defendant for appearance.  Then the Defendant shall enter his appearance within 10 days from receipt of such notices.

When the Defendant enters his appearance in the court then you have to serve on the defendant with the summons for Judgment as per Rule 3 Sub Rule 4. Thereafter if the defendant contested the suit, he shall file Leave to defend for his defence; otherwise the court shall pass a judgment/Decree in your favour. And if the defendant file Leave to Defend, and court rejects it, even then the court shall pass a judgment/Decree in your favour. If the Leave to defend is admitted by the court, then only the procedure decide the suit would be ordinary, otherwise the court has to adopt summary procedure to decide the Suit. In short the suit based on Negotiable Instrument does not take a long time to get it decided.   

 ORDER XXXVII. ORDER XXXVII - SUMMARY PROCEDURE (THE FIRST SCHEDULE)

ORDER XXXVII
SUMMARY PROCEDURE ¹[* * *]

1. The Words "On Negotiable Instruments" omitted by Act 104 of 1976, sec. 84 (w.e.f. 1-2-1977).

¹[1. Courts and classes of suits to which the Order is to apply

(1) This Order shall apply to the following Court, namely:-

(a) High Courts, City Civil Courts and Courts of Small Causes; and

(b) other Courts;

Provided that in respect of the Courts referred to in clause (b), the High Court may, by notification in the Official Gazette, restrict the operation of this Order only to such categories of suits as it deems proper, and may also, from time to time, as the circumstances of the case may require, by subsequent notification in the Official Gazette, further restrict, enlarge or vary, the categories of suits to be brought under the operation of this Order as it deems proper.

(2) Subject to the provisions of sub-rule (1) the Order applies to the following classes of suits, namely:-

(a) suits upon bills of exchange, hundies and promissory notes;

(b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising,-

(i) on a written contract, or

(ii) on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or

(iii) on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only.]

1. Subs. by Act No. 104 of 1976 for rule 1 (w.e.f. 1-2-1977).

HIGH COURT AMENDMENTS

Bombay.-(1) In Order XXXVII, in rule 1, for sub-rule (1), substitute the following sub-rule, namely:-

"1. This order shall apply to the following Courts, namely:-

(a) High Courts, City Civil Courts and Courts of Small Causes; and

(b) such other Courts as may be specifically empowered in this behalf by the High Court from time to time by a Notification in the Official Gazette: Provided that in respect of the Courts referred to in clause (b), the High Court may, by notification in the Official Gazette, restrict the operation of this Order only to such categories or suits as it deems proper and may also from time to time, as the circumstances of the use may require, by subsequent notification in the Official Gazette, further restrict, enlarge, or vary, the categories of suits to be brought under the operation of this Order as it deems proper." (w.e.f. 1-10-1983)

[2. Institution of summary suits

(1) A suit, to which this Order applies, may if the plaintiff desires to proceed hereunder, be instituted by presenting a plaint which shall contain,-

(a) a specific averment to the effect that the suit is filed under this Order;

(b) that no relief, which does not fall within the ambit of this rule, has been claimed in the plaint;

(c) the following inscripttion, immediately below the number of the suit in the title of the suit, namely:-

"(Under Order XXXVII of the Code of Civil Procedure, 1907)."

(2) the summons of the suit shall be in Form No. 4 in Appendix B or in such other form as may, from time to time, be prescribed.

(3) The defendant shall not defend the suit referred to in sub-rule (1) unless he enters an appearance and in default of his entering an appearance the allegations in the plaint shall be deemed to be admitted and the plaintiff shall entitled to a decree for any sum, not exceeding the sum mentioned in the summons, together with interest at the rate specified, if any, up to the date of the decree and such sum for costs as may be determined by the High Court from time to time by rules made in that behalf and such decree may be executed forthwith.]

1. Subs. by Act No. 104 of 1976 for rule 2 (w.e.f. 1-2-1977).

¹[3. Procedure for the appearance of defendant

(1) In a suit to which this Order applies, the plaintiff shall, together with the summons under rule 2, serve on the defendant a copy of the plaint and Annexures thereto and the defendant may, at any time within ten days of such service, enter an appearance either in person or by pleader and, in either case, he shall file in Court an address for service of notices on him.

(2) Unless otherwise order, all summonses, notices and other judicial processes required to be served on the defendant, shall deemed to have been duly served on him if they are left at the address given by him for such service.

(3) On the day of entering the appearance, notice of such appearance shall be given by the defendant to the plaintiffs pleader, or, if the plaintiff sues in person, to the plaintiff himself, either by notice delivered at or sent by pre-said letter directed to the address of the plaintiffs pleader or of the plaintiff, as the case may be.

(4) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in Form No. 4A in Appendix B for such other Form as may be prescribed from time to time, returnable not less than ten days from the date of service supported by an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defence to the suit.

(5) The defendant may, at any time within ten days from service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just:

Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious:

Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.

(6) At the hearing of such summons for judgment,-

(a) if the defendant has not applied for leave to defend, or if such application has been made and is refused, the plaintiff shall be entitled to judgment forthwith; or

(b) if the defendant is permitted to defend as to the whole or any part of the claim, the Court or Judge may direct him to give such security and within such time as may be fixed by the Court or Judge and that, on failure to give such security with the time specified by the Court or Judge or to carry out such other directions as may have been given by the Court or judge, the plaintiff shall be entitled to judgment forthwith.

(7) The Court or Judge may, for sufficient cause shown by the defendant, execute the delay of the defendant in entering an appearance or in applying for leave to defend the suit.]

1. Subs, by Act No. 104 of 1976 for rule 3 (w.e.f. 1-2-1977).

4. Power to set aside decree

After decree for the Court may, under special circumstances set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the Court so to do, and on such terms as the Court thinks fit.

5. Power to order bill, etc., to be deposited with officer of Court

In any proceeding under this Order the Court may order the bill, hundi or note on which the suit is founded to be forthwith deposited with an officer of the Court, and may further order that all proceedings shall be stayed until the plaintiff gives security for the costs thereof.

6. Recovery of cost of noting non-acceptance of dishonoured bill or note-

The holder of every dishonoured bill of exchange or promissory note shall have the same remedies for the recovery of the expenses incurred in noting the same for non-acceptance or non-payment otherwise, by reason of such dishonour, as he has under this Order for the recovery of the amount of such bill or note.

7. Procedure in suits

Save as provided by this Order, the procedure in suits hereunder shall be the same as the procedure in suits instituted in the ordinary manner.

  I hope that this would resolve your query in all.

Thanking you.

Dear Mr. Parthasarathy,

As this a forum for discussion and resolving the queries of aggrieved person, therefore it is quite obvious to have a different opinion on every problem. Because in this forum the opinion is given by the intellectuals so difference in opinion does not matter. First read the provision under section 138 of Negotiable Instruments Act, 1881, provided for dishonor of the Cheque.

Section 138. Dishonour of cheque for insufficiency, etc., of funds in the accounts

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for ²["a term which may extend to two year"], or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, ³["within thirty days"] of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and

(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability].

OBJECTS AND REASONS OF AMENDING ACT OF 2002

The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due fo insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques, Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act- (Para 1)

Keeping in view the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments, Act, 1881, namely:-

(i) to increase the punishment as prescribed under the Act from one year to two years;

(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days; (Para 4)

1. Inserted by Act 66 of 1988, sec. 4 (w.e.f. 1-4-1989). Earlier Chapter XVII relating to “Notaries Public" Inserted by Act 2 of 1985, sec. 10, was replaced by the Notaries Act, 1952 (53 of 1952), sec. 16 (w.e.f. 14-2-1956).

2. Substituted by Act 55 0f 2002, sec. 7 for "a term which may extended to one year" (w.e.f. 6-2-2003).

3. Substituted by Act 55 of 2002, sec. 7, for "within Fifteen days" (w.e.f. 6-2-2003).

Now coming up to your query, I would like to suggest you to file a revision against the Judgment passed by the Magistrate, as per the provision of section 397, 399 and 401 of the code of Criminal Procedure Code, 1973 and make a prayer to award compensation under section 359 of Criminal Procedure Code, 1973.

Section 397. Calling for records to exercise powers of revision.

(1) The High Court or any Sessions Judge may call for and examine the record of any proceeding before any inferior Criminal Court situate within its or his local jurisdiction for the purpose of satisfying itself' or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed, and as to the regularity of any proceedings of such inferior court, and may, when calling for such record, direct that the execution of' any sentence or order be suspended, and if the accused is in confinement, that he be released on bail or on his own bond pending the examination of the record.

Explanation. All Magistrates, whether Executive or Judicial, and whether exercising original or appellate jurisdiction shall be deemed to be inferior to the Sessions Judge for the purposes of this subsection and of section 398.

(2) The powers of revision conferred by sub-section (I) shall not be exercised in relation to any interlocutory order passed in any appeal, inquiry, trial or other proceeding.

(3) If an application under this section has been made by any person either to the High Court or to the Sessions Judge, no further application by the same person shall be entertained by the of the of them.

Section 399. Sessions Judge’s powers of revision.

(1) In the case of any proceeding the record of which has been called for by himself the Sessions Judge may exercise all or any of the powers, which may be exercised by the High Court under sub-section (1) of section 401.

(2) Where any proceeding by way of revision is commenced before a Sessions Judge under subsection (1), the provisions of sub-sections (2), (3), (4) and (5) of section 401 shall, so far as may be, apply to such proceeding and references in the said subsections to the High Court shall be construed as references to the Sessions Judge.

(3) Where any application for revision is made by or on behalf of any person before the Sessions Judge, the decision of the Sessions Judge thereon in relation to such person shall be final and no further proceeding by way of revision at the instance of such person shall be entertained by the High Court or any other court.

 Section  401. High Court's powers of revision.

(1) In the case of any proceeding the record of which has been called for by it self or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 386, 389, 390 and 391 or on a Court of Session by section 307 and, when the Judges composing the court of revision are equally divided in opinion, the case shall be disposed of in the manner provided by section 392.

(2) No order under this section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by pleader in his own defence.

(3) Nothing in this section shall be deemed to authorise a High Court to convert a finding of acquittal into one of conviction.

(4) Where under this Code an appeal lies and no appeal is brought, no proceeding by way if revision shall be entertained at the instance of the party who could have appealed.

(5) Where under this Code an appeal lies but an application for revision has been made to the High Court by any person and the High Court is satisfied that such application was made under the erroneous belief that no appeal lies thereto and that it is necessary in the interests of justice so to do, the High Court may treat the application for revision as a petition of appeal and deal with the same accordingly.

 I would say that as the trial court has power to award compensation to the aggrieved party, in addition to the fine, if awarded in sentence, due to pendency of litigation. But in your case the Learned Magistrate did not apply his mind towards the Section 357 of the code of Criminal Procedure Code, 1973.

SEE:     2002CriLJ1704, 2002(2) MPHT47, 2002(1) MPLJ286

As the offence under section 138 of Negotiable Instrument Act, 1881 is a Non- Cognizable offence, therefore the appellate Court under section 359 (2) of Criminal Procedure Code, 1973 has power to award compensation/Cost.

See: (1992) BC 76, 1991 CriLJ 683, 1990 RLR 460, Cucusan Foils Pvt. Ltd. vs. State (Delhi Administration), decided by Hon’ble Mr. Justice Santosh Duggal, on 20/8/1990, wherein the Hon’ble High Court held that the offence defined under secton 138 of Negotiable Instrument Act, 1881 is a Non-Cognizable Offence,. Therefore the provision of section 359 of Criminal Procedure Code, 1973 is applicable in your case.

Section 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) When, any person is convicted of any offence for having caused the death of another person or of having abetted the commission of shelf all offence, in paying in, compensation to the persons who are, under the Fatal Accidents Act, 1855 (13 of 1855) entitled to recover damages from the person sentenced for the loss resulting to them from such death;

(d) When any person is convicted of any offence which includes theft, criminal, misappropriation, criminal breach of trust or cheating, or of having dishonestly received or retained, or of having voluntarily assisted in disposing of stolen property knowing or having reason to believe the same to be stolen in compensating any bona fide purchaser of such property for the loss of the same if such property is restored to the possession of the person entitled thereto.

(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 his 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 reason of the act for which the accused person his been so sentenced.

(4) An order under this section may also be made by all Appellate Court or by the High Court or Court of Session 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.

Section 359. Order to pay costs in non-cognizable cases

(1) Whenever any complaint of a non-cognizable offence is made to a court, the court, if it convicts the accused, may in addition to penalty imposed upon him, order him to pay to the complainant, in whole or in part, the cost incurred by him in the prosecution, and may further order that in default of payment, the accused shall suffer simple imprisonment for a period not exceeding thirty days and such costs may include any expenses incurred in respect of' process-fees witnesses and pleader's fees which the court may consider reasonable.

(2) An order under this section may also be made by an Appellate Court or by the High Court or Court of Session when exercising its powers of revision.

In your case filing a revision against the Judgment would suffice your cause, but there are also contrary views of different High Courts in regard of power of Trial Court, to award compensation along with imprisonment and fine thereon.  Even then you can take one chance to file revision against the Judgment.       

See: 1999CriLJ968, IN THE HIGH COURT OF MADRAS, Crl. R.C. No. 614 of 1997, Suresh vs. Natarajan Decided by Hon’ble Mr. Justice M. Karpagavinayagam, on: 25.11.1998.

The above judgment is on the very same facts as of your case. The High Court held that Magistrate has discretion to award penalty of Cheque amount and double thereof, or award sentence only or with fine of any amount.

I am citing the relevant para of the Judgment, which would facilitate you to understand the issue involved in the above captioned case.

“9. The learned Magistrate, while imposing the conviction and the sentence of fine of Rs. 5,000/-, did not advert to the provision under Section 29(2) Cr. P.C. stating that he is empowered to impose a fine of Rs. 5,000/- alone. No doubt, it is true that Section 138 of the Negotiable Instruments Act provides for the payment of fine to the extent of twice the amount of cheque. That does not mean that in every case, the Court is bound to impose fine to the value of the amount of the cheque or twice the value of the cheque. The section would also provide for the sentence of imprisonment or fine or both. Therefore, the learned Magistrate has got judicial discretion either in the imposition of imprisonment or fine or of the amount of fine which he would deem fit to be imposed.

10. In that view of the matter, I do not find any reason to hold that the sentence of fine of Rs. 5,000/- is quite inadequate.

11. It is also to be noticed in this context that besides this remedy of punishing the accused under this offence by collecting the amount by fine, there is yet another remedy available for the complainant to file a suit for recovery of the disputed amount out of the cheque amount.

12. In view of this situation, I do not find any merit in this Revision, though this Court agrees with the principle of law laid down by the decisions referred to above.

13. In the result, the Revision is dismissed.”

By Justice M. Karpagavinayagam, on: 25.11.1998

THANKS , TOO GOOD INFO ABOUT 138 ...................THE COMPENSATION TO THE COMPLAINANT IS ALWAYS PAID THROUGH THE JUDICIAL FINE AMOUNT ORDERED , AND ITS LEFT TO THE DESCREATION OF THE JUDGE,