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P. Aboobacker v. P. Ismail And Another
Structured Summary of the Judicial Opinion (Revision Petition under Section 138 N.I. Act)
Factual and Procedural Background
This revision petition challenges concurrent findings of guilt, conviction and sentence in a prosecution under Section 138 of the Negotiable Instruments Act.
Key factual points (as found in the opinion): A cheque for Rs. 2,30,000/- was issued bearing an admitted signature and was handed over by the accused to the complainant. The complainant alleged that the cheque was handed over towards payment for articles supplied. The accused asserted that the cheque was given as security for an anticipated transaction in pepper and not for discharge of any legally enforceable debt or liability.
Evidence at trial: The complainant testified as PW1 and proved exhibits P1–P5 (including Ext. P4, an acknowledged notice of demand). The accused called two defence witnesses: DW1 (a friend) and DW2 (the accused). The trial court accepted the complainant's evidence, found DWs 1 and 2 to be inter se contradictory and not worthy of acceptance, and relied on the fact of non-response to the demand notice.
Procedural history: The trial court convicted the accused and sentenced him to simple imprisonment for six months and awarded compensation of Rs. 10,000/-. On appeal the Sessions Judge reduced the substantive imprisonment to three months but left compensation at Rs. 10,000/-. The present revisional proceedings followed seeking to challenge conviction and/or sentence and to obtain modification of sentence and compensation.
Legal Issues Presented
- Whether the cheque was issued for the discharge of a legally enforceable debt/liability (i.e., whether conviction under Section 138 N.I. Act is sustainable given the accused's contention that the cheque was only security for an anticipated transaction).
- Whether the concurrent verdicts of guilt, conviction and sentence should be interfered with in revision (including the credibility and acceptance of PW1 vis-à-vis DWs 1 and 2).
- Whether the revisional court has power to modify a sentence and to issue or vary directions under Section 357(3) of the Code of Criminal Procedure (Cr.P.C.), including imposing compensation with a default sentence to enforce payment.
- Whether the accused is entitled to a further opportunity of hearing before upward modification of a direction under Section 357(3) Cr.P.C. (i.e., the scope of the accused's right to be heard when compensation is enhanced).
- Whether the complainant must be given notice or an opportunity to be heard before the revisional court reduces substantive imprisonment while simultaneously enhancing compensation.
Arguments of the Parties
Appellant / Accused (as recorded)
- Contended that the cheque was issued as security for an anticipated pepper transaction and not for discharge of any legally enforceable debt or liability.
- Later sought to contest the authenticity of the acknowledgement (Ext. P4), claiming at a late stage that the signature on Ext. P4 was not his.
- Requested leniency in sentencing and argued that the direction for payment of compensation should not be enhanced.
- Relied on Mangilal v. State of M.P. to assert the accused's right to be heard before any amendment to a direction under Section 357(3) Cr.P.C. to his prejudice.
Respondent / Complainant (as recorded)
- Alleged that the cheque was handed over towards payment for articles supplied (i.e., in discharge of a legally enforceable debt).
- Proved exhibits P1–P5 and his own testimony as PW1; Ext. P4 (acknowledgement of demand notice) was relied upon and was not rebutted effectively at trial.
- The complainant did not specifically challenge the inadequacy of the compensation awarded by the courts below.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Anilkumar v. Shammy, 2002 (3) K.L.T. 852 | Principles governing imposition of sentence in prosecutions under Section 138 of the N.I. Act. | The court referred to these principles in assessing whether incarceration was necessary and in deciding to modify sentence while ensuring adequate compensation to the complainant. |
| Suganthi Suresh Kumar v. Jagadeeshan, (2002) 2 SCC 420 | Affirmation that powers under Section 357(3) Cr.P.C. can be used by appellate or revisional courts, including prescribing a default sentence to enforce payment of compensation. | The court relied on this authority to justify its power to issue or modify directions under Section 357(3) Cr.P.C. and to impose a default sentence to secure payment of compensation. |
| K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 | Support for the proposition that appellate/revisional courts may invoke Section 357(3) Cr.P.C. to secure compensation with enforceable consequences. | Used in conjunction with Suganthi to establish the revisional court's jurisdiction to alter compensation directions and to prescribe default sentences where appropriate. |
| Mangilal v. State of M.P., 2004 SCC (Cri) 1085 | The accused is entitled to an opportunity of hearing before a direction under Section 357(3) Cr.P.C. is issued or modified to his prejudice. | The court accepted the principle but held that, in the present case, an adequate and real opportunity consistent with natural justice had already been afforded to the accused; hence no additional hearing was required before enhancing compensation or modifying directions. |
| Niranjan Lal v. Attar Singh, 1990 SCC (Cri) 607 | Principles regarding notice and the complainant's right to be heard on the question of sentence. | The court considered the contention based on this authority but concluded that reducing substantive imprisonment while enhancing compensation did not adversely affect the complainant and therefore did not require notice to the complainant in the facts of this case. |
Court's Reasoning and Analysis
The court proceeded through a fact-driven analysis based only on the evidence on record and binding principles of law.
- Credibility and evidence: The courts below had accepted the complainant (PW1) and rejected DWs 1 and 2 as inter se contradictory. The revisional court concurred with that assessment, noting the admitted signature on the cheque, the lack of dispute that the cheque was handed over, and the fact that the demand notice (Ext. P4) was duly received and acknowledged but not replied to. The late contention that Ext. P4 was not signed by the accused was not raised when the complainant was in the witness box, and the address on the notice was not disputed. On these factual findings, the court found no merit in overturning the conviction.
- Sentencing framework: The court acknowledged prior jurisprudence (including Anilkumar v. Shammy) on sentencing under Section 138 and accepted that, although incarceration is a permissible sentence, mitigating circumstances can justify avoiding or reducing incarceration provided the accused makes amends to the complainant.
- Power to modify compensation: Relying on Supreme Court authorities (Suganthi and K. Bhaskaran), the court held that appellate and revisional courts possess power under Section 357(3) Cr.P.C. to direct compensation with a default sentence to enforce payment. The court reasoned that because the magistrate could not impose a fine exceeding Rs. 5,000 in this summons-trial context, the revisional court must use Section 357(3) to secure just compensation where appropriate.
- Right to be heard / natural justice: The court examined the accused's reliance on Mangilal to claim a further opportunity to be heard before enhancing compensation. It concluded that the accused had been given a real and adequate opportunity to be heard on sentence and on the consequences of reducing imprisonment (i.e., that he would have to make amends). Thus, the requirement of natural justice was satisfied and no further hearing was necessary. The court also addressed the contention that the complainant should have notice (relying on Niranjan Lal) and found that the complainant would not be adversely affected by the reduction of substantive imprisonment accompanied by enhanced compensation, so additional notice to the complainant was unnecessary in the circumstances.
- Quantification of compensation: The court identified the cheque amount as the primary input in quantifying compensation in Section 138 prosecutions, with delay and prosecution expenses as relevant secondary inputs. It held that separate additional evidence to quantify compensation was not required where the court has already concluded the cheque was issued for discharge of a legally enforceable debt and the accused had opportunities during trial to place relevant material before the court.
- Proportional remedial approach: Balancing the interests, the court determined that the conviction should stand but the substantive sentence could be moderated provided the accused made adequate monetary compensation to the complainant. The court therefore exercised its revisional powers to modify the sentence and to impose an enhanced compensation amount enforceable by a default sentence.
- Administrative directions: The court directed execution steps — the accused to attend before the learned Magistrate on a specified date and permitted the Magistrate to invoke Section 446 Cr.P.C. against the accused and his sureties if the accused failed to appear.
Holding and Implications
Holding:
- The revision petition is allowed in part.
- The concurrent verdicts of guilty and conviction of the petitioner under Section 138 of the Negotiable Instruments Act are UPHELD.
- However, the sentence as imposed by the courts below is modified: in supersession of earlier sentences, the petitioner is sentenced to undergo imprisonment till rising of the court and to pay Rs. 2,50,000/- as compensation to the complainant; in default of payment, he shall undergo simple imprisonment for 60 days. If the amount is realised, it shall be released to the respondent/complainant.
Implications / Consequences:
- Direct effect on parties: The accused remains convicted. His substantive term of imprisonment is reduced to imprisonment till rising of court (to be executed by the Magistrate) conditioned upon payment of enhanced compensation of Rs. 2,50,000/-. Failure to pay will attract a default sentence of 60 days. The realised amount will be paid to the complainant.
- Execution and enforcement: The learned Magistrate is directed to execute the modified sentence; the accused and his sureties are ordered to produce him on a specified date, failing which the Magistrate may invoke Section 446 Cr.P.C. against the accused and sureties.
- Broader precedent: The court applied established Supreme Court principles (including the scope of Section 357(3) Cr.P.C and the accused's right to be heard) but did not state that it was establishing any new legal principle. The opinion focuses on application of existing law to the facts and does not purport to set novel precedent.
Note: This summary is strictly confined to the material contained in the provided opinion. No information not present in the opinion has been added.
1. This revision petition is directed against a concurrent verdict of guilty, conviction and sentence in a prosecution under Section 138 of the N.I Act.
2. The cheque is for an amount of Rs. 2,30,000/-. The signature in the cheque is admitted. That it was handed over by the accused to the complainant is also not disputed. While the complainant alleged that the cheque was handed over to him towards payment of amounts for articles supplied, the accused contended that it was handed over when a transaction in pepper was anticipated. In short, the accused contended that the cheque was issued not for the discharge of any legally enforceable debt or liability, but it was handed over as security for an intended transaction. The complainant examined himself as PW1 and proved Exts. P1 to P5. Accused examined DWs 1 and 2. DW2 is the accused himself and DW1, a friend of his - to speak about the alleged transaction.
3. Court below concurrently came to the conclusion that the evidence of PW1 can safely be accepted and that the evidence of DWs 1 and 2, which the courts found is inter se contradictory, is not worthy of acceptance. Courts drew assurance for this conclusion from the circumstance that the notice of demand, though duly received and acknowledged, was not responded to. It is in these circumstances that the courts below proceeded to pass the impugned judgments. While the trial court convicted the accused to undergo simple imprisonment for a period of six months, the appellate court reduced the substantive sentence of imprisonment to one of simple imprisonment for three months. Both courts directed payment of only an amount of Rs. 10,000/- as compensation. No satisfactory reasons are shown as to why only an amount of Rs. 10,000/- is granted as compensation when the cheque amount is Rs. 2,30,000/-. There is no plea even, of partial discharge. There is no contention that any decree has been passed by a civil court in respect of the alleged transaction.
4. Called upon to explain the nature of the challenge raised against the impugned verdict of guilty and conviction, the learned counsel for the petitioner reiterates the contention that there was no legally enforceable debt/liability. Less said about this contention, the better. I do not find any reason to disbelieve the evidence of PW1 or to accept the oral evidence of DWs 1 and 2 in preference to that tendered by PW1. The evidence of PW1 is further supported by the eloquent improbable conduct of the petitioner not responding to the notice of demand, which was duly acknowledged under Ext. P4. It is, of course, true that towards the later stages of the trial, the accused wanted to take up a contention that Ext. P4 acknowledgment is not signed by him. There is no contention even that the address shown in the notice is not correct. The contention that the signature in Ext. P4 is not his, was not even raised when the complainant was in the witness stand. In these circumstances, I do not find any merit in the challenge raised against the verdict of guilty and conviction. However, the learned counsel for the petitioner submits that if some time were given, an attempt shall be made to settle the matter and report composition to this court. At any rate he contends that the sentence imposed is excessive.
5. Though the idea of admitting a revision petition in the year 2004, to enable the parties to chase a settlement, which they have not been able to reach from the year 1996, when this prosecution was initially launched, does not at all appeal to me, I am satisfied that some time can be granted to the learned counsel for the petitioner before final orders are passed in the revision petition, to report composition.
6. Call this petition again on 14-07-2004 for final disposal or for considering application for composition, if any filed.
22-07-2004
7. After 14-7-2004, this matter has come up for hearing thrice. It is reported to the Court that there has been no settlement of the dispute between parties. No composition could be achieved. The-learned counsel for the petitioner now only submits that leniency may be shown on the question of sentence.
8. The cheque is for an amount of Rs. 2,30,000/-. The learned Magistrate had imposed a sentence of simple imprisonment for six months and had directed payment of an amount of Rs. 10,000/- as compensation. No default sentence was imposed. The learned Sessions Judge, in appeal, had modified the sentence imposed and reduced the same to simple imprisonment for three months. The learned Sessions Judge further observed that since no arguments are advanced regarding insufficiency of the compensation awarded, he is not persuaded to go into that question. The learned counsel for the petitioner, in these circumstances, prays that the substantive sentence of imprisonment may be avoided or suitably reduced.
9. I have already adverted to the principles governing imposition of sentence in a prosecution under Sec. 138 of the N.I Act in the decision reported in Anilkumar v. Shammy (2002 (3) K.L.T 852). While I am satisfied that there are no compelling circumstances in this case to justify the insistence that the petitioner must undergo incarceration in prison, I am certainly convinced that the petitioner who seeks leniency must do justice himself and must be willing to compensate the complainant reasonably for the loss suffered by him.
10. There can be no quarrel on the question of law now after the decisions of the Supreme Court reported in Suganthi Suresh Kumar v. Jagadeeshan (2002) 2 SCC 420) and K. Bhaskaran v. Sankaran Vaidhvan Balan ((1999) 7 SCC 510). The powers under Sec. 357(3) of the Cr. P.C can certainly be invoked by an appellate or revisional court and a default sentence can be prescribed to enforce compliance with such a direction for payment of compensation. Depending on the facts and circumstances of the case, the appellate/revisional court will be certainly justified in issuing a direction under Sec. 357 (3) of the Cr. P.C or modifying a direction already issued. The mere fact that the trial court or the appellate court had not invoked such powers or that such powers, though invoked, have not been justly, fairly and reasonably invoked cannot affect the power and jurisdiction of the revisional court to issue an appropriate direction under Sec. 357 (3) of the Cr. PC.
11. The learned counsel for the petitioner only contends that this is to a fit case where this revisional court while reducing the substantive sentence of imprisonment would be justified in issuing any revised direction under Sec. 357(3) of the Cr. P.C, which would adequately compensate the complainant. In these circumstances, while pleading strenuously that the impugned deterrent substantive sentence of imprisonment may be reduced, the learned counsel for the petitioner stoutly and vehemently contends that the direction for payment of compensation cannot and may not be enhanced.
12. I am unable to accept this contention at all. If this Court did not have the option to issue an appropriate direction under Sec. 357(3) of the Cr.P.C, this Court would certainly not be inclined to modify the impugned sentence. The trial having been held before the Court of the First Class Magistrate, fine exceeding Rs. 5,000/- cannot be imposed. Therefore, by resort to the powers to impose fine and the provisions of Sec. 357(1) of the Cr. P.C, just compensation cannot be directed to be paid.
13. The courts below have concurrently held, and I have concurred with the said conclusion, that the cheque was issued for the due discharge of a legally enforceable debt/liability. If that be so, permitting the accused to avoid a substantive sentence of imprisonment before he makes amends fully and adequately for the culpable indiscretion committed by him would certainly be unjust and improper. The mere fact that the complainant has not specifically preferred any challenge against the inadequacy of the compensation ordered to him, will not justify the courts being oblivious to such injustice. May be, the complainant was sure that in view of the substantive sentence of imprisonment the accused would seek settlement and composition at later stages of the proceedings. Therefore, the mere fact that the complainant had not challenged the inadequate direction for payment of compensation under Sec. 357(3) of the Cr. P.C cannot justify the courts ignoring that reality. I must hasten to note that there is no contention that the cheque amount has been paid or that any decree has been passed by the civil court for the cheque amount or any part of it.
14. The learned counsel for the petitioner then falls back on the decision reported in Mangilal v. State Of M.P. (2004 SCC (Cri) 1085). He submits that the accused is entitled for an opportunity to be heard before a direction under Sec. 357(3) of the Cr.P.C is issued or modified to his prejudice. There can be no dispute on that proposition and the Supreme Court has clearly recognized the right of the accused to be heard before he is visited with an order under Sec. 357(3) of the Cr.P.C That must certainly apply to upward modification of a direction under Sec. 357(3) of the Cr.P.C also.
15. But the opportunity contemplated is only one to satisfy the principles of natural justice. It is not an empty or ritualistic formality. In this case, the accused wants the substantive sentence of imprisonment to be reduced. He has been heard on that question. It has been conveyed to him tht if the substantive sentence of imprisonment were to be reduced, he will have to make amends. Thus, he has been given a real opportunity to make his submissions on the question of sentence including the question of reducing the substantive sentence of imprisonment and issue of an appropriate direction for payment of compensation. I am, therefore, perfectly satisfied that the accused has been given an opportunity in consonance with the principles of natural justice before the direction under Sec. 357(3) of the Cr. P.C is modified.
16. Looking at the problem from another angle also, I am satisfied that there is no infraction of the principles of natural justice. At any rate, I do not propose to impose a default sentence exceeding the substantive sentence of imprisonment already imposed. In these circumstances, no order to the prejudice of the accused is proposed to be passed. He has been given sufficient opportunity to be heard also. In these circumstances, infraction of the right of opportunity to be heard recognized in the dictum in Mangilal's case (cited supra) does not at all arise.
17. The nature of hearing contemplated before an order under Sec. 357 of the Cr. P.C is passed must certainly depend upon the facts and circumstances of each case. In a prosecution under Sec. 138 of the N.I Act, quantification of the amount of compensation does not pose any serious problem. The court while convicting the accused must have come to the conclusion that the cheque was issued for the due discharge of a legally enforceable debt/liability. While awarding the compensation, the cheque amount is the most vital input. The period of delay in securing justice is another relevant input. The possible expenses incurred for prosecution is yet another input. In these circumstances, I am certainly satisfied that no separate evidence is really necessary to ascertain the quantum of compensation. It having been found satisfactorily that the accused had issued the cheque for the discharge of a legally enforceable debt/liability, much of evidence is not required to prove his obligation to repay and his ability to repay.
18. The accused was facing trial in summons procedure and no separate opportunity to be head on the question of sentence is contemplated. An accused is expected to adduce all relevant evidence in the course of trial. Thus, opportunity to adduce evidence or relevant aspects has already been given to the accused. In these circumstances, I find no merit in the contention that the matter should be sent back to the court below for considering imposition of an appropriate direction under Sec. 357(3) of the Cr.P C.
19. The fact that such course has been adopted by the Supreme Court in Suganthi Suresh Kumar's case (cited supra) is no reason for this Court to concede the luxury of such a further opportunity to the accused. It must alertly be noted that the fact situation in the said case was totally different. In that case the Supreme Court was considering the sentence of imprisonment till rising of court and a fine of Rs. 5,000/- imposed on the accused. In this case, a substantive sentence of imprisonment for three months is already imposed. This Court is considering the reduction of the said substantive sentence of imprisonment.
20. It is contended, relying on the decision reported in Niranjan Lal v. Attar Singh (1990 SCC (Cri) 607), that in that event the revision will have to be admitted and notice ordered to the complainant as the complainant has also a right to be heard on the question of sentence. Here again, I note that principles of natural justice can come to the help of a person only when the court contemplates passing of an order adverse to his interest. By reducing the substantive sentence and by imposing an appropriate direction under Sec. 357(3) of the Cr.RC with a default sentence, interests of the complainant are not, in any way, affected adversely. In these circumstances, the contention raised by the accused that principles of natural justice would be violated in so far as the complainant is concerned cannot also be accepted.
21. I am, in these circumstances, satisfied that the challenge in this revision petition can succeed only to a limited extent. The substantive sentence of imprisonment can be modified and reduced, zealously ensuring at the same time that the complainant, who has been compelled to fight two rounds of legal battle by now and to wait from 1996, is adequately compensated.
22. In the result:
(a) This revision petition is allowed in part.
(b) The impugned concurrent verdict of guilty and conviction of the petitioner under Sec. 138 of the N.I Act are upheld.
(c) But the sentence imposed is modified and reduced. In supersession of the sentence imposed on the petitioner by the courts below, he is sentenced to undergo imprisonment till rising of the court and to ay an amount of Rs. 2,50,000/- (Rupees two lakhs fifty thousand only) as compensation and in default, to undergo simple imprisonment for a period of 60 days. If realised, the entire amount shall be released to the respondent/complainant.
23. In the nature of the relief granted in this revision petition, I am satisfied that it is not necessary to issue notice to the respondent/complainant.
24. The learned Magistrate shall take necessary steps to execute the modified sentence hereby imposed. The petitioner shall appear and his sureties shall produce him before the learned Magistrate at 11 a.m on 27-09-2004 for execution of the modified sentence. Needless to say, the learned Magistrate shall be at liberty to invoke his powers under Sec. 446 of the Cr.PC against the petitioner and his sureties if the petitioner does not appear before the learned Magistrate, as directed.
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