Cheque Bounce: ‘Compensation’ Recoverable From Accused Even If ‘Default Sentence’ Has Been Suffered: SC [Read Judgment]

 ‘No special reasons need to be recorded for issuing distress warrant’

The Supreme Court, has held that compensation ordered by the court would be recoverable even though a default sentence has been suffered.

A bench comprising Justice RF Nariman and Justice Navin Sinha upheld a Kerala High Court decision that had approved the order of magistrate by invoking Section 421 CrPC issuing a distress warrant against the accused for realising compensation ordered in a cheque bounce case but for different reasoning.

The order of the high court was assailed before the apex court on the ground that compensation under Section 357(3) would be covered by the proviso if the accused has undergone the default sentence awarded and special reasons in writing would have to be recorded before action under Section 421 can be initiated.

The court observed that the objective of the legal fiction created by Section 431 is to extend for the purpose of recovery of compensation until such recovery is completed - and this would not only include Section 421 of the CrPC, but also Section 70 of the Penal Code.

Section 431 states that any money other than a fine, the method of recovery of which is not expressly provided for, shall be recoverable as if it was a fine.

The court also observed that ‘any money other than a fine’ would include compensation payable under Section 357(3) CrPC.

The court also said there is no necessity for recording any special reasons because Section 421(1) proviso contains the disjunctive “or”, that the proviso which mandates recording of special reasons, should not be a bar to the issue of a warrant for levy of fine, even when a sentence of imprisonment for default has been fully undergone.

“The last part inserted into the proviso to Section 421(1) as a result of this recommendation of the Law Commission is a category by itself which applies to compensation payable out of a fine under Section 357(1) and, by applying the fiction contained in Section 431, to compensation payable under Section 357(3),” the court observed.