[Cheque Dishonour] Prioritize Compensation In Sentencing U/S 138: J&K High Court Reiterates Compensatory Aspect Of Negotiable Instruments Act

A bench comprising Justice M A Chowdhary stressed that for the compensatory aspect to be duly considered, the sentence imposed should align with the cheque amount, if not exceed it. This ensures that any fine imposed can be utilized to compensate the complainant, as per the provisions of Section 357 of the Criminal Procedure Code (CrPC) 1973, the bench underscored.

Background:

The case revolved around a complaint filed under Section 138 of the N.I Act. Following a trial, the accused, Kuldeep Singh, was acquitted, prompting the complainant to appeal the decision. The High Court, in its judgment, overturned the trial court's verdict, convicting Kuldeep Singh and imposing a fine of Rs. 1 lakh.

However, the trial court directed the fine to be deposited in the government treasury instead of being paid to the complainant which prompted the appellant to seek clarification from the High Court.

The appellant contended that the trial court's decision to remit the fine amount to the Government Exchequer, rather than compensating the complainant, was erroneous. Emphasizing the personal nature of the dispute between the parties, the appellant argued that the lack of compensation rendered the legal process futile.

Observations of the Court:

Acknowledging that a dispute under Section 138 of N.I Act is purely of a personal nature between the parties as the injury was alleged to have been caused to the complainant and does not relate to the State the court observed,

“In the considered opinion of this Court, the complainant is certainly required to be compensated having lost his money, in case he is not compensated and the fine imposed is remitted to the Government Treasury, he shall be left high and dry”.

Justice Chowdhary stressed the compensatory aspect of remedy in Section 138 cases and emphasized the duty of criminal courts to consider compensation for the complainant.

In order to fortify the said position the court referenced Yasir Amin Khan vs. Abdul Rashid Ganie (2021) wherein it was recorded,

“That while imposing sentence under Section 138 of N.I Act, the Court should exercise its discretion, in granting compensation while imposing fine by having regard to section 357(3) of CrPC and give priority to the compensatory aspect of remedy”.

Ruling in favor of the appellant Justice Chowdhary clarified the High Court's previous judgment by directing the trial court to pay the entire fine amount of Rs. 1 lakh as compensation to the complainant. The court further directed the trial court to withdraw the amount from the government treasury if it had already been deposited there.

Case Title: Choudhary Piara Singh Vs Kuldeep Singh

Citation: 2024 LiveLaw (JKL) 33

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