NI Act: An Order To Undergo Imprisonment In Default To Pay Compensation Appealable: Calcutta HC [Read Judgment]

The Calcutta High Court, in PS Mitra vs Manor Travels Private Limited, has held that a judgment and order of conviction and sentence of imprisonment till the rising of the Court and an order of compensation imposed under Section 357(3) of the Code of Criminal Procedure with a direction to undergo imprisonment in default of payment of such compensation is appealable.

The petitioner was convicted for commission of offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to suffer imprisonment till the rising of the Court and directed to pay compensation to the tune of Rs.4 lakhs within one month in default to suffer simple imprisonment for two years.

Initially, the petitioner preferred a revision petition before the Additional Sessions Judge, Fast Track Court, Calcutta and thereafter made an application for converting such revision into an appeal on the premise that the imprisonment for two years prescribed in default of payment of compensation is appealable under Section 374(3) read with Section 376 of the Code of Criminal Procedure. The Sessions Court dismissed the petition.

The High Court has examined the question ‘whether a direction to undergo imprisonment in default to pay compensation in terms of Section 64 I.P.C. shall render the order of compensation appealable or not’.

The opposite party contended that any direction for imprisonment in default of payment of fine or compensation cannot render the sentence appealable in view of proviso to Section 376 of the Code of Criminal Procedure.

It is laid down in the proviso to section 376 Cr.P.C. that sentence of fine not exceeding the minimum limit shall not become appealable merely on the score imprisonment is prescribed in default of payment of such fine. Compensation per se is not appealable at the behest of the convict under the aforesaid provision unless it forms a part of the fine under Section 357(1) Cr.P.C. and is appealable as such. However, inadequacy of compensation has been made appealable at the behest of the victim under the proviso to Section 372 Cr.P.C. The Court has accepted this proposition.

But Justice Joymalya Baggi, observed that Supreme Court in Vijayan Vs. Sadanandan held that ‘compensation’ shall be deemed to be a ‘fine’ for the purposes of Section 64 of I.P.C. and in default of payment of such compensation the Court shall have the power to impose imprisonment upon the defaulter.

“Such purposive interpretation, therefore, creates a legal fiction and treats ‘compensation’ as ‘fine’ for the purposes of Section 64 of I.P.C. and thereby prescribes a procedure established by law to deprive a defaulter of his liberty in case of failure to pay such compensation”.

The Court held that, any interpretative exercise which deems an ‘award of compensation’ as ‘sentence of fine’ for the purposes of Section 64 of I.P.C. and empowers the Court to impose imprisonment in default of payment of such compensation must also bring within the sweep of such legal fiction the appellate remedy available under Section 374 read with Section 376 of the Code of Criminal Procedure against the ‘sentence of fine’ and hold that ‘compensation’ in default of payment of which imprisonment may be imposed shall be deemed to be a ‘sentence of fine’ for the purposes of such appellate remedy.

Allowing the prayer the High Court held as follows;

“If by judicial interpretation, a procedure to impose imprisonment in default of payment of compensation is acknowledged by treating ‘compensation’ as ‘fine’, the remedy of appeal available against such ‘sentence of fine’ must also be extended to ‘orders of compensation’. To interpret otherwise would create an inequitable and unfair situation to the prejudice of an accused by permitting the court to impose imprisonment in default of payment of compensation by treating it as a fine on the one hand but not permitting him to appeal against such order of compensation, on the other hand, since it is not a ‘sentence of fine’.

Read the Judgment here.