Cheque bouncing case convict told to pay compensation even after serving one month imprisonment in default

The Bombay High Court at Goa, in Mohammad Rafic Vs. Mario H. Fernandes, has upheld an order of judicial magistrate to issue the warrant for attachment of flat of a ‘cheque bouncing’ case convict, if he fails to pay compensation of 4.25 lakh, evenafter he served imprisonment for one month. Justice, C. V. Bhadang, held ‘It is inconceivable that when a portion of the fine (which is part of sentence) is directed to be paid as compensation, no special reasons be recorded, however, where the only sentence imposed is in the nature of compensation, special reasons would be required to be recorded.’ The court further held “in view of the fact that the warrant is issued for recovery of compensation and that the Magistrate has considered the reply filed by the petitioner and recorded reasons, while passing the impugned order, I do not find that any case for interference is made out”

Mohammed Rafic was convicted under section 138 of Negotiable Instruments Act and he was sentenced to pay compensation of Rs.4,25,000/- and in default to undergo Simple Imprisonment for a period of one month. After the appellate court upheld the conviction and sentence, the accused spent one month in Jail. Thereafter, the complainant approached the court seeking issuance of warrant of attachment of a flat of the petitioner. The court ordered, the accused is directed to pay the compensation within 15 days from the date of this order, failing which warrant of attachment shall be issued in respect of the flat of the accused, details of which are given in the application. It is against this order, Rafic approached High Court of Bombay at Goa.

The petitioner before High Court prayed for quashing this order on the ground that the Magistrate has recorded no special reasons for issuing warrant of attachment after he served the sentence awarded in default. Moreover, it was submitted that ‘the respondent intentionally waited till the petitioner served the sentence in default and thereafter, moved an application for attachment, which is malafide. ‘

Considering the rival contentions, the High Court observed ‘It was not disputed during the course of the arguments at bar that merely because the accused undergoes the imprisonment in default of the payment of fine/ compensation, the liability to pay said fine or compensation is not wiped off.” The High Court examined the proviso to Section 421 which reads ‘Provided that, if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no Court shall issue such warrant unless, for special reasons to be recorded in writing, it considers it necessary so to do, or unless it has made an order for the payment of expenses or compensation out of the fine under section 357.”

The court held ‘A bare reading of the proviso would show that when there is an order for payment of compensation out of fine, the requirement of recording of special reasons is not applicable.’ After noticing that there is no order for payment of compensation out of fine, but only a direction to pay the compensation, the court held ‘in the present case, where the petitioner has been sentenced to pay compensation, the requirement of recording the special reasons cannot be imported. Any other interpretation is bound to lead to absurd results. It is inconceivable that when a portion of the fine (which is part of sentence) is directed to be paid as compensation, no special reasons be recorded, however, where the only sentence imposed is in the nature of compensation, special reasons would be required to be recorded. Such an interpretation cannot obviously be countenanced.’

The petitioner had placed reliance on DigambarBhavarthi Vs. Emperor AIR 1935 Bombay 160, Siddappa Vs. State of Mysore AIR 1957 Mysore 52 and Hari Singh Vs. State, AIR 1963 Rajasthan 80, but the court held that these decisions do not apply to this case in view of the fact that Section 421 of Code of Criminal Procedure,1973 is significantly different from the parallel provision of the old code which ‘is conspicuously silent as to the absence of necessity to record special reasons when, out of the fine amount, compensation is directed to be paid’

Read the Judgment here.