Page No.1 of 14 IN CRR-561-2015 2025:CGHC:9251 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR Criminal Revision No. 561 of 2015 Mahesh Kumar Sharma S/o Ramnand Sharma Aged About 53 Years R/o House No. 183, Jawahar Nagar, Durg, Police Station Mohan Nagar, Durg, Tahsil And District Durg Chhattisgarh, Chhattisgarh ... Applicant Accused Versus Rajkumar Sharma S/o Late Mohanlal Sharma Aged About 58 Years R/o New Deepak Nagar, Ram Mandir, Behind Hotel Vaani, Police Station Mohan Nagar, Durg, Tahsil And District Durg Chhattisgarh, Chhattisgarh ... Non-applicant Complainant [Cause-title taken from Case Information System (CIS)] --------------------------------------------------------------------------------- For Applicant : Ms. Fauzia Mirza, Senior Advocate with Mr. Shamsuddin Mirza, Advocate For Non-applicant : Mr. Priyanka Rai, Advocate Amicus Curiae : Mr. Rahul Tamaskar, Advocate --------------------------------------------------------------------------------- Single Bench: Hon'ble Shri Justice Sanjay K. Agrawal Order on Board 21.02.2025 1. The short question involved in this criminal revision filed under Section 397 read with Section 401 of the Code of Criminal Procedure (for short the “CrPC”) is: “whether the appellate Court is justified in SAIFAN KHAN Digitally signed by SAIFAN KHAN Date: 2025.03.03 10:45:24 +0530 Page No.2 of 14 IN CRR-561-2015 exercising power conferred under Section 357(3) of CrPC in a case where the fine forms part of the sentence and the same is duly awarded by the Criminal Court ?” 2. The aforesaid question of law arising for consideration on the following factual backdrop: 2.1 The applicant/accused obtained loan of Rs.1,60,000/- from the non-applicant/complainant and, against which, he issued Cheque No.202836 dated 10.05.2006 to the non-applicant/complainant on 25.04.2006. The said cheque stood dishonored on 05.05.2006 due to insufficiency of funds and, on account of which, the non-applicant/complainant firstly served legal notice to the applicant/accused on 25.05.2006 and, ultimately, he filed criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short the “NI Act”) before the jurisdictional criminal Court on 28.06.2006. 2.2. The criminal Court vide its judgment and order dated 28.06.2013 convicted the applicant/accused for offence under Section 138 of NI Act and sentenced him to undergo simple imprisonment for 06 months with fine of Rs.5,000/- and, in default of payment of fine amount, sentenced to undergo additional simple imprisonment for 01 month. Feeling aggrieved, the applicant/accused preferred appeal against the judgment of Page No.3 of 14 IN CRR-561-2015 conviction and order of sentence dated 28.06.2013 before the appellate Court under Section 386 of CrPC. The appellate Court, vide impugned order dated 02.05.2015 (Annexure-A/1), while affirming the conviction of the applicant/accused under Section 138 of the NI Act, set aside the sentence of 06 months’ SI and fine of Rs.5,000/- alongwith default stipulation, as awarded to the applicant/accused by the criminal Court, and proceeded to sentence him till the rising of the Court with the direction to pay compensation to the tune of Rs.2,56,000/- (i.e. the amount of cheque alongwith interest) to the non-applicant/complainant within 60 days and, in case of failure to pay the said amount, sentenced him to undergo additional 06 months’ SI. Assailing the legality, validity and correctness of said impugned order dated 02.05.2015 (Annexure-A/1), the applicant/accused has filed this criminal revision before this Court challenging the impugned order to the extent of direction to pay compensation to the non- applicant/complainant being without jurisdiction and without authority of law. 3. Ms. Fauzia Mirza, learned Senior Counsel appearing for the applicant/accused submits that in an appeal preferred by the applicant/accused against the judgment of conviction and order of sentence, passed by the criminal Court, the learned appellate Court have committed grave legal error while directing him to pay Page No.4 of 14 IN CRR-561-2015 enhanced amount of compensation to the non-applicant/complainant for the reason that Section 386(b)(iii) of CrPC only empowers the appellate Court to alter the nature or the extent, or the nature and extent of the sentence, but not to enhance the sentence. She vehemently argued that by virtue of sub-section (3) of Section 357 of CrPC, though the appellate Court can exercise its power in awarding compensation, but since in the present case fine of Rs.5,000/- had already been imposed upon the applicant/accused by the criminal Court, the appellate Court could not have exercised powers conferred under Section 357(3) read with 386(b)(iii) of CrPC. As such, the impugned order is liable to be set aside. 4. Mr. Priyanka Rai, learned counsel appearing for the non- applicant/complainant would support the impugned order and submits that the appellate Court has set aside the order awarding fine and, in absence of fine, considering the provisions contained under Section 138 of the NI Act and further considering the object which is sought to be achieved in cheque dishonorned cases to payback/refund the amount of cheque, in the interest of justice, directed the applicant/accused to pay the amount of cheque with interest to the non-applicant, which is strictly in accordance with law. Therefore, the present revision is liable to be dismissed. 5. Mr. Rahul Tamaskar, learned amicus curiae would also Page No.5 of 14 IN CRR-561-2015 support the proposition that once the fine has been awarded by the criminal Court and the complainant has chosen not to challenge the same by filing an appeal seeking compensation or for enhancement of the said fine, in an appeal preferred by the accused against his conviction and sentence, the appellate Court, in view of express provision contained in Section 386(b)(iii) of CrPC, could not have awarded compensation to the complainant because the compensation has to be awarded out of the fine amount. Therefore, the impugned order dated 02.05.2015 (Annexure-A/1) is liable to be set aside. 6. I have heard learned counsel for the parties, considered their rival submissions made herein above and went through the record with utmost circumspection. 7. It is not in dispute that the criminal Court while imposing sentence for imprisonment for 06 months to the applicant has further sentenced to fine of Rs.5,000/- and no compensation was awarded out of the fine amount and it is only the accused/applicant herein, who choose to prefer the appeal questioning his sentence of imprisonment and fine, whereas the complainant did not choose to prefer any appeal seeking enhancement of the fine sentence and to award compensation out of the said fine sentence. 8. In order to answer the plea raised at the bar, it would be first Page No.6 of 14 IN CRR-561-2015 relevant here to notice Section 138 of the NI Act, which reads as under: “138. Dishonour of cheque for insufficiency, etc., of funds in the account.— Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless— (a)the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b)the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c)the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of Page No.7 of 14 IN CRR-561-2015 the said notice. Explanation.—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.” 9. By virtue of Section 138 of the NI Act, the criminal Court is empowered to award twice the amount of cheque in case the accused is found guilty. Whereas, the compensation can be paid from out of the fine by applying Section 357 of CrPC, which reads as under: “357. Order to pay compensation.- (1) When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment order the whole or any part of the fine recovered to be applied— (a) in defraying the expenses properly incurred in the prosecution; (b) in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the Court, recoverable by such person in a Civil Court; (c) when any person is convicted of any offence for having caused the death of another person or of having abetted the commission of such an offence, in paying compensation to the persons who are, under the Fatal Accidents Act, 1855 (13 of 1855), entitled to recover damages from the person sentenced for the loss resulting to them from such death; (d) when any person is convicted of any offence which includes theft, criminal misappropriation, criminal breach of trust, or cheating, or of having dishonestly received or retained, or of having voluntarily assisted in disposing of, stolen property Page No.8 of 14 IN CRR-561-2015 knowing or having reason to believe the same to be stolen in compensating any bona fide purchaser of such property for the loss of the same if such property is restored to the possession of the person entitled thereto. (2) If the fine is imposed in a case which is subject to appeal, no such payment shall be made before the period allowed for presenting the appeal has elapsed, or if an appeal be presented, before the decision of the appeal. (3) When a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment order the accused person to pay, by way of compensation such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced. (4)An order under this section may also be made by an Appellate Court or by the High Court or Court of Session when exercising its powers of revision. (5) At the time of awarding compensation in any subsequent civil suit relating to the same matter, the Court shall take into account any sum paid or recovered as compensation under this section.” 10. A careful perusal of sub-section (3) of Section 357 CrPC would show that when a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment/order the accused person to pay, by way of compensation such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced. Sub-section (1) of Section 357 of CrPC empowers the criminal Court to order part or whole of the fine amount pay to the person who sustained loss Page No.9 of 14 IN CRR-561-2015 and similar power has been conferred upon the appellate Court or the High Court or the Court of Sessions while exercising its power of revision by virtue of sub-section (4) of Section 357 of CrPC. However, the power of the appellate Court under Sections 357(4) of CrPC is undoubtedly subject to Section 386(b)(iii) of CrPC, which states as under: “386. Powers of the Appellate Court- After perusing such record and hearing the appellant or his pleader, if he appears, and the Public Prosecutor, if he appears, and in case of an appeal under section 377 or section 378, the accused, if he appears, the Appellate Court may, if it considers that there is no sufficient ground for interfering, dismiss the appeal, or may (a) xxxx (b) in an appeal from a conviction (i) xxx (ii) xxx (iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same;” 11. As such, it is clear from the above-quoted provision that the appellate Court, in exercise of power under Section 386(b)(iii) of CrPC, with or without altering the finding, can alter the nature or the extent, or the nature and extent, of the sentence, but cannot enhance the same. 12. In this regard, the decision of the Supreme Court in the matter of Sivasuriyan v. Thangavelu 1 may be noticed herein 1 (2004) 13 SCC 795 Page No.10 of 14 IN CRR-561-2015 profitably, in which, their Lordships while considering the question whether the Court can direct payment of compensation in exercise of powers under sub-section (3) of Section 357 of CrPC in a case where the fine already forms a part of sentence, have held that power under Section 357(3) of CrPC can only be exercised when Court imposes the sentence, which fine doesn’t form the part of it and observed in Para-04 & 05 as under: “4. In view of the submission made, the only question that arises for consideration is whether the Court can direct payment of compensation in exercise of power under Sub-section (3) of Section 357 in a case where fine already forms a part of the sentence. Apart from Sub-section (3) of Section 357 there is no other provision under the code whereunder the Court can exercise such power. " Sub-section (3) of Section 357: when a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment, order the accused person to pay, by way of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced." 5. On a plain reading of the aforesaid provision, it is crystal clear that the power can be exercised only when the court imposes sentence by which fine does not form a part. In the case in hand, a Court having sentenced to imprisonment, as also fine, the power under Sub-section (3) of Section 357 could not have been exercised. In that view of the matter, the impugned direction of the High Court directing payment of compensation to the tune of Rs. one Lakh by the appellant is set aside. ” Page No.11 of 14 IN CRR-561-2015 13. The Supreme Court in the matter of R. Vijayan v. Baby 2 by relying upon its earlier decisions in State of Punjab v. Gurmej Singh 3 and Sivasuriyan (supra) has held where the sentence imposed doesn’t include fine and where the sentence only relates to the imprisonment, the Court while passing judgment can direct the accused to pay by way of compensation such amount, as specified in the order, who has already suffered loss or injury by reason of the act, for which, the accused is so sentenced and observed in Para-09 as under: “9. It is evident from Sub-Section (3) of section 357 of the Code, that where the sentence imposed does not include a fine, that is, where the sentence relates to only imprisonment, the court, when passing judgment, can direct the accused to pay, by way of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced. The reason for this is obvious. Sub-section (1) of section 357 provides that where the court imposes a sentence of fine or a sentence of which fine forms a part, the Court may direct the fine amount to be applied in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the court, recoverable by such person in a Civil Court. Thus, if compensation could be paid from out of the fine, there is no need to award separate compensation. Only where the sentence does not include fine but only imprisonment and the court finds that the person who has suffered any loss or injury by reason of the act of the accused person, 2 (2012) 1 SCC 260 3 (2002) 6 SCC 663 Page No.12 of 14 IN CRR-561-2015 requires to be compensated, it is permitted to award compensation under compensation under section 357(3).” 14. Coming to the facts of the present case in light of principles of law laid down by their Lordships of the Supreme Court in above stated judgments (supra), it is quite vivid that in the instant case the criminal Court while convicting the applicant/accused for offence under Section 138 of the NI Act, not only sentenced him to undergo simple imprisonment for 06 months, but further sentenced to fine of Rs.5,000/-. However, the criminal Court while passing the judgment of conviction and order sentence of the applicant/accused, did not direct to pay any kind of compensation to the non-applicant/complainant out of fine amount, therefore, it was not open to the appellate Court, in view of the express bar contained under Section 357(3) of CrPC to award compensation for the reason that compensation can only be awarded where the sentence imposed does not include the fine, which is not the case here. As such, award of compensation by the appellate Court, in the present case, is clearly in the teeth of express bar contained under Section 357(3) read with Section 386(b)(iii) of CrPC. The appellate Court did not notice said aspect of the matter and considering the relationship between the parties to be very close and further considering the transaction between the parties, proceed to award the compensation. Not only this, in the matter of Page No.13 of 14 IN CRR-561-2015 Kalamani Tex and another v. P. Balasubramanian 4 in an appeal by accused, their Lordships of the Supreme Court while considering the plea of the respondent therein seeking compensation had categorically held in Para-20 by accepting the verdict of the High Court that by not preferring appeal, the claim of compensation stands impliedly overturned. 15. Since, in the present case, the criminal court has consciously imposed fine of Rs.5,000/- and no compensation was ordered to be paid, in an appeal preferred by the applicant/accused herein, in view of provisions contained under Section 357(3) read with Section 386(b)(iii) of CrPC, the appellate Court has no jurisdiction to enhance the fine sentence ordering compensation, in absence of duly constituted appeal by the non- applicant/complainant because the compensation is not an independent component under Section 138 of the NI Act which is a special Act and it should be part of the fine amount and fine should be part of sentence. As such, the order of the appellate Court dated 02.05.2015 (Annexure-A/1) ordering compensation to the tune of Rs.2,56,000/- payable by the applicant/accused to the non-applicant/complainant is without jurisdiction and without authority of law and, therefore, liable to be set aside. 16. Resultantly, in view of foregoing discussion, the impugned 4 (2021) 5 SCC 283 Page No.14 of 14 IN CRR-561-2015 order dated 02.05.2015 (Annexure-A/1), passed by the appellate Court, to the extent of directing compensation to the tune of Rs.2,56,000/- payable by the applicant/accused to the non- applicant/complainant is hereby set aside. However, this will not bar the non-applicant/complainant to recover the said amount from the applicant/accused in accordance with law. 17. Consequently, this criminal revision is allowed to the extent indicated hereinabove. 18. While parting with the record, I must place on record the appreciation for assistance rendered by Mr. Rahul Tamaskar, learned amicus curiae, who not only argued the case at length on short notice but has also brought relevant facts and legal position to my notice. Sd/- (Sanjay K. Agrawal) Judge s@if