R.F. Nariman, J. - (1.) Leave granted.
(2.) The present appeals raise an interesting question as to whether when compensation is ordered as payable for an offence committed under Section 138 of the Negotiable Instruments Act, and in default thereof, a jail sentence is prescribed and undergone, is compensation still recoverable.
(3.) In the present case, the facts are that the complainant approached the Magistrate under Section 138 of the Negotiable Instruments Act in a transaction where the accused had borrowed a sum of Rs. 2.75 lakh from the complainant. When the complainant demanded the amount, the accused issued a cheque for the said amount which was returned as dishonoured due to insufficiency of funds. The requisite demand notice was sent by the complainant to the accused followed by the complaint. Ultimately, the accused was found guilty of the offence under Section 138, and was convicted, stating: "Considering the fact that this is an offence u/s 138 of the Negotiable Instruments Act I do not consider this to be a fit case to be proceeded under the Probation of Offenders Act. I am of the view that simple imprisonment for 4 months for the offence u/s 138 of the Negotiable Instruments Act would meet the ends of justice. The accused is further directed to pay a compensation of Rs. 2,75,000/- to the complainant u/s 357(3) of Cr.P.C. In default of payment of compensation, he shall undergo simple imprisonment for 1 month.";