KUMARANversusSTATE OF KERALA & ANR.

                            [2017] 3 S.C.R. 962


A                              KUMARAN
                                     v.
                       STATE OF KERALA & ANR.
                  (CriminalAppeal Nos. 896-897 of 2017)
.B
                               MAYOS,2017
               [R. F. NARIMAN AND NAVIN SINHA, JJ.]
            Code of Criminal Procedure, 1973 - s.431 - Compensation -
   When compensation is ordered as payable for an offence committed
 C i1/s.J38 of the Negotiable Instruments Act, and in default thereof. a
   jail sentence is prescribed and is undergone, whether compensation
   is still recoverable - Held: The fiction contained in s.431 must be
   extended logically until its object is accomplished - The object of
   the legal fiction created by s.431 is to extend for the purpose of
   recovery of compensation until such recovery is completed and this
 D would necessarily include not only s.421 of the C1:P.C. but also
   s. 70 of the Penal Code, a companion criminal statute - Thus, despite
    the fact that the' default sentence is undergone, compensation is
    still recoverable - Negotiable Instruments Act, 1881 - s.138 - Code
    of Criminal Procedure, 1898 - s.386.
 E        Interpretation of statutes - Leg_al fiction - Deeming
   provision - A legal fiction is not to be extended beyond the purpose
   for which it is created or beyond the language of the section by
   which it is created - Howeve1; once the purpose of the legal fiction
   is ascertained, full effect must be given, and it should be carried to
 F its logical conclusion - Code of Criminal Procedure, 1973 - s.431.
           Dismissing the· appeals, the Court
         HELD: 1. The last part of the proviso to sub-section (1) of
   Section 421, Cr.P.C., namely, "or unless it has made an order for
   the payment of expenses or compensation out of the fine under
 G Section 357" has been added to the proviso for the first time.
   This was done pursuant to the 41" Law Commission Report. The
   third important provision in the Code of Criminal Procedure is
   Section 431. From this provision, it is clear that a deeming fiction
   is enacted, viz., that any money other than a fine, (which would
   include compensation payable under Section 357(3} Cr.P.C.} the
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                                  962
          KUMARAN v. STATE OF KERALA & ANR.                         • 963


method of recovery of which is not expressly provided for, shall A
be recoverable as if it was a fine. [Paras 10, 11)(971-B-C]
       2. Section 53 of the Indian Penal Code speaks of
punishment to which offenders are liable under the provisions of
the Code. Fine is one of them, but compensation payable is not.
Also contained in Chapter III of the Penal Code which is headed B
"OF PUNISHMENTS" are the provisions of Sections 64 to 70.
Section 64 recognises that it shall be competent to the Court
which sentences an offender to state that, in default of payment
of a fine, the offender shall suffer imprisonment. Section 65 sets
the limit to which such imprisonment can go. [Paras 12, 13)(971-
F-H]                                                               C
       3. Compensation under the old Cr.P.C. was always
recoverable as a part of fine, and even after default imprisonment
having been undergone, a fine could still be collected in the
manner provided by Section 386. The requirement of special
reasons was introduced by the amending Act of 1923. The special         D
reasons outlined in the Bombay High Court judgment of 1935 as
well as in the Mysore High Court judgment of 1964 would show
that it is enough that sufficient reasons or some good reason be
given in order that fine be realized even after default
imprisonment has been undergone. The Courts held that despite           E
the fact that the reach of Section 386(1) proviso was only qua
warrants issued after default imprisonment was undergone, yet,
the principle of the proviso to Section 386(1) would apply even
to warrants issued before default imprisonment was undergone.
The law, therefore, till the enactment of the 1973 Code, made it
clear that Section 386, and Section 70 IPC read together would          F
lead to the conclusion that fines were recoverable even after
default imprisonment was undergone, provided there were special
reasons for recovery of the same. With the Code of 1973 came
an interesting change. Sub-section (3) was added to Section 357,
which was an entirely new provision making it clear that the Court      G
 may, when passing judgment, order the accused to pay by way of
 compensation such amount as may be specified in the order to
 the pers.in who has suffered loss or injury by reason of the act for
 which the accused person has been sentenced. This is provided
 that the Court imposes a sentence of which fine does not form a
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964.         SUPREME COURT REPORTS                    (2017) 3 S.C.R.


A part. Another important change was made in Section 421(1). The
  proviso to the said sub-section was altered whereby the word
  "or unless it made an order for the payment of expenses or
  compensation out of the fine under Section 357" was added to
  the proviso which was contained in the earlier Section 386(1)
B and continued in Section 421(1) [Paras 23, 24)(976-F-G; 977-A-
  C, F-G]
         4. The deeming fiction of Section 431 Cr.P.C. extends not
  only to Section 421, but also to Section 64 of the Indian Penal
  Code. This being the case, Section 70 IPC, which is the last in
  the group of Sections dealing with sentence of imprisonment for
C non-payment of fine must also be included as applying directly to
  compensation under Section 357(3) as~well. The position in law
  now becomes clear. The deeming provision in Section 431 will
  apply to Section 421(1) as well, despite the fact that the last part
  of the proviso to Section 421(1) makes a reference only to an
D order for payment of expenses or compensation out of a fine,
  which would necessarily refer only to Section 357(1) and not
  357(3). Despite this being so, so long as compensation has _been
  directed to be paid, albeit under Section 357(3), Section 431,
  Secti.m 70 IPC and Section 421(1) proviso would make it clear
  that by a legal fiction, even though a default sentence has been
E suffered, yet, compensation would be recoverable in the manner
  provided under Section 421(1). This would, however, be without
  the necessity for recording any special reasons. This is because
  Section 421(1) proviso contains the disjunctive "or" following
  the recommendation of the Law Commission, that the proviso to
F old Section 386(1) should not be a bar to the issue of a warrant
  for levy of fine, even when a sentence of imprisonment for default
  has been fully undergone. The last part inserted into the proviso
  to Section 421(1) as a result of this recommendation of the Law
  Commission is a category by itself which applies to compensation
  payable out of a fine under Section 357(1) and, by applying the
G fiction contained in Section 431, to compensation payable under
  Section 357(3). [Para 27)[979-A-E]
          Vijayan v. Sadanandan K. [2009] 7 SCR 463 : (2009)
          6 SCC 652; R. Mohan v. A.K. Vtjaya Kumar [2012) 7
          SCR 1: (2012) 8 SCC 721 - relied on.
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   •
           KUMARAN v. STATE OF KERALA & ANR.                       965


      5. As is well known, a legal fiction is not to be extended A
beyond the purpose for which it is created or beyond the language
of the section by which it is created. However, once the purpose
of the legal fiction is ascertained, full effect must be given, and it
should be carried to its logical conclusion. [Para 28)(979-F-G]
       Ashok Leyland Limited v. State of Tamil Nadu [2004) 1        B
       SCR 306 : (2004) 3 SCC 1; Prakash H. Jain v. Marie
       Fernandes [2003) 3 Suppl. SCR 1011 : (2003) 8 SCC
       431 - relied on.
       Digamber Kashinath Bhavarthi v. Emperor AIR 1935
       Born 160: ILR LIX Born 350; Brahameshwar Prasad              c
       Sinha v. State of Bihar 1983 Cri LJ 8; Parasnath v.
       State AIR 1969 All 116; Saji Kumar v.. Soman Pillai
       2006 (3)KLT 679; Kirpa Ram v. Emperor AIR 1914
       Lahore 539; Collector of Broach and Panchmaha/s v.
       Ochhav/a/ Bhika/al AIR 1941 Born 158; State v.
       Krishna Pillai AIR 1953 Travancore-Cochin 233; K.            D
       Vemmana Shenoy v. Collector of South Kanara AIR
       1964 Mys. 64 - referred to.
       East End Dwelling Co. Ltd. v. Finsbury Borough Council
       1951 (2) All ER 587 - referred to.
                                                                    E
                          Case Law Reference
       AIR 1935 Born 160        referred to           Para 15
       1983 Cri LJ 8             referred to          Para 16
       AIR 1969 All 116          referred to          Para 17
                                                                    F
       2006 (3)KLT 679           referred to          Para 18
       AIR 1914 Lahore 539 referred to                Para 19 .
       AIR 1941 Born 158         referred to          Para 20
       AIR 1953 T-C 233          referred to          Para 21       G
       AIR 1964 Mys. 64          referred to          Para 22
       [2009] 7 SCR 463          relied on            Para 25
        [2012] 7 SCR 1           relied on            Para 26
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966            SUPREME COURT REPORTS                          [2017] 3 S.C.R.


A           (2003) 3 Suppl. SCR 1011            relied on           Para 28
            1951 (2) All ER 587                 referred to         Para 28
            [2004) 1 SCR 306                    relied on           Para 29
        CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
B Nos. 896-897 of2017.
           From the Judgment and Order dated 08.08.2012 of the High Court
      ofKerala at Ernakulam in Cr. Rev. Petition No. 2397 and 2398'Jf2011.
            Siddhartha Dave, Saj ith P, Ad vs. for the Appellant.
            C. K. Sasi, Adv. for the Respondents.
c
            The Judgment of the Court was delivered by
            R. F. NARIMAN, J. I. Leave granted.
          2. The present appeals raise an interesting question as to •vhether
  when compensation is ordered as payable for an offence committed
D 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
E 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
F 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
G           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) ofCr.P.C. In default
            of payment of compensation, he shall undergo simple imprisonment
            for l month."
H
           KUMARAN v. STATE OF KERALA & ANR.                                 967
                  [R. F. NARIMAN, J.]

        4. The accused challenged the aforesaid judgment before the Court A
of Sessions, and the Appellate Court, by an order dated 27'h April, 2006,
confirmed the conviction, but reduced the sentence to imprisonment till
rising of the Court. The order to pay compensation with the default
clause was, however, sustained. The accused underwent imprisonment
till the rising of the Court and also underwent the default sentence for B
non-payment of compensation. The second respondent filed CMP
No.2018 of2008 before the learned Judicial Magistrate under Section
421 of the Criminal Procedure Code for realising compensation by issuing
a distress warrant against the accused. This CMP was allowed on l 91h
July, 2008, and a distress warrant for the realisation of compensation
was issued. A recalling petition filed by the accused was dismissed on C
29•h March, 2011. The High Court, by the impugned judgment dated 81h
August, 2012, held that despite the fact that the default sentence was
undergone, yet, under the provisions of the Code of Criminal Procedure,
compensation was recoverable, and upheld the orders ofthe learned
Judicial Magistrate.
                                                                          D
        5. Shri Siddharth Dave, learned counsel appearing on behalf of
the Appellant, has argued before us that an accused who is directed to
pay fine, or undergo sentence of which fine forms a part, ancl from
which compensation is to be paid, then a com1 would proceed against
the accused in the manner provided under Section 421 even though he
may have undergone the default sentence awarded to him. However, if E
the sentence is of fine or sentence of which fine forms a part and there
is no order of payment of compensation from the fine imposed, the court
would have to record special reasons in writing before proceeding against
the accused under Section 421. Likewise, compensation under Section
357(3) would be covered by the proviso ifthe accused has undergone F
the default sentence awarded and special reasons in writing would have
to be recorded before action under Section 421 can be initiated. As in
the present case, at the time of issuance of warrant, the Magistrate did
not record special reasons in writing for proceeding against the accused
person, the Division Bench judgment ought to be set aside.
                                                                             G
       6. Shri C.K. Sasi, learned counsel for the Respondent; has repelled
the above submissions. According to the learned counsel, by operation
of the deeming fiction contained in Section 431 Cr.P.C. compensation
can be realized even if the accused had undergone the default sentence.
The exception provided in the proviso to Section 421 is to achieve the
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                SUPREME COURT REPORTS                           [2017) 3 S.C.R.


A . object of payment of compensation to the victim of the 0ffence.
    According to learned counsel, the purpose of Section 421 being victim
    compensation, the provision must be liberally construed to meet the ends
    ofjustice. This being so, the Division Bench judgment cannot be faulted
    on any score.
B ..          7. Having heard learned counsel for the parties, it is important to
       set out all the relevant statutory provisions. Section 357 Cr.P.C. reads
       as under:
             "357. Order to pay compensation. (I) When a Court imposes
             a sentence of fine or a sentence (including a sentence of death)
c            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
D (;          of the Comi, 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! 855), entitled to
E ~           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 ofhaving dishonestly received or retained, or of having
 F            voluntarily assisted in disposing of, stolen property knowing or
              having reason to believe the same to be stolen, in comprnsating
              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.
 G;           (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
 H
            KUMARAN v. STATE OF KERALA & ANR.                                  969
                   [R. F. NARIMAN, J.)

      form a part, the Court may, when passing judgment, order the             A'
      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          B
      Court or by the High Court or Court of Session when exercising
      its powers ofrevision.                .
      (5) At the time ofawarding 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."           c
      It is important to note that sub-section (3) is a new provision which
did not exist in the old Criminal Procedure Code.
      8. The predecessor to Section 421 was Section 386 of the Code
of Criminal Procedure, 1898, which reads as follows :
      "386. Warrant for levy of fine.(!) Whenever an offender has
      been sentenced to pay a fine, the Co mi passing the sentence may
      take action for the recovery of the fine in either or both of the
      following ways, that is to say, it may-
      (a) issue a warrant for the levy of the amount by attachment and
      sale of any movable property belonging to the offender;
      (b) issue a warrant to the Collector of the District authorising him
       to realise the amount by execution according to civil process against
       the movable or immovable property, or both, of the defaulter:
         Provided that, if the sentence directs that in default of payment
                                                                               F'
       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 to do so.
       (2) The Government may make rules regulating the manner in
       which warrants under sub-section (1), clause (a), are to be             G
       executed, and for the summary determination ofany claims made
       by any person other than the offender in respect of any property
       attached in execution of such warrant.
       (3) Where the Courts issue a warrant to the Collector under sub-
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970     SUPREME COURT REPORTS                            [2017] 3 S.C.R.


A     section ( 1), Clause (b ), such warrant shall be deemed to be a
      decree, and the Collector to be the decree-holder, within the
      meaning of the Code of Civil Procedure, 1908, and the nearest
      Civil Court by which any decree for a like amount could be
      executed shall, for the purposes of the said Code, be deemed to
      be the Court which passed the Decree, and all the provisions of
B
      that Code as to execution of decrees shall apply accordingly:
        Provided that no such warrant shall be executed by the arrest
      or detention in prison of the offender."
      9. Section 421 of the present Code reads as follows:
 c     "421. Warrant for levy of fine. ( 1) When an offender has
       been sentenced to pay a fine, the Court passing the sentence
       may take action for the recovery of the fine in either or both of
       the following ways, that is to say, it may-
       (a) issue a warrant forthe levy of the amount by attachment and
 D     sale of any movable property belonging to the offender;
       (b) issue a warrant to the Collector of the district, authorising
       him to realise the amount as arrears of land revenue from the
       movable or immovable property, or both, of the defaulter:
       Provided that, if the sentence directs that in default of payment
 E     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
 F
       out of the fine under section 357.
       (2) The State Government may make rules regulating the manner
       in which warrants under clause (a) of sub-section (1) are to be
       executed, and for the summary determination of any claims made
       by any person other than the offender in respect of any property
       attached in execution of such warrant.
 G
       (3) Where the Court issues a warrant to the Collector under
       clause (b) of sub-section (1), the Collector shall realise the amount
       in accordance with the law relating to recovery of arrears of
       land revenue, as if such warrant were a certificate issued under
       such law:
 H
            KUMARAN v. STATE OF KERALA & ANR.                                 971
                   [R. F. NARIMAN, J.]

      Provided that no such warrant shall be executed by the arrest or A
      detention in prison of the offender."
       10. It may be noticed that the last part of the proviso to sub-
section ( 1), namely, "or unless it has made an order for the payment of
expenses or compensation out of the fine under Section 357" has been
added to the proviso for the first time. This was done pursuant to the B
41 ''Law Commission Report, which will be referred to a little later.
       11. The third important provision in the Code of Criminal Procedure
is Section 431, which reads as follows:
      "431. Money ordered to be paid recoverable as fine. Any
      money( other than a fine) payable by virtue of any order made           C
      under this Code, and the method of recovery of which is not
      otherwise expressly provided for, shall be recoverable as if it were
      a fine:
      Provided that section 421 shall, in its application to an orderunder
      section 359, by virtue of this section, be construed as if in the D
      proviso to sub-section ( 1) of section 421, after the words and
      figures "under section 357'', the words and figures "or an order
      for payment of costs under section 359" had been inse11ed."
        From this provision, it is clear that.a deeming fiction is enacted,
viz., that any money other than a fine, (which would include compensation     E
payable under Section 357(3) Cr.P.C.) the method ofrecovery of which
is not expressly provided for, shall be recoverable as if it was a fine.
One of the bones of contention in these appeals is the effect of the
deeming fiction under Section 431.
       12. Section 53 of the Indian Penal Code speaks of punishment to        F
which offenders are liable under the provisions of the Code. Suffice it
to say that fine is one of them, but compensation payable is not.
      13. Also contained in Chapter III of the Penal Code which is
headed "OF PUNISHMENTS" are the provisions of Sections 64 to 70.
Section 64 recognises that it shall be competent to the Court which           G
sentences an offender to state that, in default of payment of a fine, the
offender shall suffer imprisonment. Section 65 sets the limit to which
such imprisonment can go. Section 68 is important and reads as follows


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'' 972           SUPREME COURT REPORTS                          [2017] 3 S.C.R.


  .A          "68. Imprisonment to terminate on payment of fine.- The
              imprisonment which is imposed in default of payment of a fine
              shall terminate whenever that fine is either paid or levied by
              process of law."
           Section 70, which is almost determinative of the point that has
   B been argued in these appeals, reads as follows:
              "70. Fine Ieviable within six years, or during imprisonment
              - Death not to discharge property from liability.-The fine,
              or any part thereof which remains unpaid, may be levied at any
              time within six years after the passing of the sentence, and if,
   .C         under the sentence, the offender be liable to imprisonment for a
              longer period thari six years, then at any time previous to the
              expiration of that period; and the death of the offender does not
              discharge from the liability any property which would, after his
              death, be legally liable for his debts."

   D          14. It is important at this juncture to deal with some of the
         judgments of the High Courts.
            15. An early judgment of the Bombay High Court dealt with what
     were "special reasons" for the purpose of the proviso to Section 386( 1)
     under the old Code. A Division Bench of the said High Court in Digamber
   E Kashinath   Bhavarthi v. Emperor, AIR 1935 Born 160: ILR LIX Born
     350, dealt with the proviso to Section 386{1) in the following terms:·
               "On June 30, 1934, the applicant was Released from jail, having
               served not only his substantive sentence, but also the sentence
               imposed upon him in default of payment of the fine, and he now
    F          asks that the warrant for the recovery of the fine issued against
               him should be withdrawn, and in support of his contention he relies
               on the proviso to section 386(1). That proviso provides 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 a warrant
    0          under the section unless for special reasons to be recorded in
               writing it considers it necessary to do so. The proviso applies in
               terms only to the issue of a fresh warrant and does not require the
               withdrawal of a warrant already issued before expiration of the
               sentence in default of payment. But, I think that, in dealing with
                such existing warrants, the Court should follow the policy which
    H
          KUMARAN v. STATE OF KERALA & ANR.                           .• 'l!J73
                 [R. F. NARIMAN, J.]

      seems to have inspired the proviso to section 386. That policy . A
      appears to be that in general an offender ought not to be required
      both to pay the fine and to serve the sentence in default. But the
      proviso enables a warrant to be issued for recovery of the fine,
      even ifthe whole sentence in default has been served, ifthe Court
      considers that there are special reasons for issuing the warrant. I B
      apprehend that the special reasons should be reasons accounting
      for the fact that the fine has not been recovered before the
      sentence in default has been served, and any reasons which are
      directed to that point would be relevant. It may be that the
      authorities, through no negligence on their part, did not know of
      the existence of the property or the accused may have inherited C
      property after he served his sentence in default; or there may not
      have been time to execute the warrant. Matters of that sort would
      all be special reasons for issuing a warrant after the sentence in
      default had been served; and I think, in the same way, they are
      reasons justifying the Court in refusing to withdraw a warrant D
      already issued. In the present case, in my opinion, there are special
      reasons, though not quite those which were recorded by the Judge.
      I think that a special reason for not withdrawing the warrant is
      that before the sentence in default had been served the authorities
      had taken steps to enforce this warrant by levying execution, upon
      the immoveable property of the applicant, and the delay which E
      has taken place is not, in my opinion, shown to be due to any
      default on the part of the authorities. The learned Judge himself
       gave as his reasons for not withdrawing the warrant that the
      offence was a serious one, and the complainant had been allotted
      part of the fine. In my view, reasons of that sort are not relevant F
    . because they do not account for the fin~ not having been recovered
       before the service of the sentence in default. For these reasons, I
       think the application must be refused."
       16. This judgment was followed in Brahameshwar Prasad Sinha
v. State of Bihar, 1983 Cri LJ 8 by a Division Bench of the Patna High 'G
Court, in which the Patna High Court held as follows :
      "In Digamber Kashinath Bhavarthi v. Emperor (AIR 1935 Born
      160): (1935-36 Cri LJ 1034) the Bombay High Comt pointed out
      that special reasons mentioned in S. 386 of the old Code should
      be reasons accounting for the fact that the fine had not been
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'974            SUPREME COURT REPORTS                           [2017] 3 S.C.R.


             recovered from the convict before the sentence in default had
             been served out and any reasons which are directed to that point
             would be relevant applying that test, I am unable to say that the
             reasons-given by the learned Sessions Judge is not relevant. It
             must be pointed that. that the discretion is of the learned Sessions
             Judge and sitting in revision it may not be interfered with lightly."
 B
               17. A Single Judge of the Allahabad High Court in Parasnath v.
       .State AIR 1969 All 116 held as follows:
             "There is no provision in the Indian Penal Code like Sec. 68
             providing that, on the undergoing of the whole period of
             imprisonment, the fine shall not be recoverable. The procedure
             for recovery of such fines is provided for in Sec. 386 of the Code
             of Criminal Procedure. Sub-sec. (1) of Sec. 386, Cr. P.C. which
             is relevant, provides:
               "386(1)-Whenever an offender has been sentenced to pay a
 D             fine, the Court passing the sentence may take action for the
               recovery of the fine in either or both of the following way:>, that
               is to say, it may-
               (a) issue a warrant for the levy of the amount by attachment and
               sale of any movable property belonging to the offender;
               (b) issue a warrant to the Collector of the District authorising
               him to realise the amount by execution according to civil process
               against the movable or immovable property, or both, of the
               defaulter.
               Provided that, if the sentence directs that in default of payment
 F             of the fine the offender shall be imprisoned, and if such offender
               ha~ 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 to do so."
               The absence of any specific provision to the effect that the fine
             . shall not be realisable ifthe whole of the period ofimprisonment
 G
              ·for default has been undergone and the language of the proviso
               to sub-sec. (1) of Sec. 386, Cr. P.C. lead to the conclusion that
               the undergoing of imprisonment awarded in default of payment
               of the fine does not operate as a discharge or satisfaction of the
               fine which may nevertheless be levied in the manner prescribed
 H             by Sec. 386(1), Cr. P.C."
            KUMARAN v. STATE OF KERALA & ANR.                                   975
                   [R. F. NARIMAN, J.]

        18. A Single Judge of the Kerala High Court in Saji Kumar vs.           A
Soman Pillai, 2006 (3)KLT 679, set out Section 421 of the Code of
Criminal Procedure and held that the fiction contained in Section 431
Cr.P.C. must be extended logically until its object is accomplished. A
non-fine 'must be deemed to be a fine for the purpo'c of recovery. and
until recovery is complete, the fiction must continue. Having so held, the      B
learned Judge stated that the proviso to Section 421 (I) would apply not
merely to Section 357(1), but also to Section 357(3) and this being so,
held that despite the fact that the default sentence had been undergone,
compensation under Section 357(3) is recoverable. The impugned
judgment before us of the same High Court approved of the conclusion
of the aforesaid judgment, but with completely different reasoning,             C
According to the Division Bench, "compensation" is not a "sentence"
and this being the case, would not be covered by the proviso to Section
421(1). This would make it clear that since compensation is otherwise
recoverable, despite the default sentence having been undergone,
ultimately, a warrant can be issued under the first part of Section 421 ( 1).   D
       19. At this stage, it is important to refer to a few judgments of
various High Courts on the reach of Section 70 of the Penal Code. In
Kirpa Ram v. Emperor AIR 1914 Lahore 539, a Division Bench of
the Lahore High Court adverted to Section 70 of the Penal Code and
added that a fine can be collected even after the imprisonment awarded
in default has been undergone.                                           E
      20. In Collector of Broach and Panchmahals v. Ochhavlal
Bhikalal, AIR 1941 Born 158, a Division Bench of the Bombay High
Court held that Section 386 of the Cr.P.C. (i.e. the predecessor Section
to Section 421 of the present Code) relates only to procedure, whereas
the substantive Jaw as to payment of fine is contained in Section 70 of F
the Penal Code. This being the case, it was held that the limitation
period of six years from the date of the sentence barred the darkhast
that was presented in that case.
      21. In State v. Krishna Pillai, AIR 1953 Travancore-Cochin 233,
the law was stated thus:                                                        G
       "The jurisdiction of the trial court to impose a sentence of
       imprisonment in default of payment of fine is merely permissive.
       It is not imperative to award a term of imprisonment in default of
       payment of a fine. Section 64, Penal Code (S. 53, Travancore
                                                                                H
976           SUPREME COURT REPORTS                           [2017) 3 S.C.R.


A          Code) only states that it shall be competent to the court to impose
           a sentence of imprisonment for non-payment of fine. Further,
           imprisonment in default of payment of fine does not liberate an
           accused person from his liability to pay the fine imposed on him.
           Such imprisonment does not serve as a discharge or satisfaction
           of the fine, but is imposed as a punishment for nonpayment. The
 B
           fine would remain alive for collection for six years after the passing
           of the sentence. Assuming the accused counter-petitioner has no
           means now to pay the same, it can be recovered from any property
           acquired by him within the period specified. Even his death will
           not discharge from the liability any property which would, after
 c         his death be legally liable for his debts. (Section 70, Penal Code,
           corresponding to S. 59, Travancore Penal Code)."
          22. In K. Vemmana Shcnoy v. Collector of South Kanara,
   AIR 1964 Mys. 64, a Single Judge of that High Court adverted to the
   amending Act of 1923, by which a substantial change was made to Section
 D 386 of the Cr.P.C., which made it clear that the offender should not be
   made to pay fine as well as undergo imprisonment in default of payment
   of the fine in the absence of special reasons to be recorded in writing.
   The learned Single Judge held that Section 70 IPC read with Section
   386(1) proviso would necessarily.lead to the conclusion that in the absence
   of special reasons to be recorded in writing, the fine cannot be recovered
 E after the offender has undergone imprisonment in default of payment.

          23. A conspectus of the aforesaid judgments would show that
   compensation under the old Cr.P.C. was always recoverable as a pa1i
   of fine, and that even after default imprisonment having been undergone,
   a fine could still be collected in the manner provided by Section 386.
 F The requirement of special reasons was introduced by the amending
   Act of 1923. The special reasons outlined in the Bombay High Court
   judgment of 1935 as well as in the Mysore High Court judgment of 1964
   would show that it is enough that sufficient reasons or some good reason
   be given in order that fine be realized even after default imprisonment
 G has been undergone. The Courts held that despite the fact that the
   reach of Section 386(1) proviso was only qua warrants that issued after
    default imprisonment was undergone, yet, the principle of the proviso to
    Section 386(1) would apply even to warrants issued before default
    imprisonment was undergone. The law, therefore, till the enactment of
    the 1973 Code, made it clear that Section 386, and Section 70 IPC read
 H
           KUMARAN v. STATE OF KERALA & ANR.                                  977
                  [R. F. NARIMAN, J.]

together would lead to the conclusion that fines were recoverable even A
after default imprisonment was undergone, provided there were special
reasons for recovery of the same. With the Code of 1973 came an
interesting change. Sub-section (3) was added to Section 357, which
was an entirely new provision making it clear that the Court may, when
passing judgment, order the accused to pay by way of compensation B
such amount as may be specified in the order to the person who has
suffered loss or injury by reason of the act for which the accused person
has been sentenced. This is provided that the Court imposes a sentence
of which fine does not form a part. Another important change was
made in Section 421 ( 1). The proviso to the said sub-section was altered
because the 41" Law Commission Report, ih recommending amendments C
to the old Section 386 stated, after noticing the Bombay High Court
judgment in Digambar's case (supra) as follows :
      "28.10. Fine should be recoverable when compensation has
      been ordered. - We notice that in the above judgment the fact
      that the complainant has been allotted part of the fine was not D
      considered a relevant special reason for purposes of the proviso
      as it stands. A contumacious offender should not, in our opinion,
      be permitted to deprive the aggrieved party of the small
      compensation awarded to it by the device of undergoing the
      sentence of imprisonment in default of payment of the fine. When
      an order under Section 545 has been passed for payment of E
      expenses or compensation out of fine, recovery of the fine should
      be pursued, and in such cases, the fact that the sentence of
      imprisonment in default has been fully undergone should not be a
      bar to the issue ofa warrant for levy of the fine. We recommend
      that the proviso to section 386( 1) should make this clear."      F
       24. Following paragraph 28.10, the words "or unless it made an
order for the payment of expenses or compensation out of the fine under
Section 357" was added to the proviso which was contained in old
Section 386( 1) and continued in Section 421 (I).
     25. At this juncture, it is important to note that in Vijayan v.         G
Sadanandan K. (2009) 6 SCC 652, this Court held :
      "29. To appreciate the said legal position, the provisions of Section
      431 are set out hereinbelow:

                                                                              H
978         SUPREME COURT REPORTS                        [2017] 3 S.C.R.


A           "431. Money ordered to be paid recoverable as jine.-Any
            money (other than a fine) payable by virtue of any order made
            under this Code, and the method of recovery of which is not
            otherwise expressly provided for, shall be recoverabfe as if it
            were a fine:
 B          Provided that Section 421 shall, in its application to an order
            under Section 359, by virtue of this section, be construed as
            if in the proviso to sub-section (1) of Section 421, after the
            words and figures 'under Section 357', the words and figures
            'or an order for payment of costs under Section 359' had been
            inserted."
 c
         Section 431 makes it clear that any money other than a
         fine payable on account of an order passed under the Code shall
         be recoverable as if it were a fine which takes us to Section 64
         IPC.
 D       30. Section 64 IPC makes it clear that while imposing a sentence
         of fine, the comt would be competent to include a default sentence
         to ensure payment of the same. For the sake ofreference, Section
         64 IPC is set out hereinbelow:
            "64. Sentence of imprisonment for non-payment offine.-
 E          In every case of an offence punishable with imprisonment as
            well as fine, in which the offender is sentenced to a fine,
            whether with or without imprisonment, and in every case of
            an offence punishable with imprisonment or fine, or with fine
            only, in which the offender is sentenced to a fine, it shall be
            competent to the court which sentences such offender to
 F          direct by the sentence that, in default of payment of the fine,
            the offender shall suffer imprisonment for a certain term,
            which imprisonment shall be in excess of any other
            imprisonment to which he may have been sentenced or to
            which he may be liable under a commutation of a sentence."
 G        31. The provisions of Sections 357(3) and 431 CrPC, when read
          with Section 64 IPC, empower the court, while making an order
          for payment of compensation, to also include a default sentence
          in case of non-payment of the same."
        26. This statement of the law was reiterated in R. Mohan v.
 H A.K. Vijaya Kumar, (2012) 8 SCC 721 (see paras 26 to 29).
             KUMARAN v. STATE ,OF KERALA & ANR.                                 979
                    [R. F. NARIMAN, J.].

          27. These two judgments make it clear that the deeming fiction of     A
· Section 431 Cr.P.C. extends not only to Section 421, but also to Section
  64 of the Indian Penal Code. This being the case, Section 70 IPC,
  which is the last in the group of Sections dealing with sentence of
  imprisonment for non-payment of fine must also be included as applying
  directly to compensation under Section 357(3) as well. The position in        B
  law now becomes clear. The deeming provision in Section 431 will
  apply to Section 421(1) as well, despite the fact that the last part of the
  proviso to Section 421 (I) makes a reference only to an order for payment
  of expenses or compensation out of a fine, which would necessarily
  refer only to Section 357(1) and not 357(3). Despite this being so, so
  long as compensation has been directed to be paid, albeit under Section       C
  357(3), Section 431, Section 70 IPC and Section 421 ( l) proviso would
  make it clear that by a legal fiction, even though a default sentence has
  been suffered, yet, compensation would be recoverable in the manner
  provided under Section 421(1). This would, however, be without the
  necessity for recording any special reasons. This is because Section          D
  421 ( l) proviso contains the disjunctive "or" following the recommendation
  of the Law Commission, that the proviso to old Section 386(1) should
  not be a bar to the issue of a warrant for levy of fine, even when a
  sentence of imprisonment for default has been folly undergone. The
  last part inserted into the proviso to Section 421(1) as a result of this
  recommendation of the Law Commission is a category by itself which            E
  applies to compensation payable out of a fine under Section 357(1) and,
  by applying the fiction contained in Section 431, to compensation payable
  under Section 357(3).
        28. As is well known, a legal fiction is not to be extended beyond
 the purpose for which it is created or beyond the language of the section F
 by which it is created. For example, see Prakash H. Jain v. Marie
 Fernandes, (2003) 8 SCC 431 at 438. However, once the purpose of
 the legal fiction is ascertained, full effect must be given, and it should be
 carried to its logical conclusion. This is clear from the celebrated passage
 in East End Dwelling Co. Ltd. v. Finsbury Borough Council, 1951
 (2) All ER 587 at 589:                                                        G

        "if you are bidden to treat an imaginary state of affairs as real,
        you must surely, unless prohibited from doing so, also imagine as
        real the consequences and incidents which, ifthe putative state of
        affairs had in fact existed, must inevitably have flowed from or
                                                                                H
980             SUPREME COURT REPORTS                       [2017] 3 S.C.R.


A           accompanied it. One of those in this case is emancipation from
            the 1939 level of rents. The statute says that you must imagine a
            certain state of affairs; it does not say that having done so, you
            must cause or permit your imagination to boggle when it comes to
            the inevitable corollaries of that state of affairs".
 B        29. The legal fiction enacted under Section 431 is not limited to
   "the purpose of this Act" unlike Section 6A of the Central Sales Tax
   Act, as was the case in Ashok Leyland Limited v. State of Tamil
   Nadu, (2004) 3 SCC I at para 32,76. Thus it is clear that the object of
   the legal fiction created by Section 431 is to extend for the purpose of
   recovery of compensation until such recovery is completed - and this
 C would necessarily take us not only to Section421 of the Cr.P.C. but also
   to Section 70 of the Penal Code, a companion criminal statute, as has
   been held above.
          30. This being the case, we uphold the conclusion of the judgment
   dated 81h August, 2012 of the Division Bench of the Kerala High Court
 D but for the reasons given in this judgment. The appeals are dismissed
   accordingly.               ·


      Devika Gujral                                            Appeals dismissed.