Holding

A Judicial Magistrate of First Class cannot impose a fine exceeding Rs 5,000 under Section 138 of the Negotiable Instruments Act; the non‑obstante clause in Section 142 does not expand this power, but compensation may be awarded under Section 357 without limit.

Summary

The appellant was convicted under Section 138 of the Negotiable Instruments Act and sentenced by a Judicial Magistrate of First Class to six months' imprisonment and a fine of Rs 83,000. The conviction and sentence were affirmed by the Sessions Judge and the Gujarat High Court. On appeal to the Supreme Court, the appellant argued that a Judicial Magistrate of First Class cannot impose a fine exceeding Rs 5,000 under Section 29(2) of the Criminal Procedure Code. The State contended that the non‑obstante clause in Section 142 of the NI Act and the saving clause in Section 5 of the CrPC allowed a higher fine. The Court held that Section 142 does not expand the magistrate's power beyond the CrPC limit and that Section 5's saving clause applies only where a special jurisdiction is expressly conferred, which is absent here. Consequently, the fine portion of the sentence was deleted and the appellant was ordered to pay compensation of Rs 83,000 under Section 357 of the CrPC, which has no monetary ceiling. The appeal was dismissed.

Issues considered

Whether a Judicial Magistrate of First Class may impose a fine exceeding Rs 5,000 for an offence under Section 138 of the Negotiable Instruments Act.
Whether the non‑obstante clause in Section 142 of the Negotiable Instruments Act overrides the fine limitation in Section 29(2) of the Criminal Procedure Code.
Whether the saving provision of Section 5 of the Criminal Procedure Code confers a special jurisdiction on the magistrate to exceed the fine limit.
Whether compensation can be awarded under Section 357 of the Criminal Procedure Code without a statutory ceiling.

Legislation cited

Code of Criminal Procedure, 1973s. 29(2), s. 325, s. 357, s. 5
Negotiable Instruments Act, 1881s. 138, s. 142

Subjects

Negotiable Instruments ActSection 138Fine limitationCriminal Procedure CodeSection 29Section 142Non-obstante clauseCompensationSection 357Magistrate powers

Judgment

PANKAJBHAl NAGJIBHAI PATEL A
v.
THE STATE OF GUJARAT AND ANR.

JANUARY 12, 2001

[K.T. THOMAS AND R.P. SETHI, JJ.] B

Negotiable Instruments Act, 1881/Criminal Procedure Code, 1973-
Sections 138 and 142/Sections 5, 29(2), 325 and 357-Scope of power of
Magistrate of First Class for imposition of fine-Held, the power cannot
exceed the iimitation imposed under section 29 of the Code; however, no C
limitation imposed under sectiof! 357 for award of compensation.

~ Appellant was convicted under Section 138 of the Negotiable
Instruments Act, 1881 and sentenced to imprisonment for six months with
a fine of Rs. 83,000 by Judicial Magistrate of First Class. The conviction
and sentence were confirmed by Sessions Judge and High Court. D

In appeal to this Court, the appellant contended that a Judicial Magistrate
cannot impose a fine beyond Rs. 5000 in view of the limitation contained
~
under section 29(2) of the Criminal Procedure Code, 1973.

The respondent-State, on the other hand, contended that the power of E
the Judicial Magistrate is not limited by section 29(2) of Cr.P.C. in view of
the non-obstante clause contained in section 142 of the Act; and that section
5 Cr.P.C. mandated that nothing in the Code would affect any special
jurisdiction or power conferred by any other law.

Disposing of the appeal, the Court F
HELD: 1.1. The non-obstante clause provided in Section 142 offhe
Negotiable Instruments Act is not intended to expand the powers of a
Magistrate of First Class beyond what is fixed in Chapter III of Cr.P.C.
Section 29, which falls within Chapter III of Cr. P.C., contains a limit for a
Magistrate of First Class in the matter of imposing a sentence i.e., if the
G
'.._
~ sentence is imprisonment, it shall not exceed 3 years and if the sentence is
fine (even if it is part of the sentence), it shall not exceed Rs. 5000.
(341-A-Bl

1.2. Non-application of the Code on "any special jurisdiction or power H
337
338 SUPREME COURT REPORTS [200 I] I S.C.R.

A conferred by any other law for the time being in force" as stated under
section 5 Cr.P.C. is limited to the area where such special jurisdiction or
power is conferred. Section 142 of the Act has not conferred any special
jurisdiction or power on a judicial magistrate of First Class. That section
has only excluded the powers of other Magistrates from trying the offence
",
... .

under section 138 of the Act. In the absence of any provision in the Act, no
B specia! power can be read into it as having conferred on a Magistrate of First
Class in the matter of imposition of sentence. (342-C; 343-BI """ I

"It
1.3. Whenever a Magistrate of First Class feels that the complainant
should be compensated, he can, after imposing a term of imprisonment,

c award compensation to the complainant for which no limit is prescribed in
section 357 of Cr.P.C. 1343-FI

1.4. While retaining the sentence of imprisonment of six months, the
fine portion from the sentence is deleted and the appellant is directed to pay ~
compensation of Rs. 83,000 to the respondent-complainant. The said amount
D shall be deposited with the trial court within six months failing which the
trial court shall resort to the steps permitted by law to realise it from the
appellant. 1344-C(

K. Bhaskaran v. Sankaran Vaidhyan Ba/an & Anr., (19991 7 SCC 510,
relied on.
E
A. Y. Prabhakar v. Naresh Kumar N. Shah, (19941 Madras Law Journal
(Crl.) 91 = (19951 Company Cases (Vol. 83) 191 and K.P. Sahdevan v. TK.
Sreedharan, ( 19961 2 Criminal Law Journal 1223 = 1996 I Kerala Law
Times 40, referred to.

F CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
66 of 200 I.

From the Judgment and Order dated 25.4.2000 of the Gujarat High Court
in Crl. R.A. No. 145 of2000.
G
A.P. Mayee, Rucha Mayee and Ms. Asha Gopalan Nair for the Appellant.
...,.
Sudhir Kulshreshtha, Ms. Mukta Sharma, Ms. Reena Singh and Anil
Kumar Shanna for the Respondents.

H The Judgment of the Court was delivered by
x
P.N. PATEL v. STATE OF GUJARAT [THOMAS, J.] 339
THOMAS, J. Leave granted. A
A Judicial Magistrate of first class, after convicting an accused of the
offence under Section 138 of the Negotiable Instruments Act (for short 'the
NI Act') sentenced him to imprisonment for six months and a fine of Rs.
} 83,000. The conviction and sentence were confirmed by the Sessions Judge
......' in appeal and the revision filed by the convicted person was dismissed by B
the High Court. When the special leave petition was moved, learned counsel
confined his contention to the question whether a Judicial Magistrate of first
class could have imposed a sentence of fine beyond Rs. 5,000 in view of the
limitation contained in Section 29(2) of the Code of Criminal Procedure (for
short 'the Code'). As the decision of this Court in K. Bhaskaran v. Sankaran C
Vaidhyan Ba/an and anr., [1999] 7 SCC 510, is in support of the said contention
we issued notice to the respondent mentioning that it is limited to the
question of sentence. Learned counsel for the respondent contended that the
decision of this Court to the effect that power of the Judicial Magistrate of·
first class is limited in the matter of imposing a sentence of fine of Rs. 5000
is not correct in view of the non-obstante clause contained in Section 142 of D
the NI Act. We, therefore, heard both counsel on that aspect.

Section 138 of the N' Act provides the punishment as imprisonment
for a term which may extend to one year or fine which may extend to "twice
the amount of cheque" or with both. Section 29(2) of the Code was referred
to in Bhaskaran 's decision (supra) which contains the limitation for a E
Magistrate of first class in the matter of imposing fine as a sentence or as
part of the sentence. That sub-section says that "the court of a Magistrate
of the first class may pass a sentence of imprisonment for a tenn not exceeding
three years, or of fine not exceeding five thousand rupees, or of both." On
~ the strength of the said sub-section it was held in Bhaskaran 's case thus: p
"The trial in this case was held before a Judicial Magistrate of the
first class who could not have imposed a fine exceeding Rs. 5000
besides imprisonment. The High Court while convicting the accused
in the same case could not impose a sentence of fine exceeding the
said limit." G
~ In order to obviate the said hurdle learned counsel for the respondent
adopted a twin contention. First is that the non-obstante clause in Section/
142 of the Act is enough to bypass the limitation imposed by Section 29(2)
of the Code. Second is that even apart from the said non- obstante words in
the said provision, Section 5 of the Code itself mandated that nothing in the H
340 SUPREME COURT REPORTS (2001] 1 S.C.R.

A Code would affect any special jurisdiction or power conferred by any other
law.

We would first consider the effect of the non-obstante clause in Section
142 of the NI Act. The section reads thus:

B "142. Cognizance of offences.-Notwithstanding anything contained
in the Code of Criminal Procedure, 1973 (2of1974), -

(a) no court shall take cognizance of any offence punishable under
Section 138 except upon a complaint, in writing, made by the
payee or, as the case may be, the holder in due course of the
c cheque;
(b) such complaint is made within one month of the date on which
the cause of action arises under clause (c) of the proviso to
Section 138;
D (c) no court inferior to that of a Metropolitan Magistrate or a
Judicial Magistrate of the first class shall try any offence
punishable under Section 138."

It is clear that the aforesaid non-obstante expression is intended to
operate only in respect of three aspects, and nothing more. The first is this:
E Under the Code Magistrate can take cognizance of an offence either upon
receiving a complaint, or upon a police report, or upon receiving information
from any person, or upon his own knowledge except in the cases differently
indicated in Chapter XIV of the Code. But Section 142 of the NI Act says
that in so far as the offence under Section 138 is concerned no court shall
take cognizance except upon a complaint made by the payee or the holder in
F due course of the cheque.

The second is this: Under the Code a complaint could be made at any
time subject to the provisions of Chapter XXXVI. But so far as the offence
under Section 138 of the NI Act is concerned such complaint shall be made
G within one month of the cause of action. The third is this: Under Article 511
of the First Schedule of the Code, if the offence is punishable with
imprisonment for less than 3 years or with fine only under any enactment 7-
(other than Indian Penal Code) such offence can be tried by any Magistrate.
Normally Section 138 of the NI Act which is punishable with a maximum
sentence of imprisonment for one year would have fallen within the scope
H of the said Article. But Section 142 of the NI Act says that for the offence
P.N. PA TEL v. STATE OF GUJARAT [THOMAS. J.] 341

under Section 138, no court inferior to that of a Metropolitan Magistrate or A
Judicial Magistrate of first class shall try the said offence.

Thus, the non-obstante limb provided in Section 142 of the NI Act
is not intended to expand the powers of a Magistrate of first class beyond
what is fixed in Chapter Ill of the Code. Section 29, which falls within Chapter B
1II of the Code, contains a limit for a Magistrate of first class in the matter
of imposing a sen,tence as noticed above i.e., if the sentence is imprisonment
it shall not exceed 3 years and if the sentence is fine (even if it is part of the
sentence) it shall not exceed Rs. 5000.

Two decisions holding a contrary view have been brought to our notice. c
The first is that of a Single Judge of the Madras High Court in A. Y. Prabhakar
v. Naresh Kumar N. Shah, (1994) Madras Law Journal (Crl.) 91=1995 Company
Cases (Vol. 83) 191. The other is that of a Single Judge of the Kerala High
~
Court which simply followed the aforesaid decision of the Madras High Court
K.P. Sahdevan v. TK. Sreedharan, (1996) 2 Criminal Law Journal 1223 = (1996)
1 Kerala Law Times 40. The learned Single Judge of the Kerala High Court D
(Balanarayana Marar, J .) dissented from a contrary view expressed in an earlier
judgment of the same High Court and had chosen to agree with the view of
the Madras High Court held in Prabhakar v. Naresh Kumar N. Shah (supra).
What Marar, J. had adopted was not a healthy course in the comity of Judges
in that he had sidelined the earlier decision of the same High Court even after
E
the same was brought to his notice. If he could not agree with the earlier view
of the same High Court he should have referred the question to be decided

-'
) by a larger bench. Learned Single Judge of the Madras High Court did. not
advance any reasoning except saying that Section 29(2) of the Code1 is not
applicable in view of the primary clause in Section 142 of the Nf~ct. As
~ pointed out by us earlier, the scope of the said primary clause cannot be F
stretched to any area beyond the three facets mentioned therein. Hence the
two decision cited above cannot afford any assistance in this appeal.

The second contention depends upon the construction of Section 5 of
the Code. Before that Section is considered it is adyantageous to have a look
G
at the preceding section which is in a way. cognate to the provision cited .
.... Section 4(1) of the Code concerns only with offences under the Indian Penal
Code but sub-section (2) says that all offences under any other law shall be
'_.. investigated, inquired into, tried, and otherwise dealt with according to the
same provisions of the Code unless any other enactment contains provisions
regulating the manner or place of such investigation, inquiry or trial or how H
342 SUPREME COURT REPORTS (200 I] I S.C.R.

'A otherwise such offences should be dealt with. This means, if an other enactment
does not regulate the manner or place of trial etc. of any particular offence
y
the provisions of the Code will continue to control the investigation or
inquiry or trial of such offence. Now Section 5 of the Code has to be seen.

"5. Saving.-Nothing contained in this Code shall, in the absence of
B a specific provision to the contrary, affect any special or local law for
the time being in force, or any special jurisdiction or power conferred,
or any special form of procedure prescribed, by any other law for the
time being in force."

Non-application of the Code on "any special jurisdiction or power
c conferred by any other law for the time being in force" is thus limited to
the area where such special jurisdiction or power is conferred. Section 142
of the NI Act has not conferred any "special jurisdiction or power" on a
Judicial Magistrate of first class. That section has only excluded the powers
of other magistrates from trying the offence under Section 138 of the NI Act.
4 -
D
In this context it is profitable to refer to the method usually adopted
by the Parliament for conferring special jurisdiction or powers on magistrates
of first class in the matter of awarding sentences obviating the limitation
stipulated in Section 29(2) of the Code. The Essential Commodities Act
contained a provision as Section 12 which read thus:
E
"12. Special provision regarding fine-Notwithstanding anything
contained in section 29 of the Code of Criminal Procedure, 1973 (2 of
1974), it shall be lawful for any Metropolitan Magistrate, or any
Judicial Magistrate of the first class specially empowered by the
State Government in this behalf, to pass a sentence of fine exceeding
F
five thousand rupees on any person convicted of contravening any
order made under section 3."

(Of course the said provision has since been deleted from the statute book
when jurisdiction to try the offences under the Essential Commodities Act has
G been conferred on Special Court which is deemed to be a Court of Sessions.)

Another instance is, Section 36 of the Drugs and Cosmetics Act which --;..
says that "Notwithstanding anything contained in the Code it shall be lawful
for any Metropolitan Magistrate or Judicial Magistrate of the first class to
pass any sentence authorised by this Act in excess of the powers under the
H Code". A similar provision is incorporated in Section 21 of the Prevention of
P.N. PATEL v. ST ATE OF GUJARAT [THOMAS, J.] 343
Food Adulteration Act also. A
"ti
Those instances bear ample illustrations as to how the legislature had
exercised when it wanted the limitations specified under Section 29 of the
Code to be surmounted under special enactments. (Those instances are only
illustrative, and not exhaustive.) In the absence of any such provision in the
NI Act we cannot read any special power into it as having conferred on a B
.,,, magistrate of first class in the matter of imposition of sentence .

In this context, we may also point out that if a Magistrate of first class
thinks that the fact situation in a particular case warrants imposition of a
sentence more severe than the limit fixed under Section 29 of the Code, the
legislature has taken care of such a situation also. Section 325 of the Code
c
is included for that purpose. Sub-section (I) of that Section reads thus:
>
\. "Whenever a Magistrate is of opinion, after hearing the evidence for
the prosecution and the accused, that the accused is guilty, and that
he ought to receive a punishment different in kind from, or more
D
severe than that which such Magistrate is empowered to inflict, or,
being a Magistrate of the second class, is of opinion that the accused
ought to be required to execute a bond under section I 06, he may
record the opinion and submit his proceedings, and forward the
+- accused, to the Chief Judicial Magistrate to whom he is subordinate."
E
If proceedings are so submitted to the Chief Judicial Magistrate under
Section 325(1) of the Code it is for the Chief Judicial Magistrate to pass such
judgment, sentence or order in the case, as he thinks fit. It is so provided
,'
I in sub-section (3) thereof.
-
• Even that apart, a Magistrate who thinks it fit that the complainant must
be compensated with his loss he can resort· to the course indicated in Section
F

357 of the Code. This aspect has been dealt with in Bhaskaran's case (supra)
as follows:

"However, the Magistrate in such cases can alleviate the grievance of
G
the complainant by ·making resort to Section 357(3) of the Code. It is
... well to remember that this Court has emphasised the. need for making
liberal use of that provision (Hari Singh v. Sukhbir Singh [1988] 4
SCC 551). No limit is mentioned in the sub-section and therefore, a
Magistrate can award any sum as compensation. Of course while
fixing the quantum of such compensation the Magistrate has to H
344 SUPREME COURT REPORTS (2001] I S.C.R.

A consider what would be the reasonable amount of compensation
payable to the complainant. Thus, even if the trial was before a Court
of Magistrate of the first class in respect of a cheque which covers
an amount exceeding Rs. 5000 the Court has power to award
compensation to be paid to the complainant."

B In our view this question does not now pose any practical difficulty.
Whenever a magistrate of the first class feels that the complainant should be
compensated he can, after imposing a term of imprisonment, award
compensation to the complainant for which no limit is prescribed in Section
357 of the Code.

c In the result, while retaining the sentence of imprisonment of six months
we delete the fine portion from the sentence and direct the appellant to pay
compensation of Rs. 83,000 to the respondent-complainant. The said amount
shall be deposited with the trial court within six months failing which the trial
court shall resort to the steps permitted by law to realise it from the appellant.
D This appeal is disposed of accordingly.

B.S. Appeal disposed of.