Amount Recovered In Civil Suit Can Be Adjusted Against Criminal Compensation In NI Act Cases: Delhi High Court

The Delhi High Court recently allowed the plea of a man, convicted for cheque dishonour, to set off the amount recovered from him in a civil suit relating to the same cheques, against the compensation to be paid in the criminal proceedings under Section 138 of the Negotiable Instruments Act 1881.Justice Manoj Kumar Ohri observed,“Since Section 357(5) CrPC allows the Court to adjust any amount paid or compensation received in criminal proceedings in any subsequent civil suit relating to the same matter, there is no bar in applying the reverse analogy, and adjusting any amount earlier received in a civil suit pertaining to the same matter, in the subsequent criminal proceedings.”For context, Section 357 CrPC empowers a court to order a convicted person to pay compensation to the victim.Section 357(5) stipulates that in any subsequent civil suit relating to the same matter, at the time of awarding compensation, the Court shall take into account any sum paid or recovered as compensation under this section.In the case at hand, the Appellant was convicted under Section 138 NI Act and directed to pay a compensation of Rs.1,50,00,000/-.On account of the same cause of action that had accrued on account of dishonour of the cheque, the respondent-complainant had additionally pursued a civil suit which resulted in Appellant paying Rs. 33,10,000/- to the respondent.Appellant prayed to adjust the said amount against the fine imposed on him in the criminal proceedings, amount as both the proceedings were in respect of the same cheque amount.The Court allowed this plea and directed to “adjust the amount received by the respondent in the execution proceedings, i.e. Rs. 33,10,000/-, towards the compensation amount of Rs. 1.5 Crores.”Significant to note that the Appellant had been undergoing sentence in default for non-payment of compensation. The High Court however ordered his release citing Section 69 IPC.The provision stipulates that if before the expiration of the term of imprisonment fixed in default of payment, such a proportion of the fine is paid that the term of imprisonment suffered in default of payment is not less than proportional to the part of the fine still unpaid, the imprisonment shall terminate.The Court noted that taking into account the sum of Rs. 33,10,000/- already received by the respondent in execution proceedings, which amounts to around 22 percent of the total compensation amount, the default sentence (of 6 months) is also reduced by a similar proportion, i.e. by around 39 days.“Since the remaining sentence is less than 39 days, the appellant has already undergone the reduced default sentence. Consequently, the appellant is directed to be released forthwith, if not required in any other case,” the Court ordered.Appearance: Mr. Alok Tripathi, Mr. Amitosh Chaturvedi and Mr. Saurabh Mishra, Advocates for Appellant; Mr. Hitesh Vali, APP for State Mr. Jitendra Bakshi, Advocate for respondent no.2 (through VC) for RespondentsCase title: Mohd Umar v. State (NCT of Delhi)Citation: 2025 LiveLaw (Del) 1553Case no.: CRL.A. 90/2025Click here to read order

Amount Recovered In Civil Suit Can Be Adjusted Against Criminal Compensation In NI Act Cases: Delhi High Court

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