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Synopsis

The Supreme Court has ruled that it is not justified for the High Court to direct a convict to deposit 50% of compensation as a condition for granting suspension of sentence in a criminal case.

A bench of Justices P.S. Narasimha and Pankaj Mithal allowed an appeal filed by one Nikhil against the Bombay High Court's order of May 2, 2023.

The appellant was aggrieved by the High Court's order, which granted suspension of sentence by imposing the condition of depositing 50% of the compensation of Rs 2,86,00,125, amounting to Rs 1.43 crores.

The appellant was convicted by the Trial Court and apart from a sentence of four years six months rigorous imprisonment under Sections 409 and 201 IPC, he was also directed to pay an amount of Rs.2.86 crores.

Against the conviction and imposition of compensation, the appellant filed a criminal appeal and sought suspension of sentence, which was rejected by an order dated April 3, 2023.

Challenging the above said order passed by the Criminal Appellate Court, the appellant approached the High Court by way of a criminal application, which the High Court allowed and set aside the Criminal Appellate Court's order. The High Court also allowed the application for suspension of substantive sentence, subject to a condition that the applicant shall furnish solvent surety in the sum of Rs. 1,00,000. The High Court, however, imposed another condition that the applicant shall also deposit 50% of the compensation awarded by the impugned order, being a condition for suspension of sentence and his release on bail.

While admitting the appeal against the High Court's order, the Apex Court, by an order dated September 6, 2023, suspended the direction to deposit 50% of the compensation awarded.

After hearing the counsel for the appellant and the state government, the bench set aside the High Court's order.

"Having considered the matter in detail, we are of the opinion that taking into account the purpose and object of Section 357, read with its enunciation in Dilip S Dahanukar vs Mahindra Co Ltd (2007) the direction of the High Court granting suspension of sentence subject to the condition of depositing 50% of compensation is not justified," the bench said.

The High Court, in its order, had noted the gravity and enormity of the misappropriation as quite serious, as the genuine and innocent customers of the bank had been duped and denied the benefit of their money. Therefore, the High Court said the accused is under an obligation to pay the compensation.

"Even if he undergoes the default sentence, he cannot be exonerated from paying the compensation. It is to be noted that at this stage the submission advanced on behalf of the accused that he has chance to succeed in appeal, cannot be made basis for not directing the accused to deposit the compensation. In my view, considering the facts and circumstances, the interest of justice would be met if the accused is directed to deposit 50% of the amount of compensation as a condition for suspension of sentence," the High Court judge had said.