It is not justified to impose the requirement to deposit 50% of the compensation in order to suspend the penalty

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Summary

The Supreme Court has ruled that it is not justified to require a convicted person to deposit 50% of compensation as a condition for granting a suspended sentence in criminal proceedings.

A bench comprising PS Narasimha and Pankaj Mithal allowed the appeal of one Nikhil against the Bombay High Court order dated May 2, 2023.

The complainant was upset with the decision of the Supreme Court which granted stay of sentence on condition that he deposit 50% of the compensation amounting to Rs 2,860,125 i.e. Rs 1.43 crore.

The appellant was convicted by the court and was required to pay a fine of Rs 2.86 crore besides imprisonment for a term of four years and six months under Sections 409 and 201 of the IPC.

The complainant lodged an appeal against the conviction and the imposition of compensation and requested a suspension of the sentence, which was rejected by decision of 3 April 2023.

The appellant challenged the above order of the appellate court and approached the Supreme Court with a criminal complaint which allowed the application and set aside the order of the appellate court. The Supreme Court also allowed the application for suspension of the main sentence on the condition that the applicant furnishes a solvent security of Rs. 1,00,000/-. However, the Supreme Court imposed a further condition that the applicant has to deposit 50% of the compensation awarded by the impugned order, which is a precondition for suspension of sentence and release on bail.

While the Supreme Court allowed an appeal against the Supreme Court’s decision, it stayed the order to deposit 50% of the compensation awarded by its decision of September 6, 2023.

After hearing the counsel for the appellant and the State Government, the Court set aside the Supreme Court order.

“After a detailed examination of the matter, we are of the view that the direction of the Supreme Court granting suspension of sentence subject to deposit of 50% compensation is not justified keeping in view the object and objective of Section 357 as envisaged in Dilip S. Dahanukar vs. Mahindra Co. Ltd. (2007),” the court said.

The Supreme Court in its judgment had considered the gravity and extent of the embezzlement to be very serious as the genuine and innocent customers of the bank had been cheated and deprived of their money. Therefore, the Supreme Court declared that the accused was liable to pay the compensation.

“Even if he serves the substitute sentence, he cannot be exempted from paying the compensation. It is to be noted that at this stage, the argument advanced on behalf of the accused that he has prospects of success in the appeal cannot serve as a basis for not directing the accused to deposit the compensation. In my view, it would be in the interest of justice if the accused is directed to deposit 50% of the compensation amount as a condition of suspension of sentence, if directed taking into account the facts and circumstances,” the Supreme Court judge had said.