CRIMINAL PROCEDURE - whether by virtue of Section 357(2) Cr.P.C., the said fine which was part of sentence automatically was stayed till the decision of the appeal and would not have been directed by the High Court to be deposited by the appellant.= We, however, make it clear that Appellate Court while exercising power under Section 389 Cr.P.C. can suspend the sentence of imprisonment as well as of fine without any condition or with conditions. There are no fetters on the power of the Appellate Court while exercising jurisdiction under Section 389 Cr.P.C.. The Appellate Court could have suspended the sentence and fine both or could have directed for deposit of fine or part of fine.

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.406 OF 2018
(ARISING OUT OF SLP(CRL.)NO.1994 OF 2018)
SATYENDRA KUMAR MEHRA
@ SATENDERA KUMAR MEHRA                      … PETITIONER
VERSUS
THE STATE OF JHARKHAND         … RESPONDENT
J U D G M E N T
ASHOK BHUSHAN, J.
This appeal has been filed against an order of the High
Court of Jharkhand at Ranchi in Criminal Appeal NO.176 of 2018
by which High Court by allowing I.A.No. 892 of 2018 filed by
the appellant, has   directed to grant suspension of sentence
of   the   appellant.   The   High   Court   further   directed   that   the
appellant should also deposit the fine amount awarded before
the court below. The appellant is aggrieved only against that
part of the order by which the High Court directed the deposit
of fine amount.
2. The   appellant   was   an   accused   in   R.C.   Case   No.68(A)   of
1996­State (through CBI) vs. Lalu Prasad @ Lalu Prasad Yadav
and   others.   Accused   were   tried   for   the   offence   punishable
under Sections 120­B/ read with 409, 420, 467, 468, 471 and
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477­A of the IPC read with Section 13(1)(c) & (d) and 13(2) of
Prevention of Corruption Act, 1988. The trial court by order
dated 24.01.2018 convicted the accused and awarded sentence.
The appellant,  who  was  one  of  the  accused,  was  awarded  the
following sentence by the trial court:
   "44.   Satyendra   Kumar   Mehra   convicted   for
offence   punishable   U/s   120­B/420,   120­B/467,
120­B/468 and 120­B/471 IPC:
U/s 120­B/420 IPC R.I. of Five(05) Years with
fine of Rs.25,000/­ and in default of payment
of fine S.I. for Three (03) Months.
U/s   120­B/467   IPC   R.I.   of   Five   (05)   Years
with   fine   of   Rs.25,000/­   and   in   default   of
payment of fine S.I. for Three (03) Months.
U/s 120­B/468 IPC R.I. of Five(05) Years with
fine of Rs.25,000/­ and in default of payment
of fine S.I. for Three (03) Months.
U/s 120­B/471 IPC R.I. of Five(05) Years with
fine of Rs.25,000/­ and in default of payment
of fine S.I. for Three (03) Months.
All the sentences shall run concurrently and
the period undergone shall be set off.”
3. Aggrieved against the above conviction and sentence order
the appellant filed Criminal Appeal No.176 of 2018 before the
High   Court.   The   appellant   also   filed   application   praying
suspension of sentence. After hearing, the High Court allowed
the   application   granting   the   privilege   of   suspension   of
sentence   to   the   appellant   and   directing   the   appellant   be
released on bail on furnishing  bail bond of Rs.50,000/­ with
two sureties. However, while allowing the application the High
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Court  passed the following direction:
"Appellant should also deposit the fine amount
awarded before court below.”
4. The appellant aggrieved by the aforesaid direction of the
High Court to deposit the fine amount awarded by the court
below has come up in this appeal.
5. We   have   heard   Shri   Sunil   Kumar,   learned   senior   counsel
appearing   for   the   appellant   and   Shri   Aman   Lekhi,   learned
Additional   Solicitor   General   for   India   appearing   for   the
respondent­State.
6. Learned counsel for the appellant relying on Section 357
sub­Section (2) of Criminal Procedure Code submits that since
the   appellant   has   already   filed   an   appeal   before   the   High
Court,   the   amount   of   fine   imposed   by   the   trial   court
automatically stands stayed till the decision of the appeal.
He submits that in the present case sentence of fine was also
imposed by the trial court which is the subject of the appeal,
hence Section 357(2) Cr.P.C. is attracted in the present case
and the High Court should not have directed the appellant to
deposit   the   fine   amount   awarded   by   the   trial   court   which
direction   is   in   the   teeth   of   provisions   of   Section   357(2)
Cr.P.C. Learned counsel for the appellant in support of his
submission   placed   reliance   on   the   judgment   of   this   Court
4
reported   in    Dilip   S.   Dahanukar   vs.   Kotak   Mahindra   Co.Ltd.
And another, (2007) 6 SCC 528.
7. Shri Aman Lekhi, learned Additional Solicitor General for
India   refuting   the   submission   of   learned   counsel   for   the
appellant contends that the High Court did not commit error in
directing the appellant to deposit the fine amount awarded by
the court below. He submits that provisions of Section 357(2)
Cr.P.C. is not attracted in the present case. He submits that
what is contemplated by sub­Section (2) of Section 357 Cr.P.C.
is “payment of the compensation as envisaged in Section 357(1)
Cr.P.C.”. He submits that stay of payment of compensation is
entirely different from the stay of fine which is a part of
sentence imposed on accused.
8. He   submits   that   this   Court   in  Stanny   Felix   Pinto   vs.
Jangid Builders Pvt. Ltd. and another, (2001) 2 SCC 416,  has
also upheld a similar order passed by the High Court where the
High   Court   directed   payment   of   rupees   four   lakhs   as   a
condition to suspend the sentence which was part of the fine
imposed as part of sentence.
9. Learned counsel for the appellant submits that judgment
of this Court in  Stanny Felix Pinto(supra) cannot be pressed
into service with regard to interpretation of Section 357(2)
Cr.P.C. which section is neither referred to nor adverted to
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by this Court in above case.
10.   We   have   considered   the   submissions   of   the   learned
counsel for the parties and perused the records.   From  the
facts brought on record, it is clear that the sentence awarded
to the appellant was a sentence of R.I. of five years with
payment of fine of Rs.25,000/­ and in default S.I. of three
months. The said sentence was recorded in four cases and all
sentences were to run concurrently. Thus, the fine was part of
the   sentence.   The   question   which   is   to   be   answered   in   the
present   case   is   as   to   whether   by   virtue   of   Section   357(2)
Cr.P.C.,   the   said   fine   which   was   part   of   sentence
automatically was stayed till the decision of the appeal and
would not have been directed by the High Court to be deposited
by the appellant.
11. For answering the question we need to reflect upon the
statutory   scheme   as   delineated   by   Section   357(2)   Cr.P.C.
Section 357(2) Cr.P.C. is part of Chapter XXVII­”THE JUDGMENT”
of   the       Criminal   Procedure   Code,   1973.   Section   353   deals
about   the   judgment,   its   pronouncement,   signatures,   delivery
and   other   aspects.   Section   354   deals   with   language   and
contents   of   judgment.   Section   355   refers   to   Metropolitan
Magistrate's   judgment.   Section   356   deals   with   order   for
notifying   address   of   previously   convicted   offender   and   then
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Section 357 bears heading “Order to pay compensation”. Order
to pay compensation, thus, is a part of judgment where Court
directs payment for compensation.
12. Section 357(1) Cr.P.C. contemplates that when a Court
imposes a sentence of fine or a sentence of which fine forms a
part, the Court may, while passing judgment, order the whole
or any part of the fine recovered to be applied. Section 357
is to the following effect:­
“357. Order to pay compensation.
(1) When  a  Court  imposes a sentence of fine
or a sentence (including a sentence of death)
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   of   the   Court,   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  1855),
entitled   to   recover   damages   from   the   person
sentenced for the loss resulting to them from
such death;
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(d) when   any   person   is   convicted   of   any
offence   which   includes   theft,   criminal
misappropriation,   criminal   breach   of   trust,
or   cheating,   or   of   having   dishonestly
received   or   retained,   or   of   having
voluntarily assisted in disposing of, stolen
property knowing or having reason to believe
the   same   to   be   stolen,   in   compensating   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.”
(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   form   a   part,   the   Court   may,
when   passing   judgment   order   the   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   Court   or   by   the   High
Court or Court of Session when exercising its
powers of revision.
(5) At  the time of awarding 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.”
13. All the circumstances in sub­section (1) of Section 357
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refer   to   direction   to   pay   compensation   out   of   the   fine
imposed. Thus, all the circumstances are circumstances where
fine   imposed   and   recovered   is   to   be   applied   in   the   above
circumstances.
14. The   fine   is   thus   contemplated   to   be   utilised   for
compensating different circumstances as enumerated in Section
357(1) Cr.P.C. Sub­Section (2) of Section 357 Cr.P.C. has been
engrafted  in reference to what was stated in sub­Section (1)
of Section 357 Cr.P.C.  Crucial words used in sub­Section (2)
of   Section   357   Cr.P.C.   are   “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”.   Thus,   what   is   prohibited   under   Section   357(2)
Cr.P.C. is that payment of compensation utilising the fine be
not paid till the period allowed for presenting the appeal has
elapsed, or if an appeal is filed then before the decision of
the   appeal.     It   does   not   involve   any   concept   of   stay   of
sentence.
15. Chapter XXIX deals with the appeals. In the said Chapter
Section   389   deals   with   the   subject   “suspension   of   sentence
pending the appeal; release of appellant on bail”. Section
389(1) Cr.P.C. empowers the Appellate Court to order that the
execution   of   the   sentence   or   order   appealed   against   be
9
suspended   and,   also,   if   he   is   in   confinement,   that   he   be
released on bail. Thus, the power of suspension of sentence
emanates   from   Section   389   Cr.P.C.   where   Appellate   Court   is
empowered to pass such an order. Sections 357 and 389 Cr.P.C.
operate in two different fields. Section 357 Cr.P.C. contains
an embargo that on passing a judgment of sentence of fine, the
fine   be   not   utilised   for   payment   of   compensation   till
contingency as mentioned therein does not occur. The sentence
awarded by the Court including sentence of fine is in no way
affected by embargo contained in Section 357(2) Cr.P.C. The
operation of Section 357(2) Cr.P.C. is restricted to payment
of   compensation   as   contemplated   by   Section   357(1)   and   (3)
Cr.P.C. The heading of the Section 357 Cr.P.C. i.e. “Order to
pay compensation” as well as contents of the Section lead to
only   one   conclusion   that   the   entire   provision   has   been
engrafted regarding payment of compensation out of the fine
imposed or when Court imposes sentence the fine is not part of
which, the Court may by way of compensation direct payment of
such amount to a person who has suffered the injury. We, thus,
are of the view that Section 357 Cr.P.C. has nothing to do
with suspension of sentence awarded by the trial court and the
sentence of fine imposed on the accused is in no way affected
by   Section   357(2)   Cr.P.C.   The   present   is   not   a   case   where
10
trial court has directed payment of any compensation to anyone
out   of   fine   imposed.   There   is   no   direction   for   payment   of
compensation in the order of the trial court nor present case
is covered by the circumstances mentioned in sub­clauses (a)
to (d) of Section 357(1) Cr.P.C. Present is also not a case of
Section   357(3)   Cr.P.C.   Hence,   there   is   no   question   of
applicability of Section 357(2) Cr.P.C. The heading of Section
357 Cr. P.C. throws considerable light in finding the object
and   purpose   of   the   Section.   Section   357   Cr.P.C.   is   only
attracted   when   Court   orders   for   payment   of   compensation.
Section 357 is not attracted in any other case. It is well
settled that heading of the Section plays a role when there is
any   doubt   in   interpretation   of   the   Section.   This   Court   in
Bhinka  and  others  vs.  Charan  Singh, AIR 1959  SC 960,  while
examining the role of a heading of section while interpreting
a section noticed the following principle;
“15......Section   180   provides   for   the
eviction of a person who but for the eviction
would become a hereditary tenant by efflux of
the   prescribed   time.   If   there   is   any
ambiguity — we find none — it is dispelled by
the heading given to the section and also the
description of  the  nature  of  the  suit  given
in the Schedule. The heading reads thus:
“Ejectment of person occupying land
without title.”
“Maxwell On Interpretation of Statutes, 10th
11
Edn., gives the scope of the user of such a
heading in the interpretation of a section
thus, at p. 50:
“The headings prefixed to sections or sets
of   sections   in   some   modern   statutes   are
regarded   as   preambles   to   those   sections.
They cannot control the plain words of the
statute   but   they   may   explain   ambiguous
words.”
If  there  is any doubt  in  the  interpretation
of   the   words   in   the   section,   the   heading
certainly   helps   us   to   resolve   that
doubt.......”
16. The   similar   proposition   was   again   reiterated   by
three­Judge Bench of this Court in  N.C. Dhoundial vs. Union
of India and others, (2004) 2 SCC 579, where in paragraph 15
following has been held:
“15......The   language   employed   in   the
marginal heading is another indicator that
it is a jurisdictional limitation. It is a
settled   rule   of   interpretation   that   the
section   heading   or   marginal   note   can   be
relied upon to clear any doubt or ambiguity
in the interpretation of the provision and
to   discern   the   legislative   intent   (vide
Uttam   Das   Chela   Sunder   Das   v.   Shiromani
Gurdwara Parbandhak Committee, (1996) 5 SCC
71 and Bhinka v. Charan Singh, AIR 1959 SC
960).”
17. Now we come to the judgment which has been relied on by
the   learned   counsel   for   the   appellant,   i.e.,  Dilip   S.
Dahanukar (supra).  In the above case this Court had occasion
to   interpret   Section   357   Cr.P.C.   The   appellant   therein   was
accused   No.2,   who   was   directed   to   pay   compensation   to   the
12
complainant of Rs.15 lakh apart from the simple imprisonment.
The facts have been noted in paragraph 3 of the judgment which
is to the following effect:
“3.  Accused   1,   M/s   Goodvalue   Marketing
Co.   Ltd.,   a   company   registered   and
incorporated   under   the   Companies   Act,   1956
and   Accused   2,   the   appellant   herein   were
convicted   for   commission   of   an   offence
involving   Section   138   of   the   Act   by   a
judgment   of   conviction   and   sentence   dated
23­2­2006 holding:
“Accused   1   company,   M/s   Goodvalue
Marketing   Co.   Ltd.   stands   convicted   for
the offence punishable under Section 138
read   with   Section   141   of   the   Negotiable
Instruments Act.
Accused 1 company is sentenced to pay a
fine   of   Rs   25,000   (Rupees   twenty­five
thousand only). In default of payment of
fine,   Accused   2   Mr   Dilip   Dahanukar,   the
Chairman of Accused 1 and representative
at   the   trial,   shall   suffer   SI   for   1
month.
Accused   2   Mr   Dilip   S.   Dahanukar,   stands
convicted   for   the   offence   punishable
under   Section   138   read   with   Section   141
of the Negotiable Instruments Act, 1881.
Accused 2 is sentenced to suffer SI for 1
month.
Accused 2 is also directed to pay compensation
to   the   complainant,   quantified   (sic)   at   Rs
15,00,000 (Rupees fifteen lakhs only),  under
Section 357(3) CrPC. Accused 2 is entitled to
pay   the   amount   of   compensation   in   two   equal
monthly instalments of Rs 7,50,000 each. The
first instalment of Rs 7,50,000 shall be paid
on   or   before   23­3­2006   and   the   second
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instalment of Rs 7,50,000 shall be paid on or
before 24­4­2006; in default of payment of the
amount of compensation Accused 2 shall suffer
further SI for 2 months.”
18. An appeal was preferred against the conviction order. The
Appellate   Court   while   admitting   the   appeal   directed   the
accused to deposit a sum of Rs.5 lakh each within four weeks
from the said date. Writ petition was filed questioning the
legality of the said order of the Appellate Court which was
dismissed and thereafter the matter was taken to this Court. A
submission was raised before this Court that having regard to
the   provisions   of   Section   357(2)   of   the   Code,   the   impugned
judgment is wholly unsustainable inasmuch as in terms thereof
the amount of fine imposed would automatically be suspended.
19. In the above case this Court considered sub­Sections (1),
(2)  and  (3)  of   Section    357  of   the   Code  and  observed   that
sub­Section   (2)   shall   be   applicable   both   in   regard   to
compensation as well as direction under sub­Section (3). In
paragraphs 43, 44 and 45 following has been laid down:
“43.  It   does   not   appeal   to   us   that
although   a   compensation   payable   out   of   the
quantum   of   fine   would   remain   stayed   under
sub­section (2) of Section 357 of the Code, if
a   compensation   is   directed   to   be   paid   under
sub­section   (3)   thereof,   the   same   would   not
attract   the   said   provision.   (See  P.   Suresh
Kumar v. R. Shankar, [(2007) 4 SCC 752].)
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44. Magistrates cannot award compensation
in addition to fine. When a fine is imposed,
however,   the   private   party   has   no   right   to
insist   that   compensation   may   be   awarded   to
him out of the amount of fine. The power to
award   compensation   under   Section   357(3)   is
not an ancillary power. It is an additional
power. (See Balraj v. State of U.P., [(1994)
4 SCC 29].)
45.  Clause   (b)   of   sub­section   (1)   of
Section   357   and   sub­section   (1)   of   Section
357 and sub­section (3) of Section 357 seek
to   achieve   the   same   purpose.   What   is
necessary   is   to   find   out   the   intention   of
the   lawmaker   and   the   object   sought   to   be
achieved.   Sub­section   (2)   of   Section   357
uses the word “fine”. It does not say that
what   would   be   stayed   i.e.   application   of
fine. Sub­section (2) of Section 357, in our
opinion,   does   not   contemplate   any   other
interpretation. Even assuming that Mr Lalit
was   correct   in   his   submission,   still   then
sub­section   (3)   would   be   squarely
attracted.”
20. Referring   to   Section   389   Cr.   P.C.,   this   Court   noticed
that suspension of a sentence and enlarging an appellant on
bail, who is convicted and realisation of fine has been dealt
with by Parliament under different provisions of the Code. In
paragraph 51 following has been laid down:
“51.  Section   389   does   not   deal   with
exactly   a   similar   situation.   Section   389   of
the   Code   is   to   be   read   with   Section   387
thereof.   Suspension   of   a   sentence   and
enlarging   an   appellant   on   bail,   who   is
convicted   and   realisation   of   fine   has   been
dealt   with   by   Parliament   under   different
provisions   of   the   Code.   The   power   of   the
court, thus, to suspend a sentence in regard
15
to   realisation   of   compensation   may   be
different   from   that   of   a   direction   in
realisation of fine.”
21. This   Court   in   the   aforesaid   case   has   noted   the
distinction between fine of Rs.25,000/­ which was imposed on
the Company and compensation of Rs.15 lakh which was directed
to be paid by the Chairman of the Company. In paragraph 71 the
aforesaid was mentioned to the following effect:
“71.  We   are   prima   facie   of   the   opinion
(without going into the merit of the appeal)
that the direction of the learned trial Judge
appears   to   be   somewhat   unreasonable.   The
appellant   herein   has   been   sentenced   to
imprisonment.   Only   fine   has   been   imposed   on
the   Company.   Thus,   for   all   intent   and
purpose, the learned trial Judge has invoked
both sub­sections (1) and (3) of Section 357
of  the  Code.  The  liability  of  the  appellant
herein   was   a   vicarious   one   in   terms   of
Section   141   of   the   Negotiable   Instruments
Act.   The   question   may   also   have   to   be
considered   from   the   angle   that   the   learned
trial Judge thought it fit to impose a fine
of Rs 25,000 only upon the Company. If that
be so, a question would arise as to whether
an amount of compensation for a sum of Rs 15
lakhs should have been directed to be paid by
the Chairman of the Company. We feel that it
is not.”
22. This Court ultimately directed the appellant to deposit
rupees   one   lakh   towards   the   compensation   and   recorded   its
conclusion in paragraph 72 which is to the following effect:
“72. We, therefore, are of the opinion:
16
(i) in a case of this nature, sub­section (2)
of   Section   357   of   the   Code   of   Criminal
Procedure   would   be   attracted   even   when   the
appellant was directed to pay compensation;
(ii)   the   appellate   court,   however,   while
suspending the sentence, was entitled to put
the appellant on terms. However, no such term
could   be   put   as   a   condition   precedent   for
entertaining   the   appeal   which   is   a
constitutional and statutory right;
(iii)   the   amount   of   compensation   must   be   a
reasonable sum;
(iv)   the   court,   while   fixing   such   amount,
must   have   regard   to   all   relevant   factors
including the one referred to in sub­section
(5)   of   Section   357   of   the   Code   of   Criminal
Procedure;
(v) no unreasonable amount of compensation can
be directed to be paid.”
23. This   Court,   in   the   above   case,   was   dealing   with   the
question of payment of compensation which was awarded by the
Court under sub­Section (3) of  Section 357 Cr.P.C. The Court
was not dealing with fine which was part of the sentence. The
Court, thus, had no occasion to consider the issue which has
arisen in the present case. We, in the present case, are not
concerned with payment of any compensation or applicability of
Section   357(2)   Cr.P.C.   with   regard   to   payment   of   any   such
compensation.
24. We   also   need   to   notice   the   judgment   of   this   Court   in
17
Stanny   Felix   Pinto   (supra).  In   the   above   case   along   with
sentence of imprisonment, fine was also imposed under Section
138 of the Negotiable Instruments Act. The High Court while
entertaining the revision granted suspension of the sentence
by   imposing   a   condition   that   part   of   the   fine   shall   be
remitted in court within a specified time which direction was
challenged   in   this   Court.   This   Court   upheld   the   said
direction. Following was held in paragraph 2:
“2.  When   a   person   was   convicted   under
Section 138 of the Negotiable Instruments Act
and   sentenced   to   imprisonment   and   fine   he
moved   the   superior   court   for   suspension   of
the   sentence.   The   High   Court   while
entertaining   his   revision   granted   suspension
of the sentence by imposing a condition that
part of the fine shall be remitted in court
within   a   specified   time.   It   is   against   the
said   direction   that   this   petition   has   been
filed. In our view the High Court has done it
correctly and in the interest of justice. We
feel   that   while   suspending   the   sentence   for
the   offence   under   Section   138   of   the
Negotiable   Instruments   Act   it   is   advisable
that  the  court  imposes  a  condition  that the
fine   part   is   remitted   within   a   certain
period.   If   the   fine   amount   is   heavy,   the
court  can  direct  at least  a portion thereof
to be remitted as the convicted person wants
the   sentence   to   be   suspended   during   the
pendency   of   the   appeal.   In   this   case   the
grievance   of   the   appellant   is   that   he   is
required   by   the   High   Court   to   remit   a   huge
amount of rupees four lakhs as a condition to
suspend   the   sentence.   When   considering   the
total   amount   of   fine   imposed   by   the   trial
court   (twenty   lakhs   of   rupees)   there   is
nothing unjust or unconscionable in imposing
such a condition. Hence, there is no need to
18
interfere with the impugned order. As such no
notice   need   be   issued   to   the   respondent.
Appeal is accordingly dismissed.”
25. It is true that this Court while deciding the said case
did not consider  Section 357(2) Cr.P.C. Learned counsel for
the   appellant   is   right   in   his   submission   that   the   above
judgment   cannot   be   held   to   be   laying   down   any   ratio   on
applicability of Section 357(2) Cr.P.C.
26. We may also refer to a judgment of Karnataka High Court
in Irrigation Engineering Company (India) Private Limited and
Anr. vs. The Small­Scale Industrial Development Bank of India
(SIDBI), 2003 (6) KarLJ 387, where while interpreting Section
357(2) Cr.P.C., Karnataka High Court had observed that word
“payment” found in Section 357(2) Cr.P.C. does not refer to
the 'deposit' of compensation or fine amount by the accused.
In the case before the High Court appellant was convicted with
sentence of fine. In appeal the High Court directed suspension
of sentence on the condition that the appellant shall deposit
20% of  the  total  fine  which was challenged  before  the  High
Court on the ground that in view of Section 357(2) Cr.P.C.,
Appellate Court was not right in asking them to deposit 20% of
the total fine. In paragraphs 8,9 and 10 following was stated:
“8.  What Section 357(2) of the Cr. P.C. says
is as under:
19
"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".
Nowhere   it   says   that   the   Court   of   Appeal,
while   suspending   sentence   imposed   on   an
accused,   cannot   impose   a   condition   of
depositing a part of fine amount. It is true
that  as per the decision  relied on  for  the
petitioners,   stay   engrafted   under   the   said
provision   of   law   equally   applies   to   the
compensation granted under Sub­section (3) of
Section   357   of   the   Code,   but   it   cannot   be
taken   to   hold   or   read   that   the   Appellate
Court   cannot   pass   a   conditional   order   for
suspending a sentence.
9.  According to me, the word "payment" found
in Section 357(2) of the Cr. P.C., does not
refer   to   the   'deposit'   of   compensation   or
fine amount by an accused in pursuance of an
order   passed   by   Appellate   Court   while
suspending   sentence   imposed   on   an   accused
since, to my mind, the word "payment" refers
to payment to be made to the person, who is
ordered to  be  paid  compensation and not the
fine amount, inclusive of compensation amount
to   be   'deposited'   by   accused.   The   stay
engrafted  into  the  said provision  of  law  is
with   reference   to   the   'payment'   of   such
amount   earlier   to   the   expiry   of   the   appeal
period   or,   where   appeal   has   been   preferred,
during   the   pendency   of   such   appeal.   So,
Section 357 need not and cannot be read with
Section 389 of the Cr. P.C. In fact, neither
the   petitioners/appellants   applied   for,   nor
the Appellate Court ordered suspension of the
sentence   relating   to   compensation   of   Rs.   16
lakhs   only.   On   the   other   hand,   when   the
suspension   of   impugned   sentence   passed
against them is seen with the power given to
the Appellate Court under Section 389 of the
20
Cr.   P.C.,   besides   the   ambit   or   scope   of
Section 357 of the Cr. P.C., there will not
be any difficulty in holding that there is no
error of record or infirmity or irregularity
or illegality in the impugned order passed by
the Court of Sessions suspending the sentence
on  condition  of depositing  20%  of  the  total
fine amount imposed on them (petitioners).
10.  In   this   view   of   the   matter,   neither
Section   357(2)   of   the   Cr.   P.C.   nor   the
decision relied on for the petitioners is of
any help to the petitioners.“
27. Learned   Counsel   for   the   appellant   has   relied   on   three
judgments of High Courts, one of Punjab and Haryana High Court
and   two   judgments   of   Patna   High   Court   in   support   of   his
submissions. We need to refer to above judgments relied by the
learned   counsel   for   the   appellant.   The   first   judgment   is
judgment   of   Punjab   and   Haryana   High   Court   reported   in  2006
(3) PLR 194, Kedar Nath versus State of Haryana. In the above
case, the petitioner was convicted for offence under Section
138 of the Negotiable Instruments Act, 1881 for dishonour of
several cheques amounting to Rs.1,50,000/­. The petitioner was
sentenced to undergo rigorous imprisonment for period of one
year and to pay a fine of Rs.3,00,000/­. It was also ordered
that out of fine of Rs.3,00,000/­, a sum of Rs.2,50,000/­be
given to the complainant as compensation. An appeal was filed
where Appellate Court suspended the sentence on the condition
21
that petitioner will deposit an amount of Rs.1,50,000/­ before
the trial court. The aforesaid condition was challenged by the
petitioner   in   the   High   Court.   It   was   submitted   that   in
accordance with Section 357 sub­section (2) Cr.P.C. petitioner
was   not   liable   to   pay   any   amount   of   fine.   The   High   Court
accepted the submission relying on Section 357 sub­section (2)
Cr.P.C.. In paragraph 8 of the judgment, following was held:
“8. Against the judgment of conviction and order to
sentence, an appeal was preferred by the petitioner,
which was admitted for hearing. While suspending the
sentence,   the   Appellate   Court   imposed   a   condition
for depositing an amount of Rs.1,50,000/­ out of the
amount   of   fine   of   Rs.3   lacs   imposed   by   the   trial
Court.   In   my   opinion,   by   imposing   the   said
condition, the petitioner was compelled to pay the
amount of fine, which according to sub­section (2)
of Section 357 Cr.P.C., the accused is not liable to
pay   till   the   final   adjudication   of   the   appeal.
Merely   because   out   of   the   amount   of   fine   of   Rs.3
lacs, Rs.2,50,000/­ was ordered to be paid to the
complainant as compensation, in my opinion, does not
change the nature of fine. The judgment of the trial
court  is   very  clear  that  a  fine  of  Rs.3  lacs   was
imposed   along   with   the   sentence   of   one   year.   The
facts   of   this   case   are   squarely   covered   by   the
decision   of   the   this   Court   in   Sabita   Behl’s
case(supra).   Thus,   in   my   opinion,   the   Appellate
Court was not justified while imposing the impugned
condition   directing   the   petitioner   to   deposit   an
amount   of   Rs.1,50,000/­   before   the   trial   Court   at
the time of furnishing the bail bonds in view of the
order   of   suspension   of   sentence   passed   by   the
Appellate Court.”
28. The   above   case   is   clearly   distinguishable   from   the
present case. In the above case, there was direction within
22
the meaning of Section 357 sub­section (1) (b) Cr.P.C. for
payment   of   compensation.   Hence   Section   357   sub­section   (2)
Cr.P.C. was relied  by  the  Court.  Present  is not a  case  of
payment of any compensation out of fine imposed on appellant.
Thus, the above case in no manner helps the appellant.
29. Now we come to the second case relied by the appellant
i.e. Division Bench Judgment of Patna High court in  Bharat
Mandal son of Sitaram Mandal & Ors. Vs. The State of Bihar,
2012 (2) PLJR 855.  In the above case accused were convicted
under   Section   307/149   IPC   and   Section   27   of   the   Arms   Act.
They   were   sentenced   for   life   imprisonment   and   further
directed to pay a fine of Rs.20,000/­ each. The appeal was
filed   in   which   the   Appellate   Court   declined   to   stay   the
payment of fine. The appellant pressed for stay of payment of
fine   which   was   considered   by   the   High   Court.   High   Court
relied   on   Section   357   sub­section   (2)   Cr.P.C.   and   accepted
the submission of the appellant that the fine was not to be
paid. Following was held in paragraph 7:
“7.   The   argument   of   Mr.   Yogesh   Chandra   Verma,
learned counsel for the appellant is based squarely
upon the literal interpretation from the Section.
In our view, the submission as made by Sri Verma
has   to   be   accepted.   On   the   plain   reading   of
sub­section   (2)   of   Section   357   of   the   Code   of
Criminal Procedure we find that there is absolutely
no ambiguity in the provision as engrafted by the
23
legislature, it clearly stipulates firstly, that no
such   payment   shall   be   made   before   the   period
allowed   for   presenting   the   appeal   has   elapsed.
Thus, this stops any court from enforcing payment,
for the period in which appeal could be filed. It
then secondly provides that the stay of action of
realization or payment would continue if an appeal
is   presented   till   the   decision   of   the   appeal.
“Decision of the Appeal” would only mean the final
judgment   in   the   appeal   and   not   any   order   at   any
interlocutory stage because that would not be the
decision of the appeal. Thus, on the plain reading
of Section 357(2) of the Code of Criminal Procedure
a   fine   imposed,   would   automatically   get   stayed
firstly for the period which is available to file
appeal and once the appeal is filed then till the
decision of the appeal. That is the mandate of the
legislature   itself,   clear   and   unambiguous.   The
situation   would   be   different,   if   instead   of
awarding fine, in terms of Section 357(3) of the
Code   of   Criminal   Procedure   compensation   only   is
awarded. In such a case, the appellate court has
judicial   discretion   to   stay   or,   not   to   stay   the
compensation so awarded depending upon the facts of
the case under consideration.”
30. From the facts noticed by the High Court it is not clear
as to whether the amount of fine Rs.20,000/­ was directed to
be paid to the victim. No such facts have been noticed in the
judgment. If there was no direction to pay any compensation
out   of   the   fine   imposed   the   facts   of   the   said   case   are
similar to the case in hand. We have taken the view that if
there   is   no   direction   to   pay   any   compensation   out   of   fine
imposed, Section 357(2) Cr.P.C. is not attracted. We are of
the view that the High Court's observation that in view of
Section   357   sub­section   (2)   of   Cr.P.C.   the   realisation   of
24
fine   would   automatically   get   stayed   does   not   take   into
consideration the distinction in a case where fine is part of
sentence and there is direction to pay compensation and in a
case where there is no direction to pay any compensation.
31. The   third   case   relied   by   the   learned   Counsel   for   the
appellant is again a Division Bench Judgment of Patna High
Court in Criminal Appeal (DB) No.529 of 2012, Naresh Yadav@
Naresh   Mahto   &   Ors.   Vs.   The   State   of   Bihar,   decided   on
26.06.2012. The Judgment of Patna High Court has been placed
on record along with the short submissions of learned counsel
for the appellant. A perusal of the judgment   indicate that
Patna High Court has not noticed the facts of the case and
the   nature   of   Order   passed   by   the   trial   Court   regarding
imposition of fine. The applicant prayed for modification of
Order of the High Court by which the direction was issued for
depositing the fine. Section 357 sub­section (2) Cr.P.C. was
relied and the Division Bench relying on earlier judgment of
Patna High Court in Bharat Mandal & Ors. (Supra) modified the
last paragraph of the Order dated 04.06.2012 providing that
the fine imposed shall remain stayed till the decision of the
case. The above judgment relies only on Bharat Mandal & Ors.
which has already been noted above by us hence this judgment
also does not help the appellant.
25
32. The   object   and   purpose   of   Section   357   Cr.P.C.   was
considered by this Court in Hari Singh vs. Sukhbir Singh and
others,   (1988)   4   SCC   551.  This   Court   held   that   the   power
given to the Court to direct for payment of compensation is
intended to do something for the victim. The provision was
held to be a step   forward in our criminal justice system.
Following were the observations made in paragraph 10:
"10...It   empowers   the   court   to   award
compensation   to   victims   while   passing
judgment   of   conviction.   In   addition   to
conviction,   the   court   may   order   the   accused
to pay some amount by way of compensation to
victim   who   has   suffered   by   the   action   of
accused. It may be noted that this power of
courts to award compensation is not ancillary
to   other   sentences   but   it   is   in   addition
thereto.   This   power   was   intended   to   do
something  to  reassure  the  victim  that  he  or
she is not forgotten in the criminal justice
system.   It   is   a   measure   of   responding
appropriately to crime as well of reconciling
the victim with the offender. It is, to some
extent, a constructive approach to crimes. It
is   indeed   a   step   forward   in   our   criminal
justice   system.   We,   therefore,   recommend   to
all   courts   to   exercise   this   power   liberally
so as to meet the ends of justice in a better
way.”
33. What   is   the   purpose   and   object   of   sub­Section   (2)   of
section   357   Cr.P.C.?   Section   357(1)   Cr.P.C.   contemplated
utilisation   of   fine   imposed   in   certain   circumstances   as
compensation to be paid to victim. Sub­section (2) engrafted
26
an embargo that such payment shall not be made till the period
allowed for appeal has elapsed or if the appeal is filed, till
the   same   is   decided.   Legislature   was   conscious   that
compensation paid if utilised, there may not be appropriate
measures to recover the said amount utilised from victim to
whom   the   compensation   is   paid   hence   embargo   in   payment   has
been engrafted in sub­section (2).   Thus at best sub­section
(2) of  Section  357  Cr.P.C.  is  a provision  which differs or
withholds   the   utilisation   of   the   amount   of   compensation
awarded till the limitation of appeal elapses or if filed till
it is decided.  The provision in no manner stays the sentence
of  fine during  the  pendency of  the  appeal.  The  purpose  for
which sub­section (2) of Section 357 Cr.P.C. has been enacted
is different as noted above and it never contemplates as stay
of sentence of fine imposed on accused.
34. We,   however,   make   it   clear   that   Appellate   Court   while
exercising   power   under   Section   389   Cr.P.C.   can   suspend   the
sentence   of   imprisonment   as   well   as   of   fine   without   any
condition   or   with   conditions.   There   are   no   fetters   on   the
power   of   the   Appellate   Court   while   exercising   jurisdiction
under   Section   389   Cr.P.C..   The   Appellate   Court   could   have
suspended the sentence and fine both or could have directed
for deposit of fine or part of fine.
27
35. Learned counsel for the appellant has also relied on the
judgment of this Court in  K.C. Sareen vs. C.B.I. Chandigarh,
(2001)   6   SCC   584,  where   this   Court   has   made   the   following
observation:
"No doubt when the appellate court admits
the   appeal   filed   in   challenge   of   the
conviction and sentence for the offence under
the   PC   Act,   the   superior   court   should
normally suspend the sentence of imprisonment
until disposal of the appeal, because refusal
thereof   would   render   the   very   appeal   otiose
unless such appeal could be heard soon after
the filing of the appeal.”
36. The   above   observation   was   made   by   this   Court   in   the
context of suspension of sentence of imprisonment. The present
is   not   a   case   where   question   of   suspension   of   sentence   of
imprisonment   is   involved   rather   Appellate   Court   has   already
suspended the sentence of imprisonment. The above case also
thus does not help the appellant in the facts of the present
case.
37. In view of the foregoing discussion, we are of the view
that Section 357(2) Cr.P.C. was not attracted in the present
case   since   there   was   no   direction   of   payment   of   any
compensation  out  of the fine  imposed  by the trial  court as
part of sentence. Section 357 Cr.P.C.(2) comes into play only
where any order of payment of compensation utilising the fine
imposed   as   sentence   under   Section   357(1)   Cr.P.C.   or
28
compensation as directed under Section 357(3) Cr.P.C. is made.
Present   being   neither   a   case   of   Section   357(1)   Cr.P.C.   nor
Section   357(3),   sub­section(2)   of   Section   357   Cr.P.C.   is
clearly   not   applicable   and   the   submissions   raised   by   the
learned counsel for the appellant are without any substance.
We, thus, do not find any infirmity in the impugned order of
the High Court where the High Court has directed the appellant
to deposit the fine awarded by the trial court. In the result,
the appeal is dismissed.
...............................J.
( A.K. SIKRI )
...............................J.
( ASHOK BHUSHAN )
NEW DELHI,
MARCH 23, 2018.

Train Examiner with the Indian Railways, = Department of Personnel and Training of the Government of India to try and make life after retirement easier for a government servant by having appropriate legislation enacted by Parliament or applicable Pension Rules rather than a khichdi of Instructions, Office Memoranda, Clarifications, Corrigenda and so on and so forth.

REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3173 OF 2018
(Arising out of S.L.P. (CIVIL) No. 5456 OF 2018)
 Union of India ...Appellant
Versus
 R. Sethumadhavan & Anr. ...Respondents
J U D G M E N T
Madan B. Lokur, J.
1. Leave granted.
2. More than 140 years ago, it was said by the Privy Council:
“These proceedings certainly illustrate what was said by Mr.
Doyne, and what has been often stated before, that the
difficulties of a litigant in India begin when he has obtained a
Decree.”1
 A somewhat similar fate seems to await government servants – on getting
retired, they have to struggle for the due pension. This is a classic case of
a railway employee who retired as a Train Examiner on 31st March, 1991
1 General Manager of the Raj Durbhunga, under the Court of Wards v.
Maharajah Coomar Ramaput Sing, (1871-2) Vol. XIV Moo, I.A.605
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 1 of 8
and his pension woes are being decided after 27 years and unfortunately
not in his favour.
3. We recommend to the Department of Personnel and Training of the
Government of India to try and make life after retirement easier for a
government servant by having appropriate legislation enacted by
Parliament or applicable Pension Rules rather than a khichdi of
Instructions, Office Memoranda, Clarifications, Corrigenda and so on and
so forth.
4. When the respondent retired as a Train Examiner with the Indian
Railways, he was in the pay scale of Rs. 1400–2300. After the 5th Central
Pay Commission was implemented, the replacement scale for the post of
Train Examiner (which was apparently abolished) became Rs.4500-7000.
5. According to the respondent the post of Train Examiner was
re-designated as Junior Engineer Grade-II and the revised pay of a Junior
Engineer Grade-II was recommended by the 5th Central Pay Commission
to be Rs. 5000-8000. The difference in the replacement scale of a Train
Examiner as against the revised scale in the case of Junior Engineer
Grade–II made a difference of about Rs. 500 per month in the pension
entitlement of the respondent.
6. On 30th September, 1997 a Policy Resolution was notified by the
Government of India relating to the scope and extent of the application of
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 2 of 8
the recommendations of the 5th Central Pay Commission and its
acceptance. This was followed by a large number of representations
from pensioners and resulted in the Government of India issuing an
Office Memorandum on 17th December, 1998 to the following effect:-
“The President is now pleased to decide that w.e.f. 1.1.1996,
pension of all pensioners irrespective of their date of retirement
shall not be less than 50% of the minimum pay in the revised
scale of pay introduced w.e.f. 1.1.1996 of the post last held by the
pensioner.”
7. It appears that the confusion continued and once again an Office
Memorandum was issued by the Government of India on 11th May, 2001
clarifying the earlier Office Memorandum. The clarification reads as
follows:-
“In the course of implementation of the above order, clarifications
have been sought by Ministries/Departments of the “post last
held” by the pensioner at the time of his/her superannuation. The
second sentence on O.M. dated 17.12.1998, i.e. “pension of all
pensioners irrespective of their date of retirement shall not be less
than 50% of the minimum pay in the revised scale of pay w.e.f.
1.1.1996 of the post last held by the pensioner”, shall mean that
pension of all pensioners irrespective of their date of retirement
shall not be less than 50% of the minimum of the corresponding
scale as 01.01.96, of the scale of pay held by the pensioner at the
time of superannuation/ retirement.”
8. The grievance of the respondent is directed against the
clarification dated 11th May, 2001 since the respondent felt the impact of
the clarification on his pension. He, therefore, preferred an Original
Application before the Central Administrative Tribunal for his rightful
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 3 of 8
pension. The question raised by the respondent as indeed by some others
was referred to a larger Bench of the Tribunal and the question referred
reads as follows:-
“When, the pre-revised pay scale of Rs. 1400-2300 attached to
the post of JE. II (TXR) in the Railways was revised to Rs.
5000-8000 (while the normal replacement pay scale for the
pre-revised pay scale of Rs. 1400-2300 is Rs. 4500-7500)
whether the pension admissible to the pre 01.01.1996 retirees
should be based on the pay scale of Rs. 5000-8000 or should be
restricted to that calculated on the basis of the pay scale of Rs.
4500-7000/-.”
9. By an elaborate judgment and order dated 31st October, 2011 the
Tribunal took the view that the respondent held the post of Train
Examiner on the date of his superannuation and his pension had been
correctly fixed on that basis. The replacement scale for the post of Train
Examiner was Rs. 4500-7000 with effect from 1st January, 1996. It was
held that the pension of the respondent could not be on par with the pay
scale of a Junior Engineer Grade-II. The reference was answered
accordingly.
10. While coming to this conclusion the Tribunal adverted to 20 or
more decisions rendered by various Benches of the Tribunal, several High
Courts and also few decisions of this Court. This is an indication of the
contest in store for pensioners when a claim for pension is made against
the State.
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 4 of 8
11. Be that as it may, the Tribunal eventually relied upon the decision
of this Court in K.S. Krishnaswamy & Ors. v. Union of India & Anr.
2
 to
dismiss the Original Application.
12. Feeling aggrieved by the judgment and order of the Tribunal, the
petitioner preferred W.P. No. 13207 of 2013 in the Madras High Court.
By the impugned judgment and order dated 2nd August, 2016 the High
Court allowed the writ petition and quashed the order passed by the
Tribunal. It is under these circumstances that the Union of India is before
us.
13. We have heard learned counsel for parties and find that the
Tribunal was right in relying upon the judgment and order passed by this
Court in Krishnaswamy. In this decision, the very question that arose
for consideration before the Tribunal and the High Court was dealt with,
though with reference to some other posts of the Government of India.
The question formulated by this Court in Krishnaswamy related to the
scale of pay recommended by the 5th Central Pay Commission and the
acceptance of the recommendations by the Government of India by a
policy decision dated 30th September, 1997 and the Office Memorandum
dated 17th December, 1998 clarified by the Office Memorandum dated
11th May, 2001. The basic question that arose for consideration was
whether the Office Memorandum dated 11th May, 2001 overrides the
2 (2006) 13 SCC 215
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 5 of 8
Office Memorandum dated 17th December, 1998 clarifying the policy
resolution of the Government of India dated 30th September, 1997.
14. While dealing with this question, this Court held in paragraphs 17
and 27 of the Report as follows:
“17. The main thrust of the submissions of learned counsel for
the appellants is that the OM dated 11-5-2001 overrides the
original OM dated 17-12-1998 and creates two classes of
pensioners. We are unable to accept this contention. As noticed
above, the recommendations of the Fifth Pay Commission were
accepted to the extent of policy resolution dated 30-9-1997. The
aforesaid Policy Resolution was further clarified by issuing
instructions in OM dated 17-12-1998, which were clarified by
another executive instructions in OM dated 11-5-2001. It is
well-settled principle of law that recommendations of the Pay
Commission are subject to the acceptance/rejection with
modifications of the appropriate Government. It is also
well-settled principle of law that a policy decision of the
Government can be reviewed/altered/modified by executive
instructions. It is in these circumstances that a policy decision
cannot be challenged on the ground of estoppel. In the present
case, the recommendations of the Fifth Pay Commission were
accepted by a Policy Resolution dated 30-9-1997 that the ceiling
on the amount of pension will be 50% of the highest pay in the
Government. The pension of all pre-1-1-1996 retirees including
pre-1986 retirees shall be consolidated as on 1-1-1996, but the
consolidated pension shall not be brought on to the level of 50%
of the minimum of the revised pay of the post held by the
pensioner at the time of retirement. The subsequent OM dated
17-12-1998 clarified the Policy Resolution dated 30-9-1997 by
executive instructions in OM dated 17-12-1998 and further
clarified in the form of OM dated 11-5-2001 clarifying the
contents of Policy Resolution of the Government dated
30-9-1997. They are both complementary to each other. Both
clarify the government Policy Resolution dated 30-9-1997. The
appellants are not aggrieved by the executive instructions in OM
dated 17-12-1998. In our view, therefore, the contention of the
appellant that the OM dated 11-5-2001 overrides the original
OM dated 17-12-1998, thereby creating two classes of
pensioners is absolutely ill-founded and untenable.
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 6 of 8
27. For the reasons aforestated, the view taken by the Madras
High Court that the clarificatory executive instructions in OM
dated 11-5-2001 are an integral part of the OM dated
17-12-1998 clarifying the policy resolution of the Government
dated 30-9-1997 and do not override the original OM dated
17-12-1998 is correct law and it is, accordingly, affirmed. The
view taken by the Delhi High Court that OM dated 11-5-2001
overrides the original OM dated 17-12-1998 and creates two
classes of pensioners does not lay down the correct law and is,
hereby, set aside.”
 15. Unfortunately, the High Court has not even referred to this
judgment while taking a decision in favour of the respondent. Since the
issue is squarely covered by the decision of this Court in Krishnaswamy,
the appeal must be allowed.
16. Yet another error made by the High Court is in assuming that the
post of Train Examiner was re-designated as Junior Engineer Grade-II.
There is nothing on record to suggest the re-designation. In fact the
conclusion of re-designation is the sole basis on which the writ petition
was allowed by the High Court and as mentioned above, we do not find
any material on record to suggest the re-designation. Consequently, the
entire basis of the decision of the High Court is erroneous, apart from the
fact that the High Court did not advert to the decision of this Court in
Krishnaswamy on the subject.
17. In the circumstances, we have no option but to set aside the
impugned judgment and order of the Madras High Court and we do so
accordingly. The appeal is allowed.
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 7 of 8
18. In case any payments have been made to the respondent, there will
be no recovery of these amounts.
19. A copy of this order be sent to the Secretary, Department of
Personnel and Training of the Government of India.
………………………J
(Madan B. Lokur)

...……………………..J
New Delhi; (Deepak Gupta)
March 22, 2018
 C.A. No.__________of 2018 (Arising out of S.L.P. (C) No. 5456 of 2018)
Page 8 of 8

Partition list admissible for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds = whether the document dated 09.09.1994 which was inadmissible in evidence could have been used for any collateral purpose. In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of 10 various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. Further, an unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. = whether these can be used for any collateral purpose. The larger Bench of the Andhra Pradesh High Court in Chinnappareddigari Peda Mutyala Reddy v. Chinnappareddigari Venkata Reddy(AIR 1969 AP 242) has held that the whole process of partition contemplates three phases i.e. severancy of status, division of joint property by metes and bounds and nature of possession of various shares. In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. Hence, if the appellant­defendant want to mark these documents for collateral purpose it is open for them to pay the stamp duty together with penalty and get the document impounded and the trial court is at liberty to mark Exts. B­21 and B­22 for collateral purpose subject to proof and relevance. Following the law laid down by this Court in the above case, we are of the opinion that document dated 09.09.1994 may be admissible in evidence for collateral purpose provided the appellant get the document impounded and to pay the stamp duty together with penalty as has been directed in the above case.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO................OF 2018
(ARISING OUT OF SLP(C)NO.11067 OF 2017)
SITA RAM BHAMA                       … PETITIONER
VERSUS
RAMVATAR BHAMA         … RESPONDENT
J U D G M E N T
ASHOK BHUSHAN, J.
The appellant, who was plaintiff in Civil Suit No.4 of
2011, has filed this appeal questioning the judgment of the
High   Court   of   Judicature   for   Rajasthan   at   Jodhpur   dated
23.01.2017   by   which   writ   petition   filed   by   the   appellant
against the order dated 03.03.2015 of the Additional District
Judge has been dismissed.
2. Brief facts of the case which are necessary to be noted
for deciding this appeal are:
We shall refer the parties as described in the plaint.
Plaintiff and respondent are real brothers being sons of late
2
Devi Dutt Ji Verma. Plaintiff's case is that his father Devi
Dutt Verma on 25.10.1992 decided to divide his self­acquired
movable   and   immovable   properties   between   plaintiff   and
defendant.   The   late   father,   however,   did   not   execute   any
settlement   deed.   Devi   Dutt   Verma   died   on   10.09.1993   and
thereafter   on   09.09.1994   plaintiff   and   defendant   recorded   a
memorandum of settlement as decided by their father regarding
his self­acquired properties. The memorandum of settlement was
signed by mother of the parties as well two sisters had signed
as   witnesses.   According   to   memorandum   of   settlement   both
residential   house   as   well   as   shop   in   the   Aguna   Bazar   were
distributed as decided by their late father.
3. A   Civil   Suit   No.5   of   2010   was   filed   by   the   plaintiff
praying for partition of the residential house as well as the
shop. In the suit an application under Order VII Rule 11 of
the Civil Procedure Code was filed by the defendant, Ramvatar
Bhama taking the plea that on 25.10.1992 during the life time
of   Shri   Devi   Dutt   Verma,   the   father   of   the   plaintiff   and
defendant, had partitioned the house and the shop. Southern
portion of the house came in the share of the plaintiff and
northern   part   came   in   the   share   of   the   defendant.   In
confirmation   of   the   earlier   partition   dated   25.10.1992   the
3
family   settlement   dated   09.09.1994   was   executed   which   was
signed   by   the   plaintiff   and   defendant   along   with   both   the
sisters  as well as mother. It was pleaded by the defendant,
in view of the aforesaid, that there was no cause of action
for the plaintiff to file a partition suit. Defendant prayed
that suit of the plaintiff is liable to be dismissed.
4. The trial court vide its order dated 19.01.2011 allowed
the application filed by the defendant under Order VII Rule 11
CPC   and   dismissed   the   suit   for   want   of   cause   of   action   in
favour of the plaintiff. The civil court accepted the case of
the defendant that the parties which were in joint family have
been divided, there being nothing joint between the parties,
there is no cause of action for the plaintiff for filing the
suit for partition. The relief for permanent injunction was
also held to be related to the partition.
5. Another   Civil   Suit   No.4   of   2011   was   filed   by   the
plaintiff claiming that after dismissal of the earlier suit of
the plaintiff on 19.01.2011, defendant broke open the lock of
the house and took possession of the house. Plaintiff prayed
for   decree   of   possession   against   the   defendant   as   well   as
decree   of   permanent   injunction.   Plaintiff   also   sought   for
4
mesne profit and expenses.
6. In   the   suit,   plaintiff   has   filed   the   document   dated
09.09.1994 evidencing family settlement which was claimed by
the   plaintiff   as   memorandum   of   settlement.   An   application
under Order XIII Rule 3 CPC and Article 45 and Section 35 of
the   Indian   Stamp   Act   and   Sections   17   and   49   of   the   Indian
Registration   Act,   was   filed   by   the   defendant   claiming   that
document dated 09.09.1994 being not a registered document and
being not properly stamped is not admissible in evidence, same
may be rejected. The application was replied by the plaintiff.
The trial court vide its order dated 03.03.2015 allowed the
application of the defendant holding that the document dated
09.09.1994 is a family settlement deed and a relinquishment
document   which   is   not   admissible   as   evidence   being
inadequately   stamped   and   not   being   registered.   Against   the
said   order   dated   03.03.2015   writ   petition   was   filed   by   the
plaintiff which was dismissed by the High Court upholding the
order of the trial court. The High Court also took the view
that so called family settlement takes away the share of the
sisters   and   mother,   therefore,   the   same   was   compulsorily
registrable. Aggrieved by the said order, the plaintiff has
come up in this appeal.
5
7. Shri Ajit Kumar Sinha, learned senior counsel, appearing
for the appellant submits that document dated 09.09.1994 is
only a memorandum of partition which took place on 25.10.1992
when father of the parties had partitioned the house and the
shop. The memorandum of family settlement is not compulsorily
registrable. The document itself being not a family settlement
rather only a memorandum ought to have been accepted by the
trial court. He further submits that in the earlier suit filed
by   the   plaintiff   being   Suit   No.5   of   2010,   the   suit   was
dismissed   under   Order   VII   Rule   11   CPC   on   the   plea   of   the
defendant that the partition has already taken place between
the parties as claimed by the plaintiff, hence,  no cause of
action has arisen for filing a suit for partition. He submits
that   partition   effected   by   the   father   of   the   parties   on
25.10.1992   which   was   subsequently   recorded   on   09.09.1994
having already been accepted, it is not open for trial court
to   reject   the   document   dated   09.09.1994   for   being   taken   in
evidence. It is submitted that by order of the court below the
plaintiff has become remedy­less.
8. Learned   counsel   for   the   respondent   refuting   the
submission of the learned counsel for the appellant contends
that the trial court as well as the High Court has rightly
6
come   to   the   conclusion   that   document   dated   09.09.1994   was
compulsorily registrable. It being neither registered nor duly
stamped   has   rightly   been   rejected   by   the   trial   court   from
being taken in evidence. He submits that the High Court has
rightly dismissed the writ petition filed by the plaintiff.
9. We   have   considered   the   submissions   of   the   parties   and
perused the records.
10. The   only   question   which   needs   to   be   considered   in   the
present case is as to whether document dated 09.09.1994 could
have  been  accepted  by  the  trial court  in  evidence  or  trial
court   has   rightly   held   the   said   document   inadmissible.   The
plaintiff claimed the document dated 09.09.1994 as memorandum
of   family   settlement.   Plaintiff's   case   is   that   earlier
partition took place in the life time of the father of the
parties   on   25.10.1992   which   was   recorded   as   memorandum   of
family   settlement   on   09.09.1994.   There   are   more   than   one
reasons   due   to   which   we   are   of   the   view   that   the   document
dated 09.09.1994 was not mere memorandum of family settlement
rather a family settlement itself. Firstly, on 25.10.1992, the
father of the parties was himself owner of both, the residence
and shop being self­acquired properties of Devi Dutt Verma.
The  High Court has rightly held that the said document cannot
be said to be a Will, so that father could have made Will in
7
favour of his two sons, plaintiff and defendant. Neither the
plaintiff nor defendant had any share in the property on the
day   when   it   is   said   to   have   been   partitioned   by   Devi   Dutt
Verma.   Devi   Dutt   Verma   died   on   10.09.1993.   After   his   death
plaintiff,   defendant   and   their   mother   as   well   as   sisters
become   the   legal   heirs   under   Hindu   Succession   Act,   1955
inheriting   the   property   being   a   class   I   heir.   The   document
dated 09.09.1994 divided the entire property between plaintiff
and defendant which document is also claimed to be signed by
their   mother   as   well   as   the   sisters.   In   any   view   of   the
matter, there is relinquishment of the rights of other heirs
of   the   properties,   hence,   courts   below   are   right   in   their
conclusion that there being relinquishment, the document dated
09.09.1994   was   compulsorily   registrable   under   Section   17   of
the Registration Act.
11. Pertaining to family settlement, a memorandum of family
settlement and its necessity of registration, the law has been
settled   by   this   Court.   It   is   sufficient   to   refer   to   the
judgment of this Court in Kale and others vs. Deputy Director
of   Consolidation   and   others,   (1976)   3   SCC   119.   The
propositions   with   regard   to   family   settlement,   its
registration were laid down by this Court in paragraphs 10 and
11:
8
“10. In other words to put the binding effect
and the essentials of a family settlement in a
concretised   form,   the   matter   may   be   reduced
into the form of the following propositions:
(1) The family settlement must be a bona fide
one so as to resolve family disputes and rival
claims   by   a   fair   and   equitable   division   or
allotment   of   properties   between   the   various
members of the family;
(2) The said settlement must be voluntary and
should   not   be   induced   by   fraud,   coercion   or
undue influence;
(3) The family arrangement may be even oral
in which case no registration is necessary;
(4)   It   is   well   settled   that   registration
would   be   necessary   only   if   the   terms   of   the
family   arrangement   are   reduced   into   writing.
Here also, a distinction should be made between
a document containing the terms and recitals of
a   family   arrangement   made  under   the   document
and a mere memorandum prepared after the family
arrangement   had   already   been   made   either   for
the purpose of the record or for information of
the   court   for   making   necessary   mutation.   In
such   a   case   the   memorandum   itself   does   not
create   or   extinguish   any   rights   in   immovable
properties  and therefore does not fall within
the   mischief   of   Section   17(2)   of   the
Registration   Act   and   is,   therefore,   not
compulsorily registrable;
(5)   The   members   who   may   be   parties   to   the
family   arrangement   must   have   some   antecedent
title, claim or interest even a possible claim
in   the   property   which   is   acknowledged   by   the
parties to the settlement. Even if one of the
parties   to   the   settlement   has   no   title   but
under   the   arrangement   the   other   party
relinquishes all its claims or titles in favour
of such a person and acknowledges him to be the
sole owner, then the antecedent title must be
assumed   and   the   family   arrangement   will   be
9
upheld and the courts will find no difficulty
in giving assent to the same;
(6)   Even   if   bona   fide   disputes,   present   or
possible,   which   may   not   involve   legal   claims
are settled by a bona fide family arrangement
which   is   fair   and   equitable   the   family
arrangement is final and binding on the parties
to the settlement.
11. The principles indicated above have been
clearly enunciated and adroitly adumbrated in a
long course of decisions of this Court as also
those   of   the   Privy   Council   and   other   High
Courts, which we shall discuss presently.”
12. We are, thus, in full agreement with the view taken by
the trial court as well as the High Court that the document
dated   09.09.1994   was   compulsorily   registrable.   The   document
also   being   not   stamped   could   not   have   been   accepted   in
evidence   and   order   of   trial   court   allowing   the   application
under Order XII Rule 3 CPC and the reasons given by the trial
court in allowing the application   of the defendant holding
the document as inadmissible cannot be faulted.
13. There   is   only   one   aspect   of   the   matter   which   needs
consideration,   i.e.,   whether   the   document   dated   09.09.1994
which was inadmissible in evidence could have been used for
any   collateral   purpose.   In   a   suit   for   partition,   an
unregistered   document   can   be   relied   upon   for   collateral
purpose   i.e.   severancy   of   title,   nature   of   possession   of
10
various shares but not for the primary purpose i.e. division
of joint properties by metes and bounds. Further, an unstamped
instrument is not admissible in evidence even for collateral
purpose,   until   the   same   is   impounded.   A   two­Judge   Bench
judgment of this Court in  Yellapu Uma Maheswari and another
vs. Buddha Jagadheeswararao and others, (2015) 16 SCC 787, is
appropriate. In the above case also admissibility of documents
Ext. B­21 dated 05.06.1975 a deed of memorandum and Ext. B­22
dated   04.06.1975   being   an   agreement   between   one   late
Mahalakshamma,   respondent   No.1­plaintiff   and   appellant
No.1­defendant   came   for   consideration.   Objection   was   taken
regarding   admissibility   which   was   upheld   both   by   the   High
Court and trial court. Matter was taken up by this Court. In
the above case, this Court held that the nomenclature given to
the   document   is   not   decisive   factor   but   the   nature   and
substance   of   the   transaction   has   to   be   determined   with
reference   to   the   terms   of   the   documents.   This   Court   after
considering both the documents, B­21 and B­22 held that they
require registration. In paragraph 15 following was held:
“15. It is well settled that the nomenclature
given   to   the   document   is   not   decisive   factor
but the nature and substance of the transaction
has   to   be   determined   with   reference   to   the
terms   of   the   documents   and   that   the
admissibility   of   a   document   is   entirely
dependent upon the  recitals contained in  that
document but not on the basis of the pleadings
11
set up by the party who seeks to introduce the
document   in   question.   A   thorough   reading   of
both   Exts.   B­21   and   B­22   makes   it   very   clear
that   there   is   relinquishment   of   right   in
respect   of   immovable   property   through   a
document   which   is   compulsorily   registrable
document and if the same is not registered, it
becomes   an   inadmissible   document   as   envisaged
under   Section   49   of   the   Registration   Act.
Hence,   Exts.   B­21   and   B­22   are   the   documents
which squarely fall within the ambit of Section
17(1)(b) of the Registration Act and hence are
compulsorily registrable documents and the same
are inadmissible in evidence for the purpose of
proving   the   factum   of   partition   between   the
parties. We are of the considered opinion that
Exts.   B­21   and   B­22   are   not   admissible   in
evidence   for   the   purpose   of   proving   primary
purpose of partition.”
14. After   holding   the   said   documents   as   inadmissible,   this
Court further proceeded to consider the question as to whether
the documents  B­21  and  B­22 can be  used for any collateral
purpose.   In   the   above   context   the   Court   accepted   the
submission of the appellant that the documents can be looked
into   for   collateral   purpose   provided   appellant­defendant   to
pay the stamp duty together with penalty and get the document
impounded.   In   paragraphs   16   and   17   following   has   been   laid
down:
“16.  Then   the   next   question   that   falls   for
consideration is whether these can be used for
any collateral purpose. The larger Bench of the
Andhra Pradesh High Court in Chinnappareddigari
Peda   Mutyala   Reddy  v.  Chinnappareddigari
Venkata   Reddy(AIR   1969   AP   242)  has   held   that
12
the   whole   process   of   partition   contemplates
three phases i.e. severancy of status, division
of   joint   property   by   metes   and   bounds   and
nature   of   possession   of   various   shares.   In   a
suit   for   partition,   an   unregistered   document
can be relied upon for collateral purpose i.e.
severancy   of   title,   nature   of   possession   of
various shares but not for the primary purpose
i.e. division of joint properties by metes and
bounds.   An   unstamped   instrument   is   not
admissible   in   evidence   even   for   collateral
purpose, until the same is impounded. Hence, if
the   appellant­defendant   want   to   mark   these
documents for collateral purpose it is open for
them   to   pay   the   stamp   duty   together   with
penalty and get the document impounded and the
trial   court   is   at   liberty   to   mark   Exts.   B­21
and   B­22   for   collateral   purpose   subject   to
proof and relevance.
17.  Accordingly, the civil appeal is partly
allowed   holding   that   Exts.   B­21   and   B­22   are
admissible   in   evidence   for   collateral   purpose
subject   to   payment   of   stamp   duty,   penalty,
proof and relevancy.”
15. Following the law laid down by this Court in the above
case, we are of the opinion that document dated 09.09.1994 may
be admissible in evidence for collateral purpose provided the
appellant get the document impounded and to pay the stamp duty
together with penalty as has been directed in the above case.
16. In   the   result,   this   appeal   is   partly   allowed   in   the
following manner:
The order of the trial court as well as the High Court
holding   that   the   document   dated   09.09.1994     required
13
compulsory   registration   is   upheld.   Following   the   aforesaid
view   of   this   Court   in  Yellapu   Uma   Maheswari   (supra),  this
appeal is partly allowed holding that deed dated 09.09.1994 is
admissible   in   evidence   for   collateral   purpose   subject   to
payment of stamp duty and penalty.
...............................J.
( A.K. SIKRI )
...............................J.
( ASHOK BHUSHAN )
NEW DELHI,
MARCH 23, 2018.

suit for partition and separate possession of half share in the suit scheduled property. It is her case that the property originally belonged to her grandfather Banshi Dhar. After Banshi Dhar’s death, her father Dharam Singh and her paternal uncle Mathura Prasad have succeeded to the said property and after the death of her father Dharam Singh, she is entitled for half share in the said property. Dharam Singh had executed a sale deed in respect of his fifty per cent share in the said property in favour of the first defendant. The plaintiff filed a reply to the written statement contending that the sale deed said to have been executed by Dharam Singh has been obtained by fraud and mis-representation and hence, the said sale deed is not binding upon her.= It cannot be held that the sale deed dated 11.07.1991 executed by Dharam Singh was obtained by fraud or by mis-representation. It is clear that when the sale deed was executed by Dharam Singh, he was having sound state of mind. The Sub-Registrar, who had registered the documents was examined as DW-3. In his evidence he stated that the sale deed was executed by Dharam Singh after he had explained to the parties about contents of the said deed. Ex. D-1 was attested by PW-2 and PW-3. They have nowhere stated in their statements that Dharam Singh was not in good state of mind at the time of the execution of the document. Though it is contended on behalf of the appellant that Dharam Singh was not keeping well, no medical evidence has been produced in support of the said contention. We do not find any ground to interfere with the judgment of the High Court.

1
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURSIDCITON
CIVIL APPEAL NO.2367 OF 2010
KRISHNA DEVI … APPELLANT
VERSUS
KESHRI NANDAN … RESPONDENT
J U D G M E N T
S.ABDUL NAZEER, J.
1. Parties in this appeal are close relatives. Krishna Devi, the
appellant/plaintiff is the daughter of Dharam Singh. Mathura Prasad, the second
defendant was the brother of Dharam Singh and Keshri Nandan
respondent/defendant No. 1 is the son of Mathura Prasad. The appellant filed the
suit O.S No. 196/1992 against Keshri Nandan and Mathura Prasad for partition and
separate possession of half share in the suit scheduled property. It is her case that
the property originally belonged to her grandfather Banshi Dhar. After Banshi
Dhar’s death, her father Dharam Singh and her paternal uncle Mathura Prasad have
2
succeeded to the said property and after the death of her father Dharam Singh, she
is entitled for half share in the said property.
2. The defendants have opposed the suit. It is contended that Dharam Singh
had executed a sale deed in respect of his fifty per cent share in the said property in
favour of the first defendant. The plaintiff filed a reply to the written statement
contending that the sale deed said to have been executed by Dharam Singh has
been obtained by fraud and mis-representation and hence, the said sale deed is not
binding upon her.
3. The trial court on appreciation of materials on record held that the sale deed
said to have been executed by Dharam Singh did not confer any right, title or
interest on the defendants. Consequently, the suit was decreed. The defendants
challenged the said decree by filing Civil Appeal No. 60 of 2001 before the
Additional District Judge, Gurgaon. The first Appellate Court set aside the
judgment of the trial court and allowed the appeal. The second appeal filed by the
appellant/plaintiff was dismissed by the High Court.
4. Having heard the learned counsel for the parties, we do not find any merit in
this appeal. It cannot be held that the sale deed dated 11.07.1991 executed by
Dharam Singh was obtained by fraud or by mis-representation. It is clear that
when the sale deed was executed by Dharam Singh, he was having sound state of
mind. The Sub-Registrar, who had registered the documents was examined as
3
DW-3. In his evidence he stated that the sale deed was executed by Dharam Singh
after he had explained to the parties about contents of the said deed. Ex. D-1 was
attested by PW-2 and PW-3. They have nowhere stated in their statements that
Dharam Singh was not in good state of mind at the time of the execution of the
document. Though it is contended on behalf of the appellant that Dharam Singh
was not keeping well, no medical evidence has been produced in support of the
said contention. We do not find any ground to interfere with the judgment of the
High Court.
5. Consequently, the appeal is dismissed, with no orders as to costs.


……………………………J.
 (N.V. RAMANA)

……………………………J.
 (S. ABDUL NAZEER)
New Delhi;
March 21, 2018.