Cheque dishonour sentencing must serve a compensatory purpose, with fine and compensation aligned to the cheque amount.

In prosecutions for cheque dishonour under Section 138 of the Negotiable Instruments Act, sentencing should reflect the compensatory purpose of the provision, not merely punishment. Where fine is imposed, the criminal court may direct payment of compensation under Section 357(1)(b) CrPC, and the fine may be calibrated to secure payment of the cheque amount, up to the statutory limit of twice the cheque amount. A nominal fine unrelated to the cheque amount was treated as inconsistent with that object. The sentence was therefore enhanced to the cheque amount with an additional amount directed as compensation.

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Issues: Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the appellate sentence of a nominal fine could be interfered with and enhanced to a fine commensurate with the cheque amount along with compensation under the Code of Criminal Procedure, 1973.

Analysis: Section 138 of the Negotiable Instruments Act, 1881 permits the criminal court, on conviction, to impose imprisonment or fine or both, and the object of the provision is not merely punitive but also compensatory. The sentencing power in cheque dishonour cases is intended to secure payment of the cheque amount, and the court may award fine up to twice the cheque amount and direct the amount to be paid as compensation. The power under Section 357(1)(b) of the Code of Criminal Procedure, 1973 is available where fine is imposed, and in such cases the approach should be practical, realistic, and consistent with the compensatory object of the provision. A nominal fine unconnected with the cheque amount was found to be unjustified on the facts.

Conclusion: The sentence of fine was enhanced to the cheque amount with an additional amount towards compensation, and the criminal revision was allowed in part in favour of the complainant.

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