Cheque dishonour sentencing should prioritise compensation, with realistic fines and minimal imprisonment to secure restitution.

In cheque dishonour sentencing, courts should exercise discretion under Section 138 of the Negotiable Instruments Act in line with the statutory object of deterrence and restitution, giving primacy to the compensatory element of the remedy. The article notes that Section 357 of the CrPC supports compensation to the payee and that a practical, realistic fine linked to the cheque amount, with due regard to interest and any amount already paid, is ordinarily preferred. Imprisonment should remain minimal unless circumstances require otherwise. The compensation imposed in the discussed matter was treated as inadequate and the sentence was sent back for reconsideration.

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Issues: Whether, upon conviction for dishonour of cheque, the sentencing court must give primacy to the compensatory aspect of the remedy and impose a fine commensurate with the cheque amount so that the complainant can be adequately compensated, and whether the sentence imposed in the present case required interference and reconsideration.

Analysis: Section 138 of the Negotiable Instruments Act, 1881 confers discretion on the criminal court to impose imprisonment, fine, or both, but that discretion has to be exercised in light of the object of Chapter XVII, namely to deter cheque dishonour and secure payment to the payee. The compensatory element is central to the statutory scheme, and the power under Section 357 of the Code of Criminal Procedure, 1973 is meant to ensure restitution to the complainant. The judgment relies on settled principles that in cheque dishonour cases courts should ordinarily prefer a practical and realistic fine linked to the cheque amount, with due regard to interest and any amount already paid during trial, while keeping imprisonment to the minimum unless circumstances require otherwise.

Conclusion: The sentence of compensation imposed by the trial court was found inadequate and inconsistent with the compensatory object of the statute, and the matter was sent back for fresh consideration of sentence.

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