Cheque dishonour compensation may extend up to twice the cheque amount, but remains subject to practical, fact-based assessment.

In cheque dishonour prosecutions under Section 138 of the Negotiable Instruments Act, compensation should normally be assessed up to twice the cheque amount, but only on a practical and fact-sensitive basis that reflects restitution and the circumstances of the case. Here, the complaint arose from a cheque issued towards repayment of lease-related dues; the trial court convicted the accused, and the appellate court affirmed conviction while substantially increasing the fine. The revisional challenge sought still further enhancement, but the court found no sufficient ground to interfere further in exercise of inherent powers, as the appellate enhancement was already substantial.

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Issues: Whether the order enhancing the fine amount to one crore rupees in a conviction under Section 138 of the Negotiable Instruments Act, 1881 required interference under Section 482 of the Code of Criminal Procedure, 1973 on the ground that compensation ought to have been enhanced to twice the cheque amount with interest and costs.

Analysis: The complaint was founded on dishonour of a cheque issued towards repayment of the balance amount due under a lease transaction. The trial court convicted the accused under Section 138 of the Negotiable Instruments Act, 1881 and imposed imprisonment with a nominal fine, while the appellate court affirmed the conviction and enhanced the fine to one crore rupees. The revision petition sought further enhancement to twice the cheque amount. The governing principle, as applied in the judgment, is that in cheque dishonour cases the power to award compensation should normally be exercised up to twice the cheque amount, with due regard to the facts and circumstances and to a practical and realistic assessment of restitution. On the facts, the court found that the appellate court had already enhanced the fine substantially and there was no justifiable ground to interfere further in exercise of inherent powers.

Conclusion: The request for further enhancement of compensation was rejected and the order under challenge was upheld.

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