2022 (9) TMI 383 - HC - Indian Laws

High Court Upholds Rs.1 Crore Fine in Dishonoured Cheque Case

M/s. Infotech Enterprises Ltd. Versus The State Of Telangana & Another Sri Sayed Wajid Abid,

The High Court upheld the Sessions Judge's decision to enhance the fine to Rs.1 crore in a case involving dishonoured cheques under Section 138 of the ... Dishonor of Cheque - enhancement of fine amount equivalent to twice the cheque amount i.e., Rs.2 crores along with interest and costs - Section 138 of the NI Act - HELD THAT:- Section 138 of the NI Act provides that where the drawer of the cheque fails to make payment, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of the Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both. The learned Sessions Judge has categorically held that the complainant herein has filed criminal revision petition for enhancement of the fine amount stating that the trial court has imposed only meager amount of Rs.20,000/- towards fine apart from imprisonment for one year and after considering the facts and circumstances of the case - the learned Sessions Judge enhanced the fine amount from Rs.20,000/- to Rs.1 core, including the fine which was already imposed by the trial court and with such deposit ordered that the complainant has to receive the amount of Rs.1 crore and if the accused fails to pay the same, he has to undergo simple imprisonment for six months. There are no justifiable grounds to enhance the compensation amount, since the award of compensation by way of restitution in regard to the loss on account of dishonour of cheque should be practical and realistic. The criminal revision case is, accordingly, dismissed. Issues:Petition to modify order enhancing fine amount under Section 482 Cr.P.C.Analysis:1. The complainant filed a complaint against A-1 and A-2 under Section 138 of the Negotiable Instruments Act, 1881, regarding a cheque dishonoured by the accused. The trial court convicted the accused, imposing a fine of Rs.20,000. The Sessions Judge upheld the conviction but enhanced the fine to Rs.1 crore.2. The complainant sought further enhancement of the fine to twice the cheque amount i.e., Rs.2 crores, along with interest and costs. The complainant argued that both lower courts should have awarded compensation as per Section 138 of the NI Act, citing relevant Supreme Court judgments.3. The evidence presented by the complainant, including witness testimonies and documentary evidence, established the dishonour of the cheque and the legal notices sent to the accused. The defense's claims of coercion and rent default were not substantiated. Both trial and appellate courts found the accused guilty under Section 138 of the NI Act.4. The Supreme Court judgments in R.VIJAYAN v. BABY AND ANOTHER and KALAMANI TEX AND ANOTHER emphasize the compensatory nature of Section 138 of the NI Act, advocating for uniformity in awarding compensation up to twice the cheque amount with interest. The learned Sessions Judge had already increased the fine to Rs.1 crore, considering the facts and circumstances of the case.5. The High Court, after considering all submissions, evidence, and legal precedents, concluded that there were no justifiable grounds to further enhance the compensation amount. Upholding the Sessions Judge's decision, the court dismissed the criminal revision petition under Section 482 Cr.P.C., maintaining the fine at Rs.1 crore.6. The judgment highlights the importance of practical and realistic compensation in cases of dishonoured cheques, ensuring fairness and consistency in legal outcomes. The court's decision reflects a balanced application of the law, upholding the compensatory principles of Section 138 of the NI Act while considering the specific circumstances of the case.