2023 (9) TMI 406 - HC - Indian Laws

Dishonour of Cheque - quantum of fine - whether courts can impose more than twice the cheque amount, as fine, by way of interest or otherwise, for the offence punishable under Section 138 of the NI Act? - HELD THAT - Going by the statutory restriction, the maximum sentence that can be imposed for commission of offence under Section 138 of the N.I.Act is imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque or with both. The trial court imposed double the cheque amount as fine, taking note of the fact that cheque was issued during 2015, the same cannot be held as excessive and the said reason is justifiable. But as far as grant of interest at the rate of 9% to double the cheque amount from the date of judgment on failure to pay the fine amount ordered not paid within sixty days, is not legally permissible since the statute permits imposition of fine which may extend to twice the cheque amount and not beyond double the cheque amount. To put it correctly, no amount in excess of double the cheque amount could be imposed as fine. Thus, it appears that the learned Magistrate exceeded the statutory limit and granted 9% interest to the fine amount as in the case of a civil court decree, thereby the amount of fine exceeded the statutory limit, by imposing default clause. However, it is made clear that the courts can impose double the cheque amount as fine or lesser sum, by adding interest thereof, or to compensate the complainant otherwise, by quantifying the amount, but on any contingency the fine amount shall not exceed twice the cheque amount. Therefore, the sentence is modified, so as to maintain the same within the statutory limit. The conviction stands confirmed and the sentence stands modified, whereby the accused/revision petitioner is sentenced to undergo imprisonment for a day till rising of the court and to pay a fine of Rs.2,05,220/- and the said amount shall be given as compensation to the complainant under Section 357(1)(b) of the Cr.P.C. In default of payment of fine, the accused shall undergo imprisonment for a period of four months - this revision petition is allowed in part.

Summary

Issues involved:
The judgment involves a revision petition challenging the judgment in a case related to the dishonour of a cheque under Section 138 of the Negotiable Instruments Act. The issues include the authority of the complainant to represent the company and the imposition of penalty exceeding the statutory limit.

Authority of Complainant:
The complainant, a company, alleged that the accused failed to repay a loan and issued a dishonoured cheque. The trial court and appellate court found that the complainant's Chief Officer cum Executive Director had the authority to represent the company based on evidence presented, including various documents supporting the transaction. The challenge to the complainant's authority was deemed meritless.

Imposition of Penalty:
The trial court imposed a fine exceeding twice the cheque amount and granted interest on the fine amount, which was challenged by the accused. The court noted that while the statutory limit allows for a fine up to twice the cheque amount, interest beyond this limit is not legally permissible. The sentence was modified to ensure it remained within the statutory limit, with the accused being sentenced to a day's imprisonment and a fine of Rs.2,05,220, to be paid as compensation to the complainant. The accused was granted three months to pay the fine amount, with failure resulting in a four-month imprisonment.

Conclusion:
The revision petition was partially allowed, confirming the conviction but modifying the sentence to align with the statutory limit. The accused was directed to pay the fine within three months, failing which a four-month imprisonment would be imposed. The execution of the sentence was deferred pending compliance, with instructions for the trial court to ensure enforcement if the accused fails to appear.