CHEQUE BOUNCE CASES: – IMPRISIONMENT IS NOT A MUST-SUPREME COURT OF INDIA


Imprisonment is not a must while punishing a person who issues cheques which bounce, the Supreme Court stated in the case, Kaushalya Devi vs Roopkishore. In this case, the drawer of cheques was convicted under the Negotiable Instruments Act. However, he deposited Rs 2 lakh out of Rs 3.5 lakh against the cheques. The magistrate felt that under that circumstance, fine would suffice and imprisonment was not necessary. He imposed a fine of Rs 4 lakh and allowed time to pay the balance. This order was challenged by the payee, but the Supreme Court agreed with the magistrate that jail sentence was not called for in this particular case.

Kaushalya Devi Massand Appellant versus Roopkishore Khore Respondent

Date of Decision: 15/03/2011

Judge(s): Hon’ble Mr. Justice Altamas Kabir and Hon’ble Mr. Justice Cyriac Joseph.

Subject Index: Negotiable Instruments Act, 1881 — section 138 — conviction under — quantum of sentence — in question — the ld. Magistrate viewed that imposition of a fine payable as compensation to the Appellant was sufficient to meet the ends of justice in the instant case. The High Court confirmed the order of the ld. Magistrate, with an increased fine — the Supreme Court held no interference with the order of the High Court, except to the extent of increasing the amount of compensation payable by a further sum of Rs.2 lakhs — appeal partly allowed.

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22 thoughts on “CHEQUE BOUNCE CASES: – IMPRISIONMENT IS NOT A MUST-SUPREME COURT OF INDIA

  1. In cheque dishonour cases; should fine and sentence will not be enough; very purpose will get defeated’as accused will feel cheque amount as loan on concessional rate.
    On other hand complainant will feel victmised; by filing complaint.
    Usally;subordinate courts;stress for compromise on promise to pay by accused.This is against ruling”in a criminal case court have to accquit or convict the accused” Further majority of decisions of high court are in errorin view of ruling set in AIR 1992 sc 96 which reads
    “for very good reason that court do not have power to make law”

  2. Morever letting go an accused without imprisionment means Change of Law for making payment wiyhin 15 days of service of notice to any time within litigency with a little fine.
    In view of such ruling non of accused needs now to be afraid of;as Honable Supreme court have changed law; by allowing substituting fine for imprisonment;
    in view of this now court will still be further overcrowded; & law passed by parliament stood overidden

    • Dear Sir,
      The very purpose of the legislation is defeated, if it is not properly applied.
      ecopackindia team

  3. The decision of the SC is very much appriciatable, so many innocent people now days have been involved by the money lenders, under Sec. 138-N.A.
    SC helps the innocent persons to alive,
    once again thanks to SC
    still a common man belives in law in our country.
    in allways the punishment for jail is not correct.

    • Money lenders is different. Most of the persons intentionally purchase things for huge amounts and issues cheques. They don’t honor the cheques and the innocent seller has to run from pillar to post and finally to the court of law with its usual procedural delay and a poor rate of interest. The person responsible for the bounced cheques appeals and get time and dragging the matter and by the time the seller has to suffer his time, money, mental agony and reputation. If it is proved that the cheques issued for the purpose and willfully bounced by the drawer of the cheques, the punishment should be severe with more penalty, so that he shall never think of issuing cheques again without money in his account. If it is dealt with very soft hands at the courts, the persons will make it a customary to issue cheques and enjoy other peoples things without paying. Not all the affected are approaching courts for the cheque bounces. Only 25 to 30 percent are going to court others go and beg at the doors of the culprits as they are afraid of the court procedures and also as the culprits escape in the loopholes of the law.

  4. Adluri’s:

    Your logic is specious. Law is not made to punish ‘innocent’ people. Law is made to punish who willfully disobey the law.

    If a person has a legally enforceable debt, and draws a cheque that is dishonored, then refuses to pay up in spite of being served a notice, further fights a case, instead of compounding, then looses it – how is he “INNOCENT”? He was given multiple opportunities to square up his debt. He did not.

    Note that this law is loaded against the accuser (payee). He needs to prove there is a legally enforceable debt. Accuser/Payee also have to pay a lawyer and wait for years, while the accused/drawer enjoys the money owed. So, why shouldn’t there be stringent action against such cheats?

    If a person takes a loan from a loan shark, and was forced to issue a cheque in advance, he can put a stop payment on those cheques. Besides, the courts in India don’t consider any loan legally enforceable, if the loans were against the law. i.e. Loans with unreasonable interests, loans for illegal activities, or loans above Rs.20,000 that were in cash (against income tax act). So, if a person had a debt that’s legal, and bounces a cheque he isn’t INNOCENT, he is a CHEAT.

    However, in my understanding supreme court punished the cheque drawer in this case by a penalty that’s far more than the amount he owed. He wasn’t let off scott free.

    • Dear Sir,
      We totally agree with your views and have cited one SC judgement for the benefit of the readers.
      ecopackindia team

  5. I fully endorse the comments of Harkol. We in India are taught from childhood not to take money from anyone. Never borrow. Live within your means. These are all good advise and constitute values. People not only take money, they buy goods and promise to pay later, enjoy the money/ goods and then bounce a cheque. What about the person who lost the money. The only exception is loan sharks charging very heavy interest (for which there is a separate law to catch and punish them). Otherwise it is just plain cheating. They should not only be put to prison but should also be beaten with sticks, only then will people not cheat. The cheat fights the case till supreme court, pays lawyers, avoids the payee who is owed money and you have sympathy for such a person???

    • Dear Sir,
      Is such extreme measures possible in our country?
      Blunders after blunders, scam after scam and dishonour after dishonour(not cheques) to human values and values in life, is the rule of the day. Honest suffer, Dishonest and cheats flourish. To be honest is a crime.If the borrowed money is repaid, is a crime. MAXIM OF THE DAY: HONESTY IS THE STRAIGHT WAY TO POVERTY.
      One politician is converting my countrymen into lazy citizens, provide free luxuries, which are not required, and make them slaves of all freebies. After sometime, when the govt cannot offer or provide it, what will be the position of our society and the country.
      We fully agree that defaults must not be acquitted.

      ecopackindia team

  6. Cheque bouncing cases are not punished and time dragging by Magistrates for years together and at the end making the accused free with out any convictions with vague answers. Either the magistrates should not admit the case at the time of admission after verification of documents or do proper judgement. Neither the Magistrates nor the advocates aware of business laws and even not aware of what is a cheque, demand draft, letter of credit and Post dated cheques and making them educating is tough task. Due to this sort of end, every one who issues bogus cheques and make them bouncing clearly aware that nothing will happen in this country and after a period of five or six years it will go off either the complainant will not represent nor his advocate and in many cases accused keep on holiday or accused’s advocate keep vacations – and this is happening in India and people have no trust in judgement as it is just a time waste.

  7. I WOULD LIKE TO HAVE SUGGESTION AND THE MATTER IS VERY SERIOUS AND I AM SURE, ANY ONE OF U WILL SURE GUIDE ME. I WAS HAVING A EXCELLENT BUSINESS . DUE TO SOME PROBLENS, I SUFFER A HUGE LOSS. HUGE LOSS. I HAD TO ISSUED POST DATED CHEQUES. MY BUSINES COULD NOT BE ESTABLISHED AND I HAD TO SHIFT MY TOWN. CHEQUES WERE PRESENIWANT TO SETTLE IN VARIOUS COURTS. I WAS DECLARED IN MANY. NOW MY FINANCIAL POSITION IS BETTER.
    1. ALL THE COMPLAINTS ARE READY TO SETTLE . WHAT COULD BE DONE TO AVOID IMPRISONMENT.
    2. I DON’T HAVE DETAILS OF FEW CHEQUES ISSUED. EVEN THE COURTS AND COMPLAINTS BUT I AM INTRESTED TO SETTLE. WHAT COULD BE DONE.REGARDS.

    rajivwalia@yahoo.com

    • Dear Sir,
      Request your advocate to prepare a compromise petition and let all the plaints agree and affix their signatures before the court.
      ecopackindia team

      • THANKS SIR BUT MY MAJOR PROBLEM IS THAT I DON’T HAVE DETAILS OF 4/5 CHEQUES ISSUED BY ME. NEITHER THE COMPLAINANT NOR THE COURT AND NOR THE DECISION. WHAT COULD BE DONE IN THIS REGARDS. I AM NOT SURE IF PO IS DECLARE IN ANY CASE. THEY WERE ISSUED IN JUST PUNJAB STATE. WHAT SO EVER MAY BE THE REASON, I AM READY TO PAY IN ANY CASE.

      • Dear Sir,
        Please consult an advocate in Chandigarh and take immediate step without any further delay. We are placed in bangalore and hence might not be able to handle this situation.
        ecopackindia team

  8. There should be a system,where in the gets deposited with an court/police endorsement,by showing proof of legal sale and then depositing,and if the cheque is dishonored – then the culprit should be strictly punished and swiftly too!

  9. AFTER READING ABOVE CASE I ALSO WANT SOME ADVICE FROM ECO TEAM.WE HAVE BUSINESS AROUND 35 YEARS,ONE OF OUR CLIENT IN SOUTH INDIA ISSUE POST DATES CHEQUES IN 2003 WHICH WAS DISHONOURED,AFTER SEVERAL CALLS AND PERSONAL VISITS PARTY REFUSE TO PAY AMOUNT (2 LACS).IN 2004 WE HAD CASE ON THIS PARTY,AS SUMMONS WAS SEND BUT HE REFUSE TO ACCEPT.THE CASE WAS INITATED IN GURDASPUR,PUNJAB.OUR LAWYER SAID TO ISSUE LETTER FROM COURT FOR HIS ARREST.BUT CHARGES OF POLICEPERSON WILL BR BRONE BY YOU THAT MEANS FROM GURDASPUR,PUNJAB TO SOUTH WHICH INCLUDE LODGING,MEALS AND THEIR EXPENSES WILL BE BRONE BY US.NOW MY QUESTION IS .IS THERE IS ANY LAW WHICH SAY TO BEAR CHARGES OF 2 OR 3 POLICE PERSONNEL FOR ARRESTING OFFENDER.AS ALREADY WE SPENT A LOT OF AMOUNT IN FORM OF FEE PAID TO LAWYER..PLS HELP ME…DO MAIL AT

    • Dear Sir,

      We regret to state that we must not comment or pass remarks as one of our colleagues is handling the suit and hence, you are advised to contact your solicitor.
      ecopackindia team

  10. is any supported document required to prove money was actually taken, because what if some Government servant who has to show all transaction in income tax , fraudulently took few of my cheque and start blackmailing ? how to prove him wrong?

    • Dear Sir,

      The burden of proof lies on the petitioner. If you cannot prove it with clear cut documentary evidence, the court will not come to your rescue.
      ecopackindia team

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