Himachal Pradesh High Court Upholds Conviction in Cheque Bounce Case Court affirms three-month imprisonment for accused, reduces fine to Rs. 40,000 in a case under Section 138 of the NI Act.
In a notable decision, the Himachal Pradesh High Court has upheld the conviction of Sandeep Kumar Sharma, who was sentenced to three months of simple imprisonment under Section 138 of the Negotiable Instruments Act, 1881, for issuing a dishonoured cheque. The court, however, revised the fine imposed from Rs. 60,000 to Rs. 40,000.
The case revolves around a Rs. 30,000 cheque issued by the accused, Sandeep Kumar Sharma, to the Punjab National Bank (PNB) in partial discharge of a loan amounting to Rs. 1,50,000. The cheque was dishonoured due to insufficient funds, leading to legal proceedings initiated by the bank. The complainant, PNB, represented by Mr. Sunil Kumar, Advocate, alleged that despite a legal notice, Sharma failed to repay the amount.
The trial court found the accused guilty, and the decision was upheld by the Sessions Court, Bilaspur. The accused, represented by Mr. Anirudh Sharma, contended that the cheque was issued as security, and the bank's records showed a zero balance, disputing the liability. However, the High Court dismissed this argument, citing established legal precedents that even security cheques attract liability under Section 138 of the NI Act.
Justice Rakesh Kainthla, presiding over the case, emphasized the limited scope of revisional jurisdiction, noting that it is confined to correcting errors of jurisdiction or law rather than re-evaluating evidence. The court also highlighted the deterrent nature of Section 138, aimed at ensuring the credibility of negotiable instruments.
In reducing the fine, Justice Kainthla took into account the interest lost and legal expenses incurred by the complainant. The judgment aligns with the Supreme Court's guidance to levy fines up to twice the cheque amount with interest, unless special circumstances justify otherwise.
The case underlines the judiciary's approach towards cheque bounce cases, reinforcing the principle that cheques, even when issued as security, carry legal obligations.
Bottom Line:
Section 138 of Negotiable Instruments Act - Cheque issued in discharge of debt or liability - Liability under section 138 of NI Act attracted even for a cheque issued as security - Revisional jurisdiction does not equate to appellate jurisdiction and is limited to correcting errors of jurisdiction or law.
Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Section 397 of the Criminal Procedure Code, 1973, Section 313 of the Criminal Procedure Code, 1973.
Sandeep Kumar Sharma v. PNB, (Himachal Pradesh) : Law Finder Doc Id # 2832094
