Section 138 NI Act| Trial Magistrate Has No Power To Impose Fine More Than Double The Cheque Amount: Karnataka HC
The Karnataka High Court modified the compensation awarded in a cheque bounce case observing that a Trial Magistrate had no power to impose a fine more than double the cheque amount.
The Bench noted that imposing a fine more than double the cheque amount was beyond the jurisdiction of the Trial Magistrate under the Negotiable Instruments Act, 1881 (NI Act). The Court also noted a sum of Rs. 30k imposed on the accused as “defraying expenses” to the State, and noted that the lis was between the two private parties and therefore, no State machinery was even involved.
A Single Bench of Justice V Srishananda observed, “Under the circumstances, imposing double the cheque amount as fine is uncalled for. Further, it is also noticed that trial Court has ordered that a sum of Rs.30,000/- is to be paid as the defraying expenses to the State…Admittedly, the lis is between the two private parties and therefore, no State machinery is involved. Further, learned Trial Magistrate has no power to impose fine more than double the cheque amount…In the case on hand, the Magistrate has imposed the fine of Rs.4,30,000/- which is beyond the jurisdiction of the Trial Magistrate under the Act.”
Advocate Praveenkumar K S represented the petitioner, while Advocate A Lourdu Mariyappa appeared for the respondent.
The accused was convicted under Section 138 of the NI Act for issuing a cheque of Rs. 2,00,000 that was dishonoured due to insufficient funds. The Senior Civil Judge had initially ordered the petitioner to pay a fine of Rs. 4,30,000, which included Rs. 4,00,000 as compensation to the complainant and Rs. 30,000 as defraying expenses to the State.
The accused appealed this decision, but the Sessions Judge dismissed the appeal confirming the decision. The accused then filed a revision petition before the High Court.
The High Court stated that both the Courts had misdirected themselves on two aspects. “Firstly, there is no foundation made by the complainant to seek for double the cheque amount as fine amount in the complaint averments or in the evidence,” the Court remarked.
The Bench stated that imposing double the cheque amount as fine was uncalled for and beyond the jurisdiction of the magistrate under the NI Act. “Reasonable amount of fine is to be made and compensation is to be paid to the complainant and therefore, imposing double the cheque amount as fine is justifiable,” the Bench added.
Consequently, the Court held that the “said aspect of the matter is totally ignored by the learned Judge in the First Appellate Court while mechanically dismissing the appeal. Therefore, a case is made out by the accused for interference in the sentence.”
Accordingly, the High Court partly allowed the petition.
Cause Title: Sri A M Harish Gowda @ A M Harisha v. Sri Chaluvaraju H S (Neutral Citation: 2024:KHC:19359)
