UDAY KUMAR Vs. SHREESHA BHAT

JUDGEMENT

(1.) HEARD the learned Counsel for the petitioner and the learned Counsel for the respondent. The petitioner was the accused before the court below in respect of an allegation of commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (Hereinafter referred to as the 'NI Act', for brevity).

(2.) THE petitioner and the respondent were said to be friends and it is alleged that the complainant had lent a sum of Rs. 2,92,000/ - as a hand loan at the request of the accused - petitioner and when there was demand made for repayment he had issued a cheque for Rs. 3,41,935/ - and the same when presented for encashment, had been dishonored for want of sufficient funds. It is thereafter that formal proceedings had been initiated by the issuance of a notice under Section 138 of the NI Act. Thereafter, when the demand was not met, a complaint was filed. The petitioner had contested the matter before the trial court. However, he had admitted that there was a loan transaction of only a sum of Rs. 50,000/ - and sought to negate the cheque on the ground that there was no legal liability in respect of the amount reflected in the cheque. However, in the course of his cross -examination he had admitted a loan of Rs. 2,92,000/ -. But he sought to deny that the cheque could have been issued for the amount shown even if the loan was agreed to be repayable with interest at the rate of 15%. Since the amount was borrowed in the month of October 2001, and the cheque was issued as on May 2002, the interest on the loan amount then at the have been at the rate of 15% would not be the cheque amount as shown and therefore there was a falsity in the claim of the respondent. That contention having been negated by the court below, the trial court had convicted the accused and sentenced him to pay a fine of Rs. 3,45,000/ - out of which Rs. 342,000/ - was paid as compensation to the respondent.

(3.) HOWEVER , insofar as the sentence is concerned, though there is power conferred on the courts below to impose a sentence of punishment, by way of imprisonment, which could extent to a period of 2 years or fine which may extend to twice the amount of the cheque, the same is not to be mechanically invoked to award exorbitant amounts of money, as if the proceeding were in the nature of suit for recovery of money.