Courts Cannot Impose a Fine of More than Twice the Amount in Bounced Cheques: SC

The Supreme Court of India ruled that Courts cannot impose a fine of more than twice the amount in bounced cheques on 16 October 2013.

A bench of Justice TS Thakur and Justice Vikramajit Sen while ruling this direction explained that even in a case where the court may be taking a lenient view in favour of the accused by not sending him to prison, it cannot impose a fine more than twice the cheque amount. That statutory limit is inviolable and must be respected.

According to the Section 138 of the Negotiable Instruments Act, 1881 a person (whose cheque has bounced) shall without prejudice to any other provision of this act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both.

Background
The Supreme Court of India ruled this direction in the backdrop of the case where a person was asked by the Trial Court as well as the High Court of Calcutta to pay more than twice the amount of the cheque bounced, which is against the statutory provisions.