Cheque Bounce Cases Require Deterrent Punishment: Court

New Delhi: Deterrent punishment has to be given in cheque bounce cases to ensure the credibility of a negotiable instrument like cheque which is part of everyone's day-to-day life, a Delhi court has said.

The court's observation came while upholding the eight-month imprisonment of a man who was directed by a magisterial court to also pay a compensation of Rs 20 lakh to the complainant in a cheque bounce case.

Additional Sessions Judge Pulastya Parmachala dismissed the man's appeal against the magistrate's order and agreed with the trial court that it was the legislative intent to provide strong criminal remedy to create a deterrence against dishonour of cheques.

"In order to ensure the credibility of negotiable instrument like cheque, which is part and parcel of day-to-day life of any person while indulging in any sort of transaction, deterrent theory of punishment has to be invoked and hence, I do not find any infirmity in the sentence of imprisonment as well. Accordingly, the appeal (of man) is found devoid of any merit and hence, dismissed," the judge said.

The court upheld the jail term and amount of compensation to be paid by the man to the complainant, saying Rs 20 lakh was double amount of the cheque which was issued on September 30, 2010 and around seven years have lapsed so the quantum of compensation was found to be justified.

Complainant P C Sharma said in the complaint that in August 2002, the man had approached him for a loan of Rs 10 lakh which he agreed to give him. They executed a promissory note in September 2002, by which the man promised to repay the loan with interest of over Rs 4.31 lakh.

The borrower issued a cheque of Rs 10 lakh to Sharma on September 30, 2010 which was dishonoured by the bank due to insufficient funds, it alleged.

The complainant sent a legal notice to the man but when no payment was made, he filed the complaint before the court.

During the trial, the man claimed that he had repaid the loan prior to filing of the complaint but had not brought any concrete evidence in this regard.