MR DINESH MALPANI vs THE STATE OF KARNATAKA
- Court
- Karnataka High Court
1
R
Reserved on :24.04.2026
Pronounced on :04.06.2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 04 DAY OF JUNE, 2026
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.5718 OF 2026
BETWEEN:
MR.DINESH MALPANI
S/O LATE MR.JAMNA DAS MALPANI
AGED ABOUT 53 YEARS
R/AT NO.1091/92,
SOBHA CARNATION
GREEN GLEN LAYOUT,
SARJAPUR ROAD, BELLANDUR
BENGALURU – 560 103.
PRESENTLY UNDER JUDICIAL CUSTODY AT
CENTRAL PRISON,
PARAPANA AGRAHARA
BENGALURU – 560 068
FROM 29.09.2026.
... PETITIONER
(BY SMT.KEERTHI REDDY, ADVOCATE FOR
SRI ADBHUTH J.KAUSHIK, ADVOCATE)
AND:
1 . THE STATE OF KARNATAKA
THROUGH ITS ADDITIONAL CHIEF SECRETARY
(HOME) AND SECRETARY TO GOVERNMENT (PCAS)
Digitally signed
by SANJEEVINI J
KARISHETTY
Location: High
Court of
Karnataka
2
DEPARTMENT OF HOME
REPRESENTED BY
STATE PUBLIC PROSECUTOR,
HIGH COURT OF KARNATAKA
BENGALURU – 560 001.
2 . THE CHIEF SUPERINTENDENT
CENTRAL PRISON-BANGALORE
PARAPANA AGRAHARA
BENGALURU – 560 068.
3. M/S.JUPITER CAPITAL PVT. LTD.,
HAVING ITS REGISTERED OFFICE AT:
JUPITER INNOVISION CENTRE
NO.54, RICHMOND ROAD
BENGALURU – 560 025
REPRESENTED BY
DEPUTY CHIEF FINANCIAL OFFICER
MR.ASHWANI GUPTA
(REGISTERED BY COMPANIES ACT)
... RESPONDENTS
(BY SRI B.N.JAGADEESHA, ADDL.SPP FOR R-1 AND R-2;
SRI VIKRAM HUILGOL, SR.ADVOCATE A/W
SMT.AMRITA SHIVAPRASAD, ADVOCATE FOR R-3)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF
B.N.S.S, PRAYING TO 1. REDUCE THE DEFAULT SENTENCE TO 3
MONTHS ALTOGETHER IN THE THREE CASES BEING
C.C.NO.15234/2021, C.C.NO.15235/2021 AND C.C.NO.15236/2021
PASSED BY THE HONBLE XVII ADDL. SMALL CAUSES AND ACMM,
MAYOHALL UNIT, BENGALURU; 2. TO HOLD THAT PETITIONER HAS
SATISFIED THE DEFAULT IMPRISONMENT GIVEN IN
C.C.NO.15234/2021, C.C.NO.15235/2021 AND
C.C.NO.15236/2021, DATED 14.12.2023 PASSED BY THE HON’BLE
XVII ADDL. SMALL CAUSES AND ACMM, MAYOHALL UNIT,
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BENGALURU, AT ANNEXURE-A, A1 AND A2 BY SERVING THE
SENTENCE FOR BEYOND 3 MONTHS ARISING OUT OF SAME
TRANSACTION AND SOLITARY STATUTORY DEMAND NOTICE
DATED 11.09.2020 ISSUED TO IT; 3. DIRECT THAT IN TERMS OF
SECTION 65 OF THE INDIAN PENAL CODE, NOW SECTION 24 OF
THE BHARATIYA NYAYA SANHITA, 2023, SINCE THE DEFAULT
SENTENCE CANNOT BE MORE THAN ONE FOURTH OF THE
MAXIMUM PUNISHMENT IN AN OFFENCE, THE PETITIONER MAY BE
RELEASED IMMEDIATELY UPON COMPLETION OF 6 MONTHS FROM
29.09.2025, i.e., 29.03.2026; 4. ISSUE A DIRECTION TO THE
RESPONDENT NO.2 TO IMMEDIATELY RELEASE THE PETITIONER
FROM JUDICIAL CUSTODY IN THE INTEREST OF JUSTICE.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 24.04.2026, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioner–accused is before this Court, seeking his
immediate release from judicial custody, by way of a reduction in
the default sentence of imprisonment, imposed for non-payment of
the fine amount awarded by the trial Court, upon his conviction for
the offence punishable under Section 138 of the Negotiable
Instruments Act, 1881 (‘the Act’ for short) in C.C. No. 15234 of
2021, C.C. No. 15235 of 2021, and C.C. No. 15236 of 2021.
4
2. Facts in brief, germane, are as follows:
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2.1. On 22-12-2017 the 3 respondent and the petitioner
rd
enter into a loan agreement, in terms of which the 3 respondent
agreed to lend an amount of Rs.10 crores to the petitioner. An
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amount of Rs.5,96,00,000/- was disbursed immediately to the 3
respondent in terms of the agreement. By 15-08-2020 the
petitioner was required to repay the outstanding amount. In
furtherance of such repayment along with interest, the petitioner
issued three cheques for an amount of Rs.50 lakhs, Rs.3.5 crores
and Rs.5 crores for repayment of the loan amount along with
interest. All the three cheques presented on the same day get
rd
dishonoured for want of sufficient funds. On 11-09-2020, the 3
respondent/Company issued a statutory demand notice under
Section 138 of the Act following the dishonour of the cheques. In
rd
response, the petitioner informs the 3 respondent of his financial
inability to repay the loan amount and the severe hardships faced
rd
by him and his family. Subsequently, the 3 respondent initiates
proceedings before the concerned Court by filing three separate
complaints. Three separate criminal cases were registered on
cognizance being taken, in C.C.No.15234 of 2021, 15235 of 2021
5
and 15236 of 2021. All the three cheques were issued out of a
single transaction. The petitioner was convicted for the offence
punishable under Section 138 of the Act and sentenced in the
following manner:
(i) In C.C.No.15234/2021, filed for the dishonour of cheque
No.000253 for an amount of Rs.50 lakhs, the petitioner
was directed to pay a fine of ₹61,67,000/-, of which
₹10,000/- was payable to the State as compensation
under Section 357(1)(b) Cr.P.C. In default of payment of
the fine, he was to undergo simple imprisonment for a
period of 3 months.
(ii) In C.C.No.15235/2021, filed for the dishonour of cheque
No.000254 for an amount of Rs.3.5 Crores, the petitioner
was directed to pay a fine of ₹4,31,66,670/-, of which
₹10,000/- was payable to the State as compensation
under Section 357(1)(b) Cr.P.C. In default of payment of
the fine, he was to undergo simple imprisonment for a
period of 3 months.
(iii) In C.C.No.15236/2021, filed for the dishonour of cheque
No.000255 for an amount of Rs.5 Crores, the petitioner
was directed to pay a fine of ₹6,16,67,000/-, of which
₹10,000/- was payable to the State as compensation
under Section 357(1)(b) Cr.P.C. In default of payment of
the fine, he was to undergo simple imprisonment for a
period of 3 months.
2.2. The petitioner is said to have defaulted in payment of the
fine amount, as he was not ready to repay the same. Therefore, by
way of separate orders passed on the same day i.e., on 29-05-
6
2025, in all the three cases, he was directed to undergo default
sentence of 3 months of simple imprisonment. On 06-11-2025,
separate orders under Section 421(1) of the Cr.P.C. for the
attachment of the property of the petitioner were passed in
C.C.No.15235/2021 and C.C.No.15236/2021. Aggrieved, the
petitioner has filed the present criminal petition seeking the
following reliefs:
“I. To reduce the default sentence to 3 months altogether in
the three cases being C.C. No. 15234/2021, С.С. No.
15235/2021 and C.C. No. 15236/2021, passed by the
XVII Addl. Small Causes and A.C.M.M, Mayo Hall Unit,
Bengaluru in the interest of justice or in the alternate
II. To hold that Petitioner has satisfied the default
imprisonment given in C.C. No. 15234/2021, C.C. No.
15232/2021 and C.C.No.152356/2021 Passed by the XVII
Addl. Small Causes and A.C.M.M, Mayo Hall Unit,
Bengaluru dated 14.12.2023 at Annexure-A, A1 and A2
by serving the sentence for beyond 3 months arising out
of same transaction and solitary statutory demand notice
dated 11.09.2020 issued to it, in the interest of Justice.
In the alternative:
III. To direct that in terms of section 65 of the Indian Penal
Code, now Section 24 of the Bharatiya Nyaya Sanhita,
2023, since the Default sentence cannot be more than
one fourth of the maximum punishment in an offence, the
Petitioner may be released immediately upon completion
of 6 months from 29.09.2025, i.e., 29.03.2026 an
7
IV. Issue a direction to the Respondent No.2 to immediately
release the Petitioner from Judicial Custody in the interest
of Justice.
V. Pass any order/direction/direction has deem fit in the
facts and circumstance of the case, in the interest of
Justice.”
3. Heard Smt. Keerthi Reddy, learned counsel appearing for
petitioner, Sri B. N. Jagadeesha, learned Additional State Public
Prosecutor appearing for respondent Nos.1 and 2 and Sri. Vikram
Huilgol, learned senior counsel appearing for respondent No.3.
4.1. The learned counsel appearing for petitioner Smt. Keerthi
Reddy would contend that the maximum imprisonment to a
convicted person under Section 138 of the Act is 2 years. As a
necessary corollary upon a joint reading of Section 65 of the
IPC/Section 8 of the present regime, the BNS r/w Section 138 of
the Act, the maximum default sentence that the petitioner could
th
have been directed to undergo could not have exceeded 1/4 of the
term of 2 years, which would be not more than 6 months.
8
4.2. The contention of the learned counsel further is that the
offence under the Act being quasi-criminal and less serious in
nature, the petitioner deserves to not be tried and viewed under the
lens of a criminal act and instead, a lenient view must be taken.
rd
She would contend that the 3 respondent has deliberately filed
three different complaints to harass the petitioner and the entire
amount of consideration is arising out of a single loan agreement.
She would seek to place reliance upon the judgment of the Apex
Court in the case of K. PRANIL REDDY v. STATE OF TELANGANA
and that of the High Court of Delhi in the case of SANJAY
, which would bear
VASUDEVA v. STATE OF NCT, DELHI
consideration qua their relevance during the course of the order.
Further, she would also state that the petitioner is financially
incapable of repaying the fine amount and his continued
incarceration in the jail is causing hardships to his family members.
5. Contrariwise, the learned senior counsel representing the
rd
3 respondent-complainant would refute the submissions in
contending that default sentences in payment of fine cannot be
directed to be undergone concurrently, they must be undergone
9
consecutively. Therefore, the petitioner must undergo 9 months
imprisonment for default in the fine amount and not 6 months, as is
contended. He would submit that 3 cases were presented and
hence, 3 independent cases were registered, as each cheque was a
new and independent cause of action. He would seek to place
reliance upon the judgments of the Apex Court in the case of
SUMIT BANSAL v. MGI DEVELOPERS & PROMOTERS reported
in (2026) SCC OnLine SC 49 and in the case of SHARAD HIRU
KOLAMBE v. STATE OF MAHARASHTRA reported in (2018) 18
SCC 718 , which would also bear consideration during the course of
the order.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
7. The afore-narrated facts, the underlying transaction, and
every link in the chain of events are a matter of record. The
commercial relationship between the parties having fallen into
disarray, the cheques issued by the petitioner in favour of the
10
complainant came to be dishonoured upon presentation, thereby
setting into motion proceedings for the offence punishable under
Section 138 of the Negotiable Instruments Act. The criminal
process, thus triggered, culminated in the conviction of the
petitioner by orders dated 14-12-2023 passed by the jurisdictional
Court. The convictions were rendered in three distinct
calendar cases, each arising from a separate dishonoured
cheque, though all emanated from a singular financial
transaction rooted in one loan agreement. The orders of
conviction, grave in consequence and substantial in monetary
burden, read as follows:
C.C. No. 15234/2021:
“ ORDER
Acting U/Sec.255(2) of Cr.P.C. the accused is found
guilty for the offence punishable under Sec.138 of N.I.
Act and he is sentenced to pay a fine of Rs.61,67,000/-
(Rupees Sixty one lakhs sixty seven thousand Only). In
default to pay fine, the accused shall undergo
simple imprisonment for a period of three months.
Further, acting U/Sec.357(1)(b) of Cr.P.C., out of
the fine amount, a sum of Rs.10,000/- (Rupees Five
Thousands Only) on recovery shall be paid as
compensation to the state…”
(sic)
11
C.C. No. 15235/2021:
“ORDER
Acting U/Sec.255(2) of Cr.P.C. the accused is found
guilty for the offence punishable under Sec.138 of N.I.
Act and he is sentenced to pay a fine of Rs.4,31,66,670/-
(Rupees Four crore thirty one lakh sixty six thousand six
hundred and seventy Only). In default to pay fine, the
accused shall undergo Simple imprisonment for a
period of three months.
Further, acting U/Sec.357(1)(b) of Cr.P.C., out of
the fine amount, a sum of Rs.10,000/- (Rupees Five
Thousand Only) on recovery shall be paid as
compensation to the state…”
(sic)
C.C. No. 15236/2021:
“ORDER
Acting U/Sec.255(2) of Cr.P.C. the accused is found
guilty for the offence punishable under Sec.138 of N.I.
Act and he is sentenced to pay a fine of Rs.6,16,67,000/-
(Rupees Six crores sixteen lakhs sixty seven thousand
Only). In default to pay fine, the accused shall
undergo simple imprisonment for a period of three
months.
Further, acting U/Sec.357(1)(b) of Cr.P.C., out of
the fine amount, a sum of Rs.10,000/- (Rupees Five
Thousand Only) on recovery shall be paid as
compensation to the state...”
(sic)
Nearly two years after the pronouncement of conviction, the
petitioner having neither liquidated the fine amounts nor
evinced willingness to satisfy the liability imposed by law,
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the learned Magistrate directed him to undergo the sentence
in default, namely, simple imprisonment for a period of three
months in each of the calendar cases, by separate orders
dated 29-09-2025. The tenor of those orders unmistakably
reveals that, despite specific inquiry by the Court, the accused
declined to remit the fine amounts, compelling the Court to
activate the coercive consequence statutorily attached to
such default. Consequently, conviction warrants were issued
and the petitioner was committed to judicial custody for
undergoing the default sentence. The said orders read as
follows:
C.C. No. 15234/2021:
“Accused is produced by HC 10912, PC 19511 of
Bellanduru police at 3.45 pm, as per the order dt:
11.09.2025 on FLW.
On inquiry accused is not ready to pay the
fine amount of Rs.61,67,000/-. Hence as per *
the aforesaid order accused has suffer sentence
that is simple imprisonment for a period of three
months.
Issue conviction warrant to that effect.
Hence, accused is handed over to HC 10912, PC
19511 of Bellanduru police with a direction to hand over
the accused to the Jailer Parappana Agrahara, Bengaluru
to suffer the sentence and report the compliance.”
13
C.C. No. 15235/2021:
“Accused is produced by HC 10912, PC 19511 of
Bellanduru police at 3:45pm, as per the order
dt:11.09.2025 on FLW.
On inquiry accused is not ready to pay the
fine amount of Rs.4,31,66,670/-. Hence as per the
aforesaid order accused has suffer sentence that is
simple imprisonment for a period of three months.
Issue conviction warrant to that effect.
Hence, accused is handed over to HC 10912, PC
19511 of Bellanduru police with a direction to hand over
the accused to the Jailer Parappana Agrahara, Bengaluru
to suffer the sentence and report the compliance.”
C.C. No. 15236/2021:
“Accused is produced by HC 10912, PC 19511 of
Bellanduru police at 3.45pm, as per the order
dt: 11.09.2025 on FLW.
Counsel for accused present.
On inquiry accused is not ready to pay the
fine amount of Rs.6,16,67,000/-. Hence as per the
aforesaid order accused has suffer sentence that is
simple imprisonment for a period of three months.
Issue conviction warrant to that effect.
Hence, accused is handed over to HC 10912, PC
19511 of Bellanduru police with a direction to hand over
the accused to the Jailer Parappana Agrahara, Bengaluru,
to suffer the sentence and report the compliance.”
(Emphasis added at each instance)
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Simultaneously, the learned Magistrate also invoked the
machinery of Section 421(1) of the Code of Criminal
Procedure and directed attachment proceedings against the
properties of the petitioner in all the three calendar cases.
The petitioner, having already suffered incarceration for a
cumulative period of six months in two of the cases, now
stands before this Court seeking enlargement from judicial
custody, contending that the continued incarceration
transgresses the statutory limitations engrafted under
criminal jurisprudence.
THE ISSUE:
8. The pivotal issue that therefore falls for
consideration is, whether the imposition of separate default
sentences in three distinct prosecutions, all springing from
one indivisible transaction, results in a punitive excess
contrary to the mandate of Section 65 of the Indian Penal
Code, now mirrored in Section 8(3) of the BNS, thereby
entitling the petitioner to immediate release from custody.
To appreciate the contours of the controversy, it becomes
15
imperative to notice Section 65 of the IPC and its corresponding
provision under the BNS. They read as follows:
Section 65 of the IPC:
“ 65. Limit to imprisonment for non-payment of fine,
when imprisonment and fine awardable .—The term for
which the Court directs the offender to be imprisoned in default
of payment of a fine shall not exceed one-fourth of the
term of imprisonment which is the maximum fixed for the
offence, if the offence be punishable with imprisonment
as well as fine”
…. …. ….
Section 8 of the BNS:
“ 8. Amount of fine, liability in default of payment of
fine, etc .—(1) Where no sum is expressed to which a fine may
extend, the amount of fine to which the offender is liable is
unlimited, but shall not be excessive.
(2) In every case of an offence—
( a ) punishable with imprisonment as well as fine, in which the
offender is sentenced to a fine, whether with or without
imprisonment;
( b ) punishable with imprisonment or fine, or with fine only, in
which the offender is sentenced to a fine,
it shall be competent to the Court which sentences such offender
to direct by the sentence that, in default of payment of the fine,
the offender shall suffer imprisonment for a certain term, in which
imprisonment shall be in excess of any other imprisonment to
which he may have been sentenced or to which he may be liable
under a commutation of a sentence.
16
(3) The term for which the Court directs the
offender to be imprisoned in default of payment of a fine
shall not exceed one-fourth of the term of imprisonment
which is the maximum fixed for the offence, if the offence
be punishable with imprisonment as well as fine.
(4) The imprisonment which the Court imposes in default of
payment of a fine or in default of community service may be of
any description to which the offender might have been sentenced
for the offence.
(5) If the offence is punishable with fine or community
service, the imprisonment which the Court imposes in default of
payment of the fine or in default of community service shall be
simple, and the term for which the Court directs the offender to
be imprisoned, in default of payment of fine or in default of
community service, shall not exceed,—
( a ) two months when the amount of the fine does not
exceed five thousand rupees;
( b ) four months when the amount of the fine does not
exceed ten thousand rupees; and
( c ) one year in any other case.
(6)(a) The imprisonment which is imposed in default of
payment of a fine shall terminate whenever that fine is either
paid or levied by process of law;
(b) If, before the expiration of the term of imprisonment fixed in
default of payment, such a proportion of the fine be paid or levied
that the term of imprisonment suffered in default of payment is
not less than proportional to the part of the fine still unpaid, the
imprisonment shall terminate.
Illustration
A is sentenced to a fine of one thousand rupees and to four
months' imprisonment in default of payment. Here, if seven
hundred and fifty rupees of the fine be paid or levied before the
expiration of one month of the imprisonment, A will be discharged
17
as soon as the first month has expired. If seven hundred and fifty
rupees be paid or levied at the time of the expiration of the first
month, or at any later time while A continues in imprisonment, A
will be immediately discharged. If five hundred rupees of the fine
be paid or levied before the expiration of two months of the
imprisonment, A will be discharged as soon as the two months
are completed. If five hundred rupees be paid or levied at the
time of the expiration of those two months, or at any later time
while A continues in imprisonment, A will be immediately
discharged.
(7) The fine, or any part thereof which remains unpaid,
may be levied at any time within six years after the passing of
the sentence, and if, under the sentence, the offender be liable
to imprisonment for a longer period than six years, then at any
time previous to the expiration of that period; and the death of
the offender does not discharge from the liability any property
which would, after his death, be legally liable for his debts.”
Section 65 of the IPC, now reincarnated as Section 8(3) of
the BNS, embodies a salutary restraint upon the sentencing
power of criminal Courts. The provision ordains that where
an offence is punishable with both imprisonment and fine,
the term of imprisonment imposed in default of payment of
fine shall not exceed one-fourth of the maximum term of
imprisonment prescribed for that offence. The legislative
intent underlying the provision is luminous: imprisonment in
default is not to assume the character of a
18
disproportionately oppressive penalty, but is intended
merely as a coercive mechanism to secure payment of fine.
9. Equally germane are Section 30 of the Cr.P.C. and its
successor provision, Section 24 of the BNSS, which further
circumscribe the authority of a Magistrate while imposing
imprisonment in default of payment of fine. They read as follows:
Section 30 of the Cr.P.C.:
“30. Sentence of imprisonment in default of fine. —
(1) The Court of a Magistrate may award such term of
imprisonment in default of payment of fine as is authorised by
law:
Provided that the term—
(a) is not in excess of the powers of the Magistrate
under Section 29;
(b) shall not, where imprisonment has been
awarded as part of the substantive sentence,
exceed one-fourth of the term of imprisonment
which the Magistrate is competent to inflict as
punishment for the offence otherwise than as
imprisonment in default of payment of the fine.
(2) The imprisonment awarded under this section may be
in addition to a substantive sentence of imprisonment for the
maximum term awardable by the Magistrate under Section 29.”
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Section 24 of the BNSS:
“ 24. Sentence of imprisonment in default of fine. —
(1) The Court of a Magistrate may award such term of
imprisonment in default of payment of fine as is authorised by
law:
Provided that the term—
(a) is not in excess of the powers of the Magistrate under
Section 23;
(b) shall not, where imprisonment has been awarded
as part of the substantive sentence, exceed one-fourth
of the term of imprisonment which the Magistrate is
competent to inflict as punishment for the offence
otherwise than as imprisonment in default of payment
of the fine.
(2) The imprisonment awarded under this section may be
in addition to a substantive sentence of imprisonment for the
maximum term awardable by the Magistrate under Section 23.”
The aforesaid provisions reiterate that the sentence in
default cannot travel beyond one-fourth of the term of
imprisonment which the Magistrate is otherwise competent
to impose for the substantive offence. Thus, the statutory
architecture unmistakably reveals a legislative anxiety
against excessive incarceration merely on account of
inability or unwillingness to discharge a pecuniary liability.
20
10. Section 138 of the Negotiable Instruments Act prescribes
a maximum punishment of two years’ imprisonment, or fine
extending to twice the cheque amount, or both. Consequently,
when Section 65 of the IPC and Section 8(3) of the BNS are read in
conjunction with the penal framework of Section 138, the outer
limit of imprisonment in default of payment of fine would be six
months in each case. In the case at hand, the petitioner has
suffered convictions in three separate prosecutions and, upon
failure to satisfy the fine amounts imposed therein, has been
directed to undergo default imprisonment of three months in each
case. The learned counsel for petitioner Smt. Keerthi Reddy would
contend that the cumulative operation of these sentences visits him
with an unduly harsh and excessive punishment, offending the spirit
and mandate of Section 65 of the IPC and Section 8(3) of the BNS.
The issue, however, no longer res integra , stands illumined by a
long and consistent line of judicial pronouncements by various High
Courts while interpreting the scope and sweep of imprisonment in
default of payment of fine vis-à-vis prosecutions under Section 138
of the Negotiable Instruments Act.
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JUDICIAL LANDSCAPE
11.1. In the case of
K. PRANIL REDDY v. STATE OF
1
TELANGANA , while navigating the delicate intersection between
punitive consequence and humane justice, the Apex Court has held
as follows:
“…. …. ….
5. Before us the learned counsel for the appellant has
submitted that the appellant is financially unable to comply with
the directions of payment of compensation/ fine amount, by
the Trial Court and affirmed by the High Court. He further
states that the appellant has already undergone more than 13
months of imprisonment, which is evident from the custody
certificate which shows that the appellant has been in custody
since 6th October, 2023. The limited submission of the learned
counsel for the appellant is for reduction in the default
sentence of three months imposed for each of the eight cases,
which was directed by the High Court to run consecutively.
6. In the facts and circumstances of the case and in
particular, the medical condition of the appellant, as the
appellant is a heart patient and has been undergoing
regular treatment and recently he was hospitalized and
now back in jail and as explained under Section 65 of the
Indian penal Code, 1860, the default sentence cannot
exceed one- fourth of the term of imprisonment.
7. Applying this principle and considering the facts
and circumstances of the case, we reduce the default
sentence from three months to one month in each of the
eight cases. Thus, the total sentence of the appellant
1
Crl.A. No. 004874 - 004881/2024, Disposed on 26-11-2024
22
which he will now have to undergo would be six months
substantive and eight months in default sentences,
totaling fourteen months.
8. Since the appellant has already been in custody
for over thirteen months, he will be released upon
completing fourteen months of imprisonment in total.
9. To the above extent, the impugned order passed by
the High Court shall stand modified.”
The High Court of Telangana, in the aforesaid pronouncement,
tempered the rigour of law with the compassion that must invariably
animate judicial discretion. Noticing that the appellant therein had
already undergone incarceration for more than thirteen months and
was suffering from serious cardiac ailments, the High Court invoked
the mandate of Section 65 of the Indian Penal Code and reduced the
default sentence from three months to one month in each of the
eight cases. The Court thus underscored that imprisonment in
default of payment of fine cannot be permitted to assume a
disproportionately punitive character, especially where
circumstances reveal financial incapacity and grave medical
adversity.
23
2
11.2. In the case of SANJAY VASUDEVA v. STATE , the
High Court of Delhi rendered an elaborate exposition on the nature,
scope and limits of imprisonment in default of payment of fine
under Section 138 of the Negotiable Instruments Act. The Delhi
High Court observed thus:
“ ANALYSIS AND DISCUSSION
11. First and foremost, the question that requires
redressal here is framed as below:—
• Whether, in the event of in multiple cheque dishonors,
cumulative default imprisonment for non-payment of fine under
Section 138 of the Negotiable Instruments Act, 1881 (NI Act),
can exceed the cumulative substantive sentence limit?
11.1 Let us first see relevant part of Section 138 of
the Negotiable Instruments Act which for ease of reference is
reproduced herein below:
“ 138. Dishonour of cheque for insufficiency, etc.,
of funds in the account .—
Where any cheque drawn by a person on an account
maintained by him with a banker for payment of any amount
of money to another person from out of that account for the
discharge, in whole or in part, of any debt or other liability, is
returned by the bank unpaid, either because of the amount
of money standing to the credit of that account is insufficient
to honour the cheque or that it exceeds the amount arranged
to be paid from that account by an agreement made with
that bank, such person shall be deemed to have committed
an offence and shall, without prejudice to any other
2
2025 SCC ONLINE DEL 6733
24
provisions of this Act, be punished with imprisonment for
a term which may be extended to two years, or with
fine which may extend to twice the amount of the
cheque, or with both. .
x-x-x-x-x ”
(Emphasis Supplied)
11.2. A perusal of above section shows that it does
not provide for sentence of imprisonment in default of
payment of fine.
11.3. Before proceeding further, to be noted here that
the petition was filed in 2023 and has remained pending since
then. In the meantime, the Bhartiya Nagrik Suraksha Sanhita,
2023 (for short-BNSS) came into force with effect from
01.07.2024. In view of this and the savings provisions in
section 531 of the BNSS Sanhita, the case is being dealt with
reference to the relevant provisions of the Code of Criminal
Procedure. However recitals of the various sections are from
BNSS, as other than change of number of the sections the
contents thereof are same, be it Cr. P.C. or BNSS.
11.4. As would be seen, under Section 24 of the BNSS
[Sentence of imprisonment in default of fine - Section 30 of Cr.
P.C.] the Magistrate may award such term of imprisonment in
default of payment of fine as is authorised by law. Statutory
limits on default imprisonment are thus prescribed under the
BNSS. Section 24, BNSS [Section 30, CrPC] provides that
default imprisonment cannot exceed one-fourth of the
maximum substantive term the Magistrate can impose.
For Section 138 cases, where the maximum
imprisonment is two years, the default term, therefore,
cannot exceed six months.
11.5 Cautious approach is required to avoid
disproportionate outcomes, such as awarding maximum
substantive imprisonment along with maximum fine and
maximum default imprisonment. For, such a recourse
would tend to blur the line between coercion and
punishment. I am of the view that, default imprisonment
25
should be imposed on a case-by-case basis, considering
the ability to pay, and ought not to be used as a tool of
enhancement of punishment. Ordinarily, the trial court
should adopt a judicial approach to first assess the
convict's financial capacity, instead of mechanically
imposing default imprisonment in a case under section
138.
11.6 One would have to, therefore, essentially look into
the relationship between the substantive provisions of the NIA
and the procedural framework of BNSS, particularly regarding
default imprisonment for unpaid fines.
11.7 At the core lies the distinction between substantive
punishment and default imprisonment. Section 138 of the NI
Act prescribes a maximum punishment of two years'
imprisonment, a fine up to twice the cheque amount, or both,
but does not specify the consequence of non-payment of fine.
Unlike Section 138 supra, Section 8(2) of BNS [Amount of Fine,
liability in default of payment of fine, etc. - Section 64 of IPC],
24 of BNSS [Sentence of imprisonment in default of fine-Section
30 of CrPC] and Section 471 BNSS [Money ordered to be paid
recoverable as fine - Section 431 Cr. P.C.] explicitly provide
consequences of non-payment of fine. Sections ibid , for ease of
reference produced here under:—
Section 8 BNS:
8. Amount of fine, liability in default of payment of
fine, etc. —
(1) Where no sum is expressed to which a fine may
extend, the amount of fine to which the offender is liable is
unlimited, but shall not be excessive .
(2) In every case of an offence-
(a) punishable with imprisonment as well as fine, in
which the offender is sentenced to a fine, whether with or
without imprisonment ;
26
(b) punishable with imprisonment or fine, or with
fine only, in which the offender is sentenced to a fine, it
shall be competent to the Court which sentences such
offender to direct by the sentence that, in default of
payment of the fine, the offender shall suffer imprisonment
for a certain term, in which imprisonment shall be in excess
of any other imprisonment to which he may have been
sentenced or to which he may be liable under a
commutation of a sentence .
(3) The term for which the Court directs the offender
to be imprisoned in default of payment of a fine shall not
exceed one-fourth of the term of imprisonment which is the
maximum fixed for the offence, if the offence be punishable
with imprisonment as well as fine .
(4) The imprisonment which the Court imposes in
default of payment of a fine or in default of community
service may be of any description to which the offender
might have been sentenced for the offence .
(5) If the offence is punishable with fine or
community sendee, the imprisonment which the Court
imposes in default of payment of the fine or in default of
community sendee shall be simple, and the term for which
the Court directs the offender to be imprisoned, in default of
payment of fine or in default of community sendee, shall not
exceed ,—
(a) two months when the amount of the fine does
not exceed five thousand rupees; and
(b) four months when the amount of the fine does
not exceed ten thousand rupees; and
(c) one year in any other case .
(6)(a) The imprisonment which is imposed in default
of payment of a fine shall terminate whenever that fine is
either paid or levied by process of law ;
(b) If, before the expiration of the term of
imprisonment fixed in default of payment, such a proportion
of the fine be paid or levied that the term of imprisonment
suffered in default of payment is not less than proportional
27
to the part of the fine still unpaid, the imprisonment shall
terminate .
Section 24 BNSS:
“ 24. Sentence of imprisonment in default of
fine .—(1) The Court of a Magistrate may award such term
of imprisonment in default of payment of fine as is
authorised by law:
Provided that the term —
(a) is not in excess of the powers of the Magistrate
under section 23 ;
(b) shall not, where imprisonment has been awarded
as part of the substantive sentence, exceed one-fourth of
the term of imprisonment which the Magistrate is
competent to inflict as punishment for the offence otherwise
than as imprisonment in default of payment of the fine .
(2) The imprisonment awarded under this section
may be in addition to a substantive sentence of
imprisonment for the maximum term awardable by the
Magistrate under section 23 .”
Section 471 BNSS:
(d). Money ordered to be paid recoverable as a
fine .—Any money (other than a fine) payable by virtue of
any order made under this Sanhita, and the method of
recovery of which is not otherwise expressly provided for,
shall be recoverable as if it were a fine:
Provided that section 461 shall, in its application to
an order under section 400, by virtue of this section, be
construed as if in the proviso to sub-section (1) of section
461, after the words and figures “under section 395”, the
words and figures “or an order for payment of costs under
section 400” had been inserted .
11.8 In all these sections, a common thread/intent
runs through i.e. default imprisonment is not an
28
additional punishment for the offence, but a coercive
measure to secure compliance with the court's monetary
order. It seems to be more as remedial rather than
punitive. Likewise, under Section 138, default
imprisonment is not punishment for cheque dishonour,
but a consequence of non-compliance of payment of fine,
ensuring the two-year cap remains intact. In other
words, it is not forced by court of law, but rather a choice
by a defaulter, opting consciously not to pay fine.
11.9 However, what seems to compound the
problem for fine defaulter, as is the case herein also, is
the non-obstante clause of section 138 i.e. “ without
prejudice to any other provisions of this Act ”. This phrase
acts as a legislative bridge, enabling enforcement of fines
through existing procedures, including default
imprisonment, without altering the punishment limit in
Section 138. But the said phrase in Section 138 is not to
be read as if it authorises additional
sentence/punishment. It merely serves to preserve the
applicability of other legal mechanisms i.e. procedural
tools under the BNSS.
11.10 As noted, the legislative intent behind
Section 138 is primarily remedial rather than penal. The
provision aims to ensure trust in commercial
transactions, and provide compensatory justice, not to
impose punitive excesses. Purpose of coercive measures
like default imprisonment ought to be resorted
proportionately. Excessive or automatic imprisonment is
fraught with danger of leading to a debtors' prison
model, thus impinging the rights under
Articles 14 and 21 of the Constitution. Default
imprisonment hence remains a procedural enforcement
tool rather than a disguised punitive measure.
11.11 This being the position in law, the use of
default imprisonment does not violate legislative intent,
as it is procedural, collateral, and most of it all, it is
optional/conditional on non-payment, and not part of the
substantive sentence for cheque dishonour. The
29
argument of the learned counsel for the petitioner to the
contrary, is thus rejected. The question of law framed
above is also answered accordingly.
12. At this stage I may also hasten to add, that the
Supreme Court in the Judgment titled Sharad Hiru
Kolambe v. The State of Maharashtra [(2018) 18 SCC 718] has
held that there is no power with the court to order the default
sentences to run concurrently. Argument to the contrary, as
canvassed by the Ld. Counsel for Petitioner, is, therefore, being
noted only to be rejected.
13. Adverting now to procedural tool in case of the
default of payment of the fine i.e. section 395 BNSS [Order to
pay compensation - 357 Cr. P.C.].
For ready reference, Section 395 is as under:
“ 395. Order to pay compensation .—(1) When a
Court imposes a sentence offine or a sentence (including a
sentence of death) of which fine forms a part, the Court
may, when passing judgment, order the whole or any part
of the fine recovered to be applied —
(a) in defraying the expenses properly incurred in
the prosecution ;
(b) in the payment to any person of compensation
for any loss or injury caused by the offence, when
compensation is, in the opinion of the Court, recoverable by
such person in a Civil Court ;
(c) when any person is convicted of any offence for
having caused the death of another person or of having
abetted the commission of such an offence, in paying
compensation to the persons who are, under the Fatal
Accidents Act, 1855 (13 of 1855), entitled to recover
damages from the person sentenced for the loss resulting to
them from such death ;
(d) when any person is convicted of any offence
which includes theft, criminal misappropriation, criminal
30
breach of trust, or cheating, or of having dishonestly
received or retained, or of having voluntarily assisted in
disposing of, stolen property knowing or having reason to
believe the same to be stolen, in compensating any bona
fide purchaser of such property for the loss of the same if
such property is restored to the possession of the person
entitled thereto .
(2) If the fine is imposed in a case which is subject
to appeal, no such payment shall be made before the period
allowed for presenting the appeal has elapsed, or, if an
appeal be presented, before the decision of the appeal .
(3) When a Court imposes a sentence, of which fine
does not form a part, the Court may, when passing
judgment, order the accused person to pay, by way of
compensation, such amount as may be specified in the
order to the person who has suffered any loss or injury by
reason of the act for which the accused person has been so
sentenced .
(4) An order under this section may also be made by
an Appellate Court or by the High Court or Court of Session
when exercising its powers of revision .
(5) At the time of awarding compensation in any
subsequent civil suit relating to the same matter, the Court
shall take into account any sum paid or recovered as
compensation under this section .”
13.1 It thus provides that when a Court imposes a
sentence of fine or a sentence (including sentence of death) of
which fine forms a part, the Court may, when passing the
judgment/order the whole or any part of the fine be
recovered, inter alia , for payment to any person as
compensation for any loss or injury caused by the offence,
when said compensation is, in the opinion of the court,
recoverable by the sufferer in a civil court.
13.2 In light of above, section 143(A) of the Negotiable
Instruments Act, 1881 be also seen before proceeding further,
which is as under:
31
“ 143A. Power to direct interim compensation .—
(1) Notwithstanding anything contained in
the Criminal Procedure Code, 1973, the Court trying an
offence under section 138 may order the drawer of the
cheque to pay interim compensation to the complainant —
(a) in a summary trial or a summons case, where he
pleads not guilty to the accusation made in the complaint;
and
(b) in any other case, upon framing of charge .
(2) The interim compensation under sub-section (1)
shall not exceed twenty per cent, of the amount of the
cheque .
(3) The interim compensation shall be paid within
sixty days from the date of the order under sub-section (1),
or within such further period not exceeding thirty days as
may be directed by the Court on sufficient cause being
shown by the drawer of the cheque .
(4) If the drawer of the cheque is acquitted, the
Court shall direct the complainant to repay to the drawer
the amount of interim compensation, with interest at the
bank rate as published by the Reserve Bank of India,
prevalent at the beginning of the relevant financial year,
within sixty days from the date of the order, or within such
further period not exceeding thirty days as may be directed
by the Court on sufficient cause being shown by the
complainant .”
13.3 It thus provides that the amount of fine imposed
under section 138 or the amount of compensation awarded
under section 395 of BNSS shall be reduced by the amount paid
or recovered as interim compensation under this section.
13.4 From a combined reading of the aforesaid
provisions of the NIA and the BNSS, it seems that in cases
under the Act, when a Court imposes a sentence of fine or a
sentence of which fine forms a part, the Court may, when
passing the judgment, order the whole or any part of the fine
recovered, inter alia, in the payment to any person of
32
compensation for any loss or injury caused by the offence,
when compensation is, in the opinion of the court, recoverable
by such person in civil court.
13.5 It is obvious that in the tables annexed with the
petitioner's nominal roll supra, the word ‘compensation’ under
the column ‘fine’ against various entries actually denotes the
fine and the same was/is to be paid as compensation to the
complainants. There seems nothing wrong with the same.
13.6 I, therefore, also reject the contention of the
learned counsel for the petitioner that the aggregate/combined
period of the substantive imprisonment and default
imprisonment cannot exceed the maximum prescribed
maximum two years' period of substantive sentence for the
offence.
14. During arguments, learned counsel for the petitioner
also contended that a sentence of imprisonment in default of
payment of fine could not have been imposed in these cases
since the conviction was under Section 138 of NIA since it does
not provide for sentence of imprisonment in default of payment
of fine. I am not inclined to entertain this contention, either.
The reasons are:
14.1 Firstly; in this lis , the petition does not contain any
challenge to the legality of order of sentence of imprisonment of
default of payment of fine or to the award of compensation to
the complainants. The petitioner only seeks indulgence to set
him free either by way of equalizing the sentences already
undergone in default of payment of fine as ordered and/or
otherwise pass appropriate orders to reduce the same.
Entertaining this contention at this belated stage would mean
springing a surprise for the opposite side, which would be
unjust and unfair.
14.2 Secondly; for its determination, the relevant Court
orders imposing the penalty of fine and in default of payment of
fine, to undergo various terms of imprisonment, would have to
be seen. Those relevant Court orders have not been brought on
record. In their absence, it does not seem appropriate for this
33
Court to examine and decide upon the challenge to their
legality/validity, let alone accept such challenge. In the
circumstances, this contention put forth by the learned counsel
for the petitioner is not entertained at this stage.
15. Having said that, I must, however, also take note
that, in support of his contention i.e. in default of payment of
fine, additional sentence of imprisonment cannot be imposed
under Section 138, learned counsel for the petitioner relied
upon P.T. Ratnakaran v. V.K. Prabhakara [ (2006) 9 SCC 784] . I
find that this contention raised by the learned counsel for the
petitioner otherwise of considerable interest warranting a
debate. This contention, not outrightly without substance and is
worthy of serious consideration, is, therefore, being examined
hereinafter, with a disclaimer that it purely in the abstract and
for academic discussion.
15.1 Moving on, when we analyse the inter play of BNSS,
NI Act and BNS, it is borne out that Section 8(2) of BNS
[Amount of fine, liability in default of payment of fine, etc. -
S. 64 of IPC] provides for the sentence in default of payment of
the fine i.e. the offender shall suffer imprisonment for a certain
term, which imprisonment shall be in excess of (in addition to)
any other imprisonment to which he may have been sentenced
or to which he may be liable under a commutation of sentence.
Applying the same analogy, I would interpret section 138 to
hold that for the offences under the Negotiable Instruments Act,
the sentence of imprisonment in default of payment of fine shall
be in excess of (in addition to) any other imprisonment to which
he may have been sentenced. In other words, for the offence
under section 138 of the Act, the imprisonment in default of
payment of fine shall be in excess of (in addition to) any other
imprisonment to which he may have been sentenced.
15.2 Before proceeding further, sections 4 and 5 of the
BNSS may also be noted here, which read asunder:
4. Trial of offences under the Bharatiya Nyaya
Sanhita, 2023 and other laws .—
34
(1) All offences under the Bharatiya Nyaya Sanhita,
2023 shall be investigated, inquired into, tried and otherwise
dealt with according to the provisions hereinafter contained .
(2) All offences under any other law shall be
investigated, inquired into, tried and otherwise dealt with
according to the same provisions, but subject to any
enactment for the time being in force regulating the manner
or place of investigating, inquiring into, trying or otherwise
dealing with such offences .
5. Saving .— Nothing contained in this Sanhita shall,
in the absence of a specific provision to the contrary, affect
any special or local law for the time being in force, or any
special jurisdiction and power conferred, or any special form
of procedure prescribed by any other law for the time being
in force .”
15.3 From a combined reading of sections 4 and
5 ibid and the provisions of the Act and the BNSS, it seems that
in cases under the Act, when a Court imposes a sentence of fine
or a sentence of which fine forms a part, the Court may recover
it from such person as per the procedure laid down in
BNSS/Cr.P.C.
15.4 Let us now see Section 24 of the BNSS
[Section 30 of Cr. P.C.], which has relevance here. It appears in
Chapter III captioned - POWER OF COURTS and at the cost of
repetition, it reads as under:
“ 24. Sentence of imprisonment in default
offine .—
(1) The Court of a Magistrate may award such term of
imprisonment in default of payment offine as is authorised by
law:
Provided that the term ---
(a) is not in excess of the powers of the Magistrate
under section 23 ;
(b) shall not, where imprisonment has been awarded
as part of the substantive sentence, exceed one-fourth of the
term of imprisonment which the Magistrate is competent to
35
inflict as punishment for the offence otherwise than as
imprisonment in default of payment of the fine .
(2) The imprisonment awarded under this section may
be in addition to a substantive sentence of imprisonment for
the maximum term awardable by the Magistrate under
section 23 .”
15.5 Under section ibid , a Magistrate is empowered
to award a term of imprisonment in default of payment of
a fine, as authorised by law. This means the sentence
must be authorised by law. It's important to note that
the power to award a sentence is one thing, while
authorising the punishment is different.
15.6 Section 8(2) of the BNS
[Section 64 of IPC]states that in every case of an offence
punishable with imprisonment as well as fine, or in every
case of an offence punishable with imprisonment or fine
or with fine only, in which the offender is sentenced to
fine, the court which sentences such offender shall direct
that in default of payment of the fine, the offender shall
suffer imprisonment for a certain term. This
imprisonment shall be in excess of (in addition to) any
other imprisonment to which he may have been
sentenced or to which he may be liable under a
commutation of sentence.
15.7 However, unlike the BNS, there is no such
specific provision in the Negotiable Instruments
Act authorising the court to direct that in default of
payment of the fine, the offender shall suffer
imprisonment for a certain term.
15.8 This specific provision in Section 8(2) of BNS
[section 64 IPC] is a case of authorisation by the
relevant applicable law i.e. IPC to award appropriate
term of imprisonment in default of payment of fine.
Evidently, on that analogy, for the award of sentence of
imprisonment in default of payment of fine, in cases
36
under other enactments/laws also, there should be the
necessary authorisation in those other enactments/laws.
16 This brings us to the core question: can a court, upon
conviction under Section 138, lawfully impose imprisonment in
default of fine?
16.1 The Apex Court's judgment in P.T.
Ratnakaran v. V.K. Prabhakaran (supra) relied upon by the
learned counsel for the petitioner reads as under:
“ 1. Leave granted .
2. We have heard counsel for the parties .
3. The appellant has since deposited the sum of Rs.
50,000 (Rupees fifty thousand only) which is payable to the
respondent. It is submitted on behalf of the appellant that a
sentence of imprisonment in default of payment of fine could
not have been imposed in the instant case since the
conviction is under Section 138 of the Negotiable
Instruments Act which does not provide for sentence
of imprisonment in default of payment of fine. Counsel
for the respondents does not dispute the said legal
proposition .
4. Accordingly, this appeal is allowed and the
sentence in default imposed on the appellant is set aside.
Since the amount of Rs. 50,000 (Rupees fifty thousand only)
has been deposited in the trial court, the respondents are at
liberty to withdraw the said amount on a proper application
being made before it .
5. This appeal is allowed to the extent indicated
above .”
16.2 The judgment, supra, indicates two points: i.e. (i)
the amount deposited was not a statutory fine but payable to
the complainant; (ii) the appellant had been directed to
undergo imprisonment in default of such payment, which was
set aside. Notably, Hon'ble Supreme Court did not expressly
declare the law but accepted the contention without dissent
from the respondent. This, at least implicitly, thus suggests that
37
a sentence of imprisonment in default of fine under Section 138
is impermissible.
16.3 It is significant to note that under Section 143A of
the Negotiable Instruments Act, the Court may order the
drawer of the cheque to pay interim compensation. However,
the provision does not specifically contemplate a sentence of
imprisonment in default of payment of fine under Section 138.
16.4 On an academic plane, my tentative view,
therefore, is that such imprisonment cannot be imposed
appears to be a persuasive argument. However, adopting this
position wholesale would have significant consequences. It
would invite challenges to default sentences not only under
the Negotiable Instruments Act but also under several statutes
prescribing fines without expressly authorising imprisonment in
default. Moreover, if such view is adopted, the cascading
consequences would be to open the floodgates to challenges
seeking to quash default sentences, not only under
the Negotiable Instruments Act but also under other statutes
which prescribe fines but do not explicitly authorize
imprisonment in default of payment. However, applying this
view would have.
17. Be that as it may, in the present case, the
petitioner stands convicted and sentenced in multiple cases
under the Negotiable Instruments Act to terms of substantive
imprisonment, coupled with fines, and, in default of payment of
such fines, to further terms of imprisonment. Under the relief of
quashing, the default sentences cannot be considered or
granted for multiple reasons i.e.;
17.1 Firstly, the petition does not assail the legality of
the orders imposing default sentences or the award of
compensation to the complainants. The limited relief sought is
indulgence—to release the petitioner by equalizing the
sentences already undergone in default of fine or by reducing
the same through appropriate orders.
17.2 Secondly, the orders imposing fines and directing
imprisonment in default have not been placed on record. In
38
their absence, this Court cannot, and ought not, examine their
legality or validity, much less strike them down.
17.3 Thirdly, a substantial period has elapsed since
those orders were passed. At this belated stage, it would
neither be just nor appropriate to unsettle finality by quashing
such long-standing orders.
17.4 Fourthly—and most significantly—to hold
that a conviction under Section 138 of the Negotiable
Instruments Act, which does not expressly provide for
default imprisonment, cannot entail such a sentence
would have far-reaching and disruptive consequences. If
such a view were adopted and applied for granting relief
to the petitioner, it would open flood gates and trigger
cascading impact not only under the Negotiable
Instruments Act but also under other statutes where
fines are prescribed without explicit provision for default
imprisonment, yet courts have imposed such sentences.
The ramifications would not only be enormous, the ripple
effect widespread but the consequences may lead to
nothing short of change of entire judicial landscape.
18. In this backdrop, although this Court has engaged
in academic discussion, ibid, but it would neither be proper nor
otherwise within the scope of instant petition to render a
conclusive finding on —either affirming or rejecting the
contention raised by learned counsel for the petitioner.
Particularly when there is no such prayer and such a contention
was urged for the first time during arguments. Accordingly, the
question is left open for determination in an appropriate case in
future.
CONCLUSION
19. Turning to the relief sought by the petitioner, it
is indeed correct, as urged by the learned APP, that
despite succeeding in protracted litigation, none of the
82 complainants have received compensation awarded
by the Courts, owing to the petitioner's failure to deposit
the fine amounts. However, I am firmly of the view that
39
it would be unjust and disproportionate to keep the
petitioner incarcerated any further on account of default
in payment of fine.
20. If the petitioner truly possessed the means to
pay the fine, it is inconceivable that he would choose to
languish in jail for its non-payment, fully aware that the
complainants could still approach the Courts for recovery
proceedings under law. Prolonged incarceration in such
circumstances serves no legitimate purpose; it brings no
real benefit to the complainants—save for a perverse and
punitive sense of satisfaction, which the law does not
countenance. As already stated, the settled legal position
is that default sentences cannot be directed to run
concurrently.
21. Accordingly, the facts and circumstances in the
present case particularly the sheer adversity and poverty
which the petitioner is currently suffering, make out a
case where this court, in exercise of its inherent
jurisdiction under section 528 of the BNSS, can reduce
the sentence of imprisonment awarded in default of
payment of fine and direct that sentences already
undergone by the petitioner in default of payment of fine,
be treated as the total punishment in default of payment
of fine in the aforesaid 82 cases.
22. Consequently, the total of default sentence
imprisonment in default of payment of fine in the 82
cases is reduced by proportionate staggering and
equalised to the period of imprisonment already suffered
by the Petitioner in default of payment of fine.
23. Before concluding, at the cost of repetition, I
may observe that Section 461 BNSS [Warrant for levy of
fine - Section 421 of Cr. P.C.] expressly empowers the
Court, even after an offender has undergone
imprisonment in default, to issue warrants for recovery
of fine. This statutory mechanism ensures that liability
for payment of fine survives the completion of the default
sentence. Thus, the complainants are not remediless. I
40
may hasten to add here, as a clarification, that the
instant order passed by this Court is not to be construed
in any manner to mean that the petitioner is absolved of
his liability to pay the fine amount. For its recovery, the
State/concerned complainants shall be at liberty to
proceed against the petitioner in accordance with law,
including taking steps under Section 461 BNSS
[Section 421 Cr. P.C.].
24. The default sentence imposed on the applicant
has become excessively harsh, albeit unintentionally.
Illustratively, if this case had involved only a single
cheque of Rs. 1.3 crores, the petitioner's position would
have been far less onerous. Ignoring the period of
imprisonment already undergone would effectively
subject the applicant to what is virtually a life sentence—
approximately 17 years [8 + 9=17], He has already
endured seven years and ten months in custody, and yet,
under the default sentence, he is required to serve an
additional nine years and several months. Such an
outcome is manifestly disproportionate and cannot be
justified.
25. The petition is thus allowed in the above terms.
A copy of this order shall be forthwith transmitted by the
registry to the Superintendent of Jail for immediate
compliance. The Jail Superintendent shall act upon the
authenticated copy of this order without delay. Subject to
verification by the competent authority of the completion
of substantive sentences of imprisonment in the 82 cases
as per the nominal roll. The Petitioner shall be released
from custody and set at liberty forthwith, if no longer
required in any other case.”
The Delhi High Court, in the aforesaid decision, embarked
upon a profound examination of the conceptual distinction
between substantive punishment and imprisonment in
41
default of payment of fine. The Court observed that default
imprisonment is not an additional punishment for the
offence of cheque dishonour, but merely a coercive and
procedural mechanism intended to secure compliance with
the monetary mandate of the Court.
11.2.1. The High Court cautioned that Courts must
remain vigilant against transforming the law into a de facto
debtors’ prison regime, for excessive or mechanical
imposition of default imprisonment would imperil the
constitutional guarantees enshrined under Articles 14 and
21 of the Constitution. The Court poignantly observed that
prolonged detention of a convict merely for inability to
satisfy a pecuniary liability serves no meaningful societal
purpose and risks collapsing the distinction between
enforcement and vengeance.
11.2.2. The facts in the said case before the Delhi High Court
was that, the petitioner had been convicted in as many as 82
complaints under Section 138 of the Act and had already undergone
42
incarceration for nearly seven years and ten months. The
cumulative default sentences, if enforced in their entirety, would
have compelled him to remain in prison for almost seventeen years.
The Court described such an outcome as manifestly
disproportionate, unconscionably harsh and wholly irreconcilable
with constitutional values. Consequently, exercising its inherent
jurisdiction under Section 528 of the BNSS, the Delhi High Court
reduced and equalised the default sentences to the period already
undergone by the petitioner and directed his immediate release
from custody.
11.2.3. The High Court further illuminated that even after a
convict undergoes imprisonment in default of payment of fine, the
liability to pay the amount does not evaporate into oblivion. The
machinery of Section 421 of the Cr.P.C., now Section 461 of the
BNSS, continues to empower the State and the complainant to
recover the amount in accordance with law. Therefore, continued
incarceration, despite the availability of statutory recovery
mechanisms, would amount to an excessive and constitutionally
suspect deprivation of personal liberty.
43
11.3. In the case of
CYRUS NOSHIRWAN KARTAK v.
3
STATE OF MAHARASHTRA , the High Court of Bombay
authoritatively interpreted the contours of Section 65 of the IPC vis-
à-vis imprisonment in default of payment of compensation and held
as follows:
“…. …. ….
“ 13. I have given anxious consideration to the aforesaid
submissions canvassed across the bar. Before adverting to the
core controversy that crops up for consideration, it may be
apposite to note few uncontroverted facts. Incontrovertibly, the
complainant had lodged 17 complaints for the offence
punishable under Section 138 read with Section 141 of the Act,
1881, against Accused 1 company and the Petitioner (A2), on
one and the same day and before the same Court. Indisputably,
all those complaints were decided on the same day i.e. 9-5-
2017 by separate judgments. Accused 1 and 2 were found
guilty of the offence punishable under Section 138 read with
Section 141 of the Act, 1881. The Petitioner (A2) was sentenced
to suffer simple imprisonment for 15 months and Accused 1 and
the Petitioner were directed to pay compensation specified in
each of the complaints under Section 357(3) of the Code and in
default of payment of compensation, the Petitioner (A2) was
sentenced to suffer Simple Imprisonment for 12 months in each
of the complaints. The learned Magistrate directed that the
substantive sentence in all the 17 complaints would run
concurrently. Sentence in default of payment of compensation
would, however, run consecutively. It is not in dispute that, in
the appeals preferred by the accused, the learned Additional
Sessions Judge found no reason to interfere with the judgments
3
2026 SCC OnLine Bom 2921
44
and orders passed by the learned Magistrate, even in regard to
the sentence.
14. In the backdrop of the aforesaid facts, the first
question that comes to the fore is, whether the accused could
have been prosecuted and punished separately in 17 distinct
complaints. The answer to the aforesaid question hinges upon a
further question as to whether, all the 60 cheques were drawn
as a part of one and the same transaction. It would be
contextually relevant to note the case set up by the
complainant in the statutory demand notice, which preceded
the complaints, and the averments in the complaints. In the
statutory notice, it was claimed that, towards the price of the
goods sold and delivered by the complainant to Accused 1
Company, a sum of Rs 22,68,07,788, was due and payable and
towards the discharge of the said liability, the accused has
drawn distinct cheques referred to in each of the complaints.
15. Likewise, in the complaints, it was alleged that a sum
of Rs 22,68,07,788 was outstanding towards the goods sold and
delivered by the complainant to Accused 1, and the cheques
drawn towards the payment of the price of the goods sold and
delivered were dishonoured on presentment. It could be urged
that, though the total outstanding amount was the same, the
cheques drawn towards the discharge of the liability in part, in
each of the complaints were presented and dishonoured on
different dates giving rise to distinct causes of action for lodging
separate complaints.
16. Nonetheless, were the courts below required to
pose unto themselves the question as to whether,
despite finding the accused guilty of the offences
punishable under Sections 138 read with Section 141 of
the Act, in all the 17 complaints, the accused could have
been sentenced to suffer imprisonment on one count of
the charge and awarded consolidated compensation on
the basis of the aggregate amount covered by the
dishonoured cheques, and, consecutively, one sentence
in default of payment of compensation ?
45
17. Mr Karia attempted to demonstrate that, 17
complaints pertained to different transactions evidenced by
distinct invoices and delivery challans. A chart of the invoices
and delivery challans, which formed the underlying transactions
in the discharge of liability towards which the cheques included
in different complaints were drawn, was sought to be tendered
for the perusal of the Court.
18. True, this court in exercise of its supervisory
writ jurisdiction may not delve into the thickets of facts
as if the very order of conviction for the offence
punishable under Section 138 read with Section 141 of
the Act, 1881, was under challenge. That question could
have been legitimately examined; more elaborately, in
the challenge to the orders passed by the learned
Sessions Judge in the appeals if the accused assailed the
same by filing properly constituted proceedings.
19. Ordinarily, the rule of single transaction is
resorted to in the matter of issue of direction to run the
sentences concurrently or consecutively. Under Section
427 of the Code, 1973, the Court is vested with the
discretion to determine whether the sentence would run
consecutively or concurrently. The exercise of discretion
is informed by the peculiar facts of the case and the
predominant factor is, whether the offences have
allegedly been committed as a part of the same
transaction.
20. I n the case of Mohd. Akhtar Hussain @ Ibrahim
Ahmed Bhatti v. Asstt. Collector of Customs4 , the
Supreme Court expounded that the provisions contained
in Section 427 relates to administration of criminal
justice and provides procedure for sentencing. The
sentencing court is, therefore, required to consider and
make an appropriate order as to how the sentence
passed in the subsequent case is to run. Whether it
should be concurrent or consecutive ? The basic rule of
thumb over the years has been the so-called single
transaction rule for concurrent sentences. If a given
transaction constitutes two offences under two
enactments generally, it is wrong to have consecutive
46
sentences. It is proper and legitimate to have concurrent
sentences. But this rule has no application if the
transaction relating to offences is not the same or the
facts constituting the two offences are quite different.
21. In the case of State of Punjab v. Madan Lal5 ,
where the accused was convicted for the offence
punishable under Section 138 of the Act in three
complaints, and sentenced to suffer imprisonment,
without giving benefit of Section 427 of the Code, the
Supreme Court upheld the order of the High Court that
the sentence imposed by the Court in all the three
complaints shall run concurrently.
22. In the case of V.K. Bansal (supra), the Supreme
Court enunciated that, under Section 427(1) the court
has the power and discretion to issue a direction but in
the very nature of the power so conferred upon the Court
the discretionary power shall have to be exercised along
the judicial lines and not in a mechanical, wooden or
pedantic manner. It is difficult to lay down any
straitjacket approach in the matter of exercise of such
discretion by the Courts. There is no cut and dried
formula for the Court to follow in the matter of issue or
refusal of a direction within the contemplation of Section
427(1). Whether or not a direction ought to be issued in
a given case would depend upon the nature of the
offence or offences committed and the fact-situation in
which the question of concurrent running of the
sentences arises.
23. The Supreme Court culled out the proposition, as
under:
“16. In conclusion, we may say that the legal position
favours exercise of discretion to the benefit of the prisoner in
cases where the prosecution is based on a single transaction
no matter different complaints in relation thereto may have
been filed as is the position in cases involving dishonour of
cheques issued by the borrower towards repayment of a loan
to the creditor.”
47
24. In the case at hand, the learned Magistrate has
indeed given the benefit of the provisions contained in
Section 427 of the Code, in the matter of the substantive
sentence of imprisonment of 15 months ordered to be
suffered in each of the 17 complaints. However, the
controversy arose on account of the award of the distinct
compensation in each of the complaints and even more
significantly on account of imposition of 12 months
sentence in default of payment of compensation in each
of the complaints.
25. In regard to the imposition of the sentence of
imprisonment of 12 months in default of payment of
compensation, the pivotal questions that arise for
consideration (i) could the learned Magistrate have
awarded imprisonment of 12 months in default of
payment of compensation ? (ii) whether the order to run
sentences in default of payment of compensation
consecutively, was legally sustainable ? And (iii) whether
the award of excessive sentence of imprisonment in
default of payment of compensation was justifiable ?
Limits of sentence in default of payment of fine:
26. A brief recourse to the provisions of the Criminal
Procedure Code, 1973 and the Penal Code, 1860, becomes
necessary. Section 30 of the Code, 1973, deals with the
sentence of imprisonment in default of fine. It reads as under:
“ 30. Sentence of imprisonment in default of
fine. - (1) The Court of a Magistrate may award such term of
imprisonment in default of payment of fine as is authorized
by law:
Provided that the term:
( a ) is not in excess of the powers of the Magistrate
under Section 29;
( b ) shall not, where imprisonment has been awarded
as part of the substantive sentence, exceed one-fourth of the
term of imprisonment which the Magistrate is competent to
48
inflict as punishment for the offence otherwise than as
imprisonment in default of payment of the fine.
(2) The imprisonment awarded under this section may
be in addition to a substantive sentence of imprisonment for
the maximum term awardable by the Magistrate under
Section 29.”
27. Section 65 of the Penal Code, 1860 prescribes limit
of imprisonment for non-payment of fine. It reads as under:
“ 65. Limit to imprisonment for non-payment of
fine, when imprisonment and fine awardable - The term
for which the Court directs the offender to be imprisoned in
default of payment of a fine shall not exceed one-fourth of
the term of imprisonment which is the maximum fixed for the
offence, if the offence be punishable with imprisonment as
well as fine.”
28. A conjoint reading of the aforesaid provisions
would indicate that the Magistrate is empowered to
award imprisonment in default of payment of fine, as is
authorized by law. The proviso to sub-section (1),
however, restricts the power of the Magistrate to impose
sentence in default of payment of fine. Firstly, it shall not
be in excess of the powers of the Magistrate under
Section 29. Secondly, where the imprisonment has been
awarded as a part of the substantive sentence, default
sentence shall not exceed 1/4th of the term of the
imprisonment, which the Magistrate is competent to
inflict as punishment for the offence for which the
accused is found guilty.
29. Section 65 of the Penal Code, 1860, contains an
interdict against sentencing the accused to imprisonment
in default of payment of fine, by providing that such
imprisonment shall not exceed the 1/4th of the
imprisonment which is the maximum term of the
sentence. Cumulatively, the imprisonment in default of
payment of fine shall not exceed:
49
(1) 1/4th of the maximum term of imprisonment
provided for the offence in question,
(2) 1/4th of the term of imprisonment, which the
Magistrate is competent to inflict as punishment, even
though the offence may entail greater punishment. For
example, an offence punishable under
Section 326 IPC entailed punishment of imprisonment
which may extend to life and, yet, the Magistrate of First
Class cannot impose a sentence of imprisonment for a
term not exceeding three years,
(3) the powers of the Magistrate under Section 29.
30. Reverting to the case at hand, the offence
punishable under Section 138 of the NI Act, 1881 entails
punishment which may extend to two years, or with fine
which may extend to twice the amount of cheque or with
both. In view of the provisions contained in
Section 65 IPC read with Section 30 of the Code, 1973,
the maximum sentence in default of payment of fine or
compensation awarded for the commission of an offence
punishable under Section 138 of the NI Act, 1881 would
be six months. The learned Magistrate was, thus, in error
in imposing the sentence of 12 months imprisonment in
default of payment of compensation awarded under
Section 357(3) of the Code, 1973. Sentence of 12 months
imprisonment is clearly in teeth of the mandate
contained in Section 65 IPC and Section 30 of the Code,
1973. These mandates are absolute.
31. A profitable reference in this context can be
made to a judgment of the Supreme Court in the case
of M.B. Manjegowda v. State of Karnataka6 , wherein the
Supreme Court enunciated that the mandate of
Section 65 IPC is absolutely clear and no default
sentence can be awarded in excess of ¼th of the
maximum punishment prescribed for the offence
concerned.
50
32. In view of the aforesaid position in law, the
imposition of 12 months imprisonment in default of
payment of compensation by the learned Magistrate was
clearly illegal. The learned Additional Sessions Judge also
failed to notice the legal infirmity in the sentence in
default of payment of compensation imposed by the
learned Magistrate.
Default Sentence: Consecutive or Concurrent :
33. T he legal position on the aspect of the
sentences in default in payment of fine running
consecutively and not concurrently, is well recognized.
To start with, Section 64 of the Penal Code,
1860 provides that, it shall be competent to the Court
which sentences the offender to direct by the sentence
that, in default of payment fo fine, the offender shall
suffer imprisonment for a certain term, which
imprisonment shall be in excess of any other
imprisonment to which he may have been sentenced or
to which he may be liable under a commutation of a
sentence. Section 64 of the Penal Code, thus, mandates
that the sentence awarded for non-payment of fine, shall
be in excess of any other imprisonment to which the
accused may have been sentenced.
34. Sub-section (2) of Section 30 of the Code,
provides that the imprisonment awarded under the said
section may be in addition to the substantive sentence of
imprisonment for the maximum term awardable by the
Magistrate under Section 29. Section 428 of the Code
further clarifies the position by excluding the
imprisonment in default of payment of fine, from the
ambit of set off to which the accused is entitled to on
account of the period of detention undergone by him
during the investigation, inquiry or trial of the case.
Therefore, the sentences in default of payment of fine or
compensation, cannot be made to run concurrently.
51
35. In the case of Sharad Hiru Kolambe v. State of
Maharashtra7 , the Supreme Court has held that the
default sentences cannot be directed to run concurrently.
Term of Default Sentence:
Justifiability of the nature of the sentence in
default of payment of fine or compensation ?
36. This leads me to the justifiability of the award
of 12 months imprisonment in default of payment of
compensation. A sentence in default of payment of fine is
in the nature of disapprobation of the conduct of the
accused in not complying with the order of the Court to
pay the fine or compensation. The sentence in default of
payment of compensation is not a device to enhance the
substantive sentence which the Court is empowered to
inflict by way of punishment. A substantive sentence of
imprisonment, as a part of punishment for the offence,
and, a sentence in default of payment of fine are
qualitatively different. A default sentence stands on a
different footing. Default sentence is essentially by way
of penalty for the failure to abide the order of the Court
to pay fine or compensation. Therefore, while imposing a
sentence in default of payment of fine, the Court should
be alive to the object of the measure of the sentence in
default. It can never be imposed by way of an additional
punishment.
37. In the case of Shanti Lal v. State of Madhya
Pradesh8 , the Supreme Court postulated the object of
sentence in default of payment of fine and the
considerations which ought to weigh in Court in imposing
the default sentence. The observations in para 31 read as
under:
“31……T he term of imprisonment in default of
payment of fine is not a sentence. It is a penalty
which a person incurs on account of non-payment of
fine. The sentence is something which an offender
must undergo unless it is set aside or remitted in
part or in whole either in appeal or in revision or in
52
other appropriate judicial proceedings or otherwise.
A term of imprisonment ordered in default of
payment of fine stands on a different footing. A
person is required to undergo imprisonment either
because he is unable to pay the amount of fine or
refuses to pay such amount. He, therefore, can
always avoid to undergo imprisonment in default of
payment of fine by paying such amount. It is,
therefore, not only the power, but the duty of the
court to keep in view the nature of offence,
circumstances under which it was committed, the
position of the offender and other relevant
considerations before ordering the offender to suffer
imprisonment in default of payment of fine.”
(emphasis supplied)
38. Following the aforesaid pronouncement, in the case
of Sahejadkhan Mahebubkhan Pathan v. State of Gujarat9 , the
Supreme Court interfered with the order of imposition of
three years imprisonment in default of payment of fine of
Rs 1.5 Lakhs, for having committed the offences
punishable under the NDPS Act, 1985 and reduced it to
six months. The Supreme Court reiterated the position in law,
as under:
“12. It is clear and reiterated that the term of
imprisonment in default of payment of fine is not a sentence.
To put it clear, it is a penalty which a person incurs on
account of non-payment of fine. On the other hand, if
sentence is imposed, undoubtedly, an offender must undergo
unless it is modified or varied in part or whole in the judicial
proceedings. However, the imprisonment ordered in default
of payment of fine stands on a different footing. When such
default sentence is imposed, a person is required to undergo
imprisonment either because he is unable to pay the amount
of fine or refuses to pay such amount. Accordingly, he can
always avoid to undergo imprisonment in default of payment
of fine by paying such an amount. In such circumstance, we
are of the view that it is the duty of the Court to keep in view
the nature of offence, circumstances in which it was
committed, the position of the offender and other relevant
considerations such as pecuniary circumstances of the
accused person as to character and magnitude of the offence
before ordering the offender to suffer imprisonment in
default of payment of fine. The provisions of
Sections 63 to 70 IPC make it clear that an amount of fine
53
should not be harsh or excessive. We also reiterate that
where a substantial term of imprisonment is inflicted, an
excessive fine should not be imposed except in exceptional
cases.”
(emphasis supplied)
39. In the case of Sharad Hiru Kolambe (supra), the
Supreme Court clarified that if the term of imprisonment
in default of payment of fine is a penalty which a person
incurs on account of non-payment of fine and is not a
sentence in strict sense, imposition of such default
sentence is completely different and qualitatively distinct
from a substantive sentence. In the said case as well, the
Supreme Court interfered with the order of imposition of
default sentence of three years imprisonment for non-
payment of fine for having committed the offences under
MCOCA, and reduced it to one year.
40. It is true, the offence punishable under
Section 138 of the NI Act, 1881, stands on a slightly
different pedestal. Ordinarily, the justice of the case
demands that the drawer of the cheque be directed to
pay the fine or compensation, as the case may be, to
compensate the payee. The prescription of punishment
for the dishonour of a cheque is predominantly for the
purpose of ensuring the sanctity of the cheque as a
negotiable instrument in the commercial transactions.
The penal measure primarily subserves the end of
compensatory justice rather than retributive or punitive
element. Nonetheless, while imposing the compensation,
the Court ought to have due regard to the situation in life
of the parties, especially that of accused. The
circumstances peculiar to the accused are of critical
salience while determining the quantum of sentence of
imprisonment in default of payment of fine or
compensation. The maximum permissible sentence in
default of payment of compensation may be legitimate.
However, the Court must pose unto itself a question
whether that would be reasonable and justifiable in the
facts and circumstances of the given case, for there is an
essential distinction between the permissibility of the
action and justifiability thereof.
54
41. Applying these principles to the facts of the
case, I find it rather difficult to accede to the submission
of Mr Karia that the Petitioner must suffer six months
imprisonment in default of payment of compensation in
each of the cases. The implications of the submission of
Mr Karia are that the Petitioner shall suffer substantive
sentence of imprisonment of 15 months and in addition,
shall suffer eight and half years of imprisonment in
default of payment of compensation. The sole reason
being the inability of the Petitioner to pay the amount of
compensation, directed to be paid in each of the
complaints.
42. The submission canvassed by Mr Karia, in the
considered view of this Court, cannot be countenanced, if
the guarantee of right to life and personal liberty under
Article 21 is to be given such an expansive interpretation
as it has received. A procedure which authorises the
detention of the convict for default in payment of
compensation for a term of eight and half years, when
the substantive sentence of imprisonment is 15 months
only, can only be said to be ex-facie unreasonable,
excessively harsh and shockingly disproportionate to the
non-compliance of the order to pay the compensation.
43. At this juncture, the purpose of imposition of
sentence in default of payment of fine assumes salience.
A system which detains the convict for his inability to pay
the compensation ordered by the Court for an
inordinately long period without anything more, may not
pass the muster of reasonable and fair procedure. The
approach to be adopted by the Court when a person is sought
to be detained in a prison for failure to pay the amount ordered
to be paid by the Court, delineated by the Supreme Court in the
case of Jolly George Varghese v. The Bank of Cochin10 , albeit in
a different context, deserves to be noted. In the context of the
execution of the decree for payment of money by detaining the
judgment debtor in prison, the Supreme Court enunciated the
law, as under:
55
“10. Equally meaningful is the import of
Art. 21 of the Constitution in the context of
imprisonment for non-payment of debts. The high
value of human dignity and the worth of the human
person enshrined in Art. 21, read with Arts. 14 and 19,
obligates the State not to incarcerate except under law
which is fair, just and reasonable in its procedural
essence. Maneka Gandhi case as developed further
in Sunil Batra v. Delhi administration11 , Sita
Ram v. State of U.P.12 and Sunil Batra v. Delhi
administration13 lays down the proposition. It is too
obvious to need elaboration that to cast a person in
prison because of his poverty and consequent inability
to meet his contractual liability is appalling. To be
poor, in this land of daridra Narayana, is no crime and
to ‘recover’ debts by the procedure of putting one in
prison is too flagrantly violative of Art. 21 unless there
is proof of the minimal fairness of his wilful failure to
pay in spite of his sufficient means and absence of
more terribly pressing claims on his means such as
medical bills to treat cancer or other grave illness.
Unreasonableness and unfairness in such a procedure
is inferable from Art. 11 of the Covenant. But this is
precisely the interpretation we have put on the Proviso
to s. 51 CPC and the lethal blow of Art. 21 cannot
strike down the provision, as now interpreted.”
(emphasis supplied)
44. The case of Sanjay Vasudeva (supra), on which
reliance was placed by Mr Bharadwaj, appears to be on
all four with the facts of the case at hand. In the said
case, the accused therein was convicted in as many as 82
complaints for the offence punishable under Section 138
of the N.I. Act, 1881. Despite aggreging with the
correctness of the submission that, none of the
complainants have received the compensation awarded
by the Courts owing to the accused's failure to deposit
the fine amount, the learned Single Judge of the Delhi
High Court, observed as under:
“19. Turning to the relief sought by the
petitioner, it is indeed correct, as urged by the learned
APP, that despite succeeding in protracted litigation,
none of the 82 complainants have received
compensation awarded by the Courts, owing to the
petitioner's failure to deposit the fine amounts.
56
However, I am firmly of the view that it would be
unjust and disproportionate to keep the petitioner
incarcerated any further on account of default in
payment of fine.
………
21. Accordingly, the facts and circumstances in
the present case particularly the sheer adversity and
poverty which the petitioner is currently suffering,
make out a case where this court, in exercise of its
inherent jurisdiction under Section 528 of the BNSS,
can reduce the sentence of imprisonment awarded in
default of payment of fine and direct that sentences
already undergone by the petitioner in default of
payment of fine, be treated as the total punishment in
default of payment of fine in the aforesaid 82 cases.
………..
24. The default sentence imposed on the
applicant has become excessively harsh, albeit
unintentionally. Illustratively, if this case had involved
only a single cheque of Rs 1.3 crores, the petitioner's
position would have been far less onerous. Ignoring
the period of imprisonment already undergone would
effectively subject the applicant to what is virtually a
life sentence—approximately 17 years [8 + 9 = 17]. He
has already endured seven years and ten months in
custody, and yet, under the default sentence, he is
required to serve an additional nine years and several
months. Such an outcome is manifestly
disproportionate and cannot be justified.”
45. The fact that the sentence in default of payment
of fine, even if undergone by the accused, does not
absolve the accused of the liability to pay the said
amount is also a relevant consideration. Section 421
empowers the Court even if the offender has undergone
imprisonment in default to issue a warrant for recovery
of the compensation ordered to be paid under Section
357 of the Code. If the amount of compensation ordered
to be paid to the complainant can still be recovered by
resorting to the procedure envisaged by the Code, further
detention of the Petitioner to undergo in default sentence
appears wholly unsustainable.
57
46. The imprisonment certificate dated 15-4-2026 issued
by the Superintendent, Nashik Road Central Prison, indicates
that the Petitioner has undergone total imprisonment of seven
years, six months and five days. The Petitioner has earned
remission of 719 days as of 31-3-2026. The total period of
imprisonment undergone by the Petitioner including the
admissible remission would, thus, come to nine years, six
months and five days.
47. In the backdrop of the aforesaid position in law
and the facts of the case, this Court considers the further
detention of the Petitioner to serve the default sentence
would be unjust, unconscionable and unjustifiable. I am,
therefore, inclined to allow the Petition and modify the
sentence in default of payment of compensation to the
period of sentence already undergone by the Petitioner in
default of payment of compensation in all the
complaints. ”
(Emphasis supplied at each instance)
The Bombay High Court, in a deeply reasoned judgment, held that
Section 65 of the Indian Penal Code embodies a clear legislative
interdict against excessive imprisonment in default of payment of
fine. The Court observed that the statutory ceiling under
Section 65 is absolute in character and unequivocally
mandates that imprisonment in default cannot exceed one-
fourth of the maximum substantive sentence prescribed for
the offence. Thus, in prosecutions under Section 138 of the
Negotiable Instruments Act, where the maximum
58
substantive punishment extends to two years, the default
sentence cannot travel beyond six months.
11.3.1. The High Court further expounded the intrinsic
distinction between a substantive sentence and a default
sentence. A substantive sentence, the Court observed,
constitutes punishment for the commission of the offence
itself; whereas imprisonment in default of payment of fine is
merely a penal consequence arising from non-compliance
with the Court’s monetary direction. It is therefore coercive,
regulatory and remedial in character, and can never be
employed as a disguised instrument to enhance substantive
punishment.
11.3.2. Applying those principles to the facts before it, the
Bombay High Court found that compelling the petitioner therein to
undergo an additional eight and a half years of imprisonment
merely in default of payment of compensation would be ex facie
unreasonable, shockingly disproportionate and wholly indefensible
in constitutional terms. Consequently, the Court held that further
detention of the petitioner would be unjust, unconscionable and
59
devoid of legal justification, and accordingly modified the default
sentence to the period already undergone.
12. In the light of the petitioner’s demonstrated financial
incapacity to satisfy the enormous fine amounts imposed upon him,
the acute hardship and destitution suffered by his family during his
prolonged incarceration, and the principles so luminously
enunciated by the High Courts of Telangana, Delhi and Bombay in
the aforesaid decisions, this Court is of the considered view that the
petitioner has made out a compelling case for grant of relief.
13. The petition, therefore, merits acceptance with a
declaration that the petitioner has undergone the sentence imposed
upon him and is consequently entitled to be released from prison
forthwith. It is, however, clarified that the proceedings initiated
under Section 421(1) of the Code of Criminal Procedure for
attachment and recovery against the properties of the petitioner
shall continue independently and uninfluenced by the observations
rendered herein. The present adjudication concerns only the
legality and proportionality of continued incarceration in
default of payment of fine and shall not eclipse or dilute the
60
statutory right of the complainant or the State to pursue
recovery proceedings in accordance with law.
14. With the aforesaid observations, the following:
ORDER
(i) Criminal Petition stands allowed in the light of, and
in consonance with, the observations and reasons
recorded in the course of the order.
(ii) The aggregate default sentence of imprisonment
imposed upon the petitioner is hereby
proportionately staggered, moderated and
consequently equalized to the period of
imprisonment already undergone by him in default of
payment of fine in C.C.No.15234/2021,
C.C.No.15235/2021 and C.C.No.15236/2021.
61
(iii) In consequence thereof, the petitioner shall be
enlarged from custody and set at liberty forthwith,
and in any event, within a period of four days from
the date of receipt of a certified copy of this order,
provided his detention is not required in connection
with any other case or proceedings pending against
him.
Sd/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ/SS