Fine can't exceed twice the value of bounced cheque, says Karnataka HC

BENGALURU: In a cheque bounce case, Karnataka high court has ruled that trial courts cannot levy fines exceeding twice the dishonoured cheque amount.

Justice V Srishananda made this observation while partly allowing the appeal filed by Mahadevi, an agriculturist from Banahatti, Jamakhandi taluk of Bagalkot district. In Nov 2007, Mahadevi had purchased two trailers from Krishi Lakshmi Agro Industries, Hubballi, for Rs 3,80,000. Mahadevi issued a cheque for Rs 3.8 lakh for the two trailers, but the cheque was dishonoured, following which, a cheque bounce case was registered against her by the seller.


On May 8, 2017, the magistrate's court at Banahatti convicted her, directing her to pay Rs 7.65 lakh, with Rs 7.6 lakh as compensation to the seller and Rs 5,000 as defraying expenses to state govt.



Subsequently, Mahadevi’s appeal against the order was dismissed by the district court at Bagalkot, forcing her to approach the high court. She claimed that the trailers had not been delivered to her. After going through the records, Justice Srishananda said Mahadevi failed to establish her claim by cogent evidence.
Thereafter, the judge directed Mahadevi to pay Rs 7.6 lakh as compensation to the complainant. However, regarding the Rs 5,000 to be paid towards defraying expenses to the state govt, the judge set aside the order, ruling that no state machinery was involved in the transaction.