Courts Cannot Impose a Fine of More than Twice the Amount in Bounced Cheques – Supreme Court. Section 138 of the Negotiable Instruments Act, 1881.
The Supreme Court of India (SC) on 16 October 2013 ruled that Courts cannot impose a fine of more than twice the amount in bounced cheques.
According to the Section 138 of the Negotiable Instruments Act, 1881 a person (whose cheque has bounced) shall without prejudice to any other provision of this act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both.
A bench of Justice TS Thakur and Justice Vikramajit Sen while ruling this direction explained that even in a case where the court may be taking a lenient view in favor of the accused by not sending him to prison, it cannot impose a fine more than twice the cheque amount. That statutory limit is inviolable and must be respected.