Rs 25,000 on a Rs 15,000 cheque is not excessive — the interest and the lawyer had to be paid for too
Justice Rakesh Kainthla dismisses a revision against enhanced compensation under Section 138, holding that on the Kalamani Tex scale a fine of up to twice the cheque amount with nine per cent simple interest would have been the norm.
A man walked into a shop in Lower Bazar, Shimla in 2010 and asked for Rs 15,000 for a short while. He got it, and gave a cheque back. The cheque bounced for insufficient funds, the notice went unanswered, and a complaint under Section 138 of the Negotiable Instruments Act followed. He was convicted in 2013; on appeal his compensation liability was raised from Rs 20,000 to Rs 25,000; and he took that to the High Court in revision. On 9 October 2026 Justice Rakesh Kainthla dismissed it, pointing out that the enhancement amounts to Rs 10,000 above the cheque amount for four years of lost money and the cost of a lawyer — and that the Supreme Court's own scale would have allowed considerably more.
Rs 15,000 in Lower Bazar
The complaint was that the accused approached the complainant in his shop at Lower Bazar, Shimla in 2010 and demanded Rs 15,000 for a short duration. The complainant paid it. The accused issued a cheque for Rs 15,000 to repay the amount, which the complainant presented to his bank; it was dishonoured with the endorsement “insufficient funds”. A statutory notice was issued and duly served, the amount was not paid, and the complaint was filed.
The Judicial Magistrate convicted him by judgment dated 21 February 2013 and passed the order of sentence on 10 April 2013. The Sessions Judge, Shimla, by judgment dated 12 November 2014, partly upheld those orders — and increased the compensation from Rs 20,000 to Rs 25,000. The revision before the High Court was directed against that judgment.
What the enhancement actually came to
The Court's answer begins with arithmetic. The cheque was issued on 16 June 2010 for Rs 15,000. The sentence was imposed on 10 April 2013. Compensation was increased to Rs 25,000 by the appellate court in November 2014. Measured against the cheque amount, therefore, “only compensation of Rs 10,000 was awarded to the complainant on the cheque amount of 15,000”.
Against that sum the Court set what the complainant had lost. He lost the money he would have gained by investing the amount. He had to engage an advocate to prosecute the complaint before the trial court. He was therefore entitled to be compensated for the loss sustained.
And the measure of compensation is not left to impression. The Court relied on Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283, where the Supreme Court held that the object of Chapter XVII of the Negotiable Instruments Act “is not only punitive but also compensatory and restitutive”; that the provisions envision a single window for criminal liability for the dishonour of a cheque as well as civil liability for the realisation of the cheque amount; and that unless special circumstances exist, courts should uniformly levy fines up to twice the cheque amount along with simple interest at nine per cent per annum, following R. Vijayan v. Baby, (2012) 1 SCC 260.
Measured on that scale, twice the cheque amount would have been Rs 30,000 before any interest. Rs 10,000 above the cheque amount, four years later, covering both the lost interest and the litigation expenses, “cannot be said to be excessive requiring any interference from this court”.
The judgment is also a reminder of what the compensation power under the Negotiable Instruments Act is for. On the Supreme Court's reading, Chapter XVII does not merely punish the drawer of a dishonoured cheque; it provides a single window in which the criminal liability for the dishonour and the civil liability to make good the amount are dealt with together. A complainant who has been kept out of his money for years and has had to pay for a lawyer to recover it is meant to be restored, not merely vindicated — which is why a figure above the face value of the cheque is the norm rather than an indulgence. Measured that way, the appellate court's enhancement was conservative, and the revision was an appeal against leniency.
Order
The compensation of Rs 25,000 was held not excessive. No other point was urged. The revision failed and was dismissed, along with any pending applications, and the records of the courts below were directed to be returned with a copy of the judgment.
The case is a small one, and that is rather the point of it. A loan of Rs 15,000 made in 2010 produced a conviction in 2013, an appellate judgment in 2014, and a final word from the High Court in 2026 — sixteen years, over a sum that would not cover the fees of the revision. The complainant has his Rs 25,000 on paper; whether sixteen years of litigation over a Rs 15,000 loan was worth anybody's while is a question the compensation scale cannot answer.