Punjab & Haryana HC Reduces Section 138 Sentence, Flags Rs. 5,000-Per-Day Cost of Liberty as Disproportionate

Justice Anoop Chitkara reduced a cheque-dishonour convict's sentence to time already served, holding that imprisonment for non-payment of compensation must be proportionate to the money unpaid and consistent with Article 14.

The High Court of Punjab and Haryana at Chandigarh has reduced the substantive sentence of a convict under Section 138 of the Negotiable Instruments Act, 1881 to the period he had already undergone in custody, while simultaneously enhancing the compensation payable to the complainant. Justice Anoop Chitkara, sitting singly, pronounced the judgment on 20 May 2026 in a criminal revision petition filed by Gulab Singh, who had been convicted by the trial court and whose conviction and sentence were affirmed by the Sessions Court. The court's reasoning rested on a calculation showing that the convict was effectively paying Rs. 5,000 per day of his liberty for the inability to discharge a monetary obligation, a rate the court found irreconcilable with the constitutional guarantee of equality under Article 14.

The Conviction and Sentence Under Challenge

The trial court, in Complaint Case No. NACT-551-2015, convicted Gulab Singh under Section 138 of the Negotiable Instruments Act and sentenced him to simple imprisonment for one year along with a compensation amount of Rs. 5,70,000 in favour of the complainant, Virender Chauhan. The cheque amount involved was Rs. 3,70,000 as recorded in the trial court's judgment, though the trial court table also reflected a cheque amount of Rs. 3,80,000. No default imprisonment was imposed for non-payment of the fine or compensation.

Gulab Singh challenged the conviction and sentence before the Sessions Court in Criminal Appeal No. CRA-212-2024. By its order dated 27 January 2026, the Sessions Court upheld the conviction, sentence, and compensation in their entirety. Gulab Singh then approached the High Court by way of the present criminal revision petition.

What the Parties Argued

Counsel for the petitioner, Mr. R.S. Mamli, did not press for acquittal. His submission was confined to seeking a reduction of the sentence on the ground that the petitioner lacked the financial capacity to pay the compensation amount. He asked the court to reduce the sentence to the period already undergone in custody.

Counsel for the complainant, Mr. Ajay Chauhan, opposed any reduction in sentence. He argued that if the court were inclined to reduce the sentence to time served, the compensation amount should be increased by Rs. 50,000.

In response, counsel for the petitioner accepted an enhancement of compensation but proposed that the increase be limited to Rs. 40,000 rather than Rs. 50,000.

The Per-Day Calculation and the Proportionality Concern

Before addressing the competing submissions, Justice Chitkara set out a structured calculation. As of the custody certificate dated 30 April 2026, Gulab Singh had undergone custody of three months and eleven days in the present complaint, which the court translated to 114 days. The total fine and compensation imposed was Rs. 5,70,000, with no amount deposited. The outstanding amount therefore remained Rs. 5,70,000.

Dividing the outstanding amount by the number of days in custody, the court arrived at a per-day figure of Rs. 5,000. The court observed that this calculation showed the convict was “compromised his liberty for the non-payment of money, which comes to a meager amount of Rs. 5000/- every day.”

The court then articulated the doctrinal concern directly. It described the core question as: how many ounces of flesh does a convict have to pay every day for the inability to pay money? The court observed that the responsibility for proportionate sentencing legislation lay with the executive, but in the absence of such legislation, the High Court, as a primary guardian of fundamental rights, could not remain passive.

Justice Chitkara invoked Article 14 of the Constitution of India, holding that to give meaning to equality and the principle of parity, the period of imprisonment a convict undergoes for non-payment of fine and compensation must be equivalent to the money unpaid and consistent with that imposed on similarly placed convicts. The court stated: “Cost of liberty must be proportionate.”

Why the Reasoning Matters

The court's approach is significant because it treats the per-day cost of incarceration as a measurable variable that must bear a rational relationship to the unpaid monetary obligation. By framing the issue through Article 14, the court located proportionate sentencing not merely as a matter of judicial discretion but as a constitutional requirement of equality. The court also acknowledged that the seeds of proportionate sentencing have sprouted across jurisdictions, and that the absence of executive legislation does not relieve the court of its obligation to protect individual liberty.

The court did not disturb the conviction itself. The revision was partly allowed only on the question of sentence, with the compensation simultaneously enhanced to ensure the complainant was not left worse off by the reduction in custodial sentence.

Order

Justice Chitkara partly allowed the criminal revision petition. The conviction under Section 138 of the Negotiable Instruments Act was maintained and upheld. The sentence of substantive imprisonment was reduced to the period already undergone by the petitioner. The compensation was enhanced by Rs. 40,000, from Rs. 5,70,000 to Rs. 6,10,000.

The court directed that compensation deposited, along with any interest accrued on deposits less applicable taxes, shall be released in favour of the complainant by transfer to a bank account in which the complainant is the sole holder.

Gulab Singh, who was in custody in the present case, was directed to be released forthwith, provided he was not lodged in custody in any other case. The Registry was directed to prepare release warrants or immediately communicate with the concerned trial court for their preparation.

CRM-21853-2026, which had been filed alongside the revision petition, was rendered infructuous and disposed of. The judgment was marked as speaking and reportable.