Cheque Bounce Case Re-sent Back for Compensation Reassessment

Cheque Bounce Case Re-sent Back for Compensation Reassessment: Advocate Akanksha Roy Explains Key Judgment in Jugjit Kaur v. Rajwinder Singh [2025:PHHC:033187]

Cheque dishonoured with remark “Account Closed” – Yet only ₹10,000 fine imposed? High Court calls it unjust, remands case back for proper sentencing.

In a significant ruling that reinforces the compensatory objectives of Section 138 of the Negotiable Instruments Act, 1881, the Punjab and Haryana High Court has set aside the sentence awarded in a cheque bounce case where the complainant received no compensation, despite suffering a financial loss of ₹19,00,000 due to dishonour of cheque. The Court held that merely punishing the accused with imprisonment is not enough, and that adequate compensation must be paid to the complainant.

As an experienced cheque bounce lawyer in Delhi, I, Advocate Akanksha Roy, explain below the detailed facts and legal implications of this case.

Case Title  

Jugjit Kaur v. Rajwinder Singh  

Facts of the Case – A Complete Background

The petitioner, Jugjit Kaur, was the sole proprietor of M/s Matharu Agro Industries.

She borrowed ₹19,00,000 in cash from the respondent/complainant, Rajwinder Singh, for business purposes.

The loan transaction took place in the presence of two witnesses: Desa Singh and Balwinder Singh, both residents of Dialpura, District Bathinda.

At the time of borrowing, the petitioner issued post-dated cheque no. 030622 dated 02.04.2015 from her account at State Bank of Patiala, Goniana Mandi.

The complainant later deposited the cheque in his account with HDFC Bank, Goniana, but it was returned dishonoured with the remark: "Account Closed" on 03.04.2015.

The complainant served a legal notice dated 15.04.2015, but the accused failed to repay the amount.

The complainant then filed a complaint under Section 138 of the NI Act.

Trial Court Verdict

The Judicial Magistrate First Class, Bathinda, vide order dated 25.10.2017, convicted the petitioner under Section 138 NI Act.

The punishment awarded was: 

  2 years rigorous imprisonment  

  Fine of ₹10,000  

  In default, 2 additional months of imprisonment

  However, no compensation was awarded to the complainant despite clear monetary loss.

Appeal and Revision

The conviction was upheld by the Additional Sessions Judge, Bathinda, on 09.01.2025.

The petitioner then approached the Punjab and Haryana High Court via Criminal Revision No. 151/2025.

During the hearing, the respondent did not appear, and Mr. J.S. Mehndiratta, Advocate, was appointed as Amicus Curiae. Later, Mr. P.K.S. Phoolka, Advocate, also appeared for the respondent.

High Court’s Observations and Legal Analysis

Justice N.S. Shekhawat held that the Trial Court erred in awarding only a meagre fine of ₹10,000, without compensation, in a case where:

The cheque amount was ₹19,00,000

The dishonour happened 10 years ago

The remark on return was “Account Closed”, indicating no intent to repay

Important Legal Points:

Section 138 empowers the Magistrate to impose:

Imprisonment up to 2 years

Fine up to twice the cheque amount

Or both

The compensatory element must not be ignored. The goal is not just to punish but to make the complainant financially whole.

The Court emphasized the applicability of Section 357 CrPC, which allows compensation to be paid out of the fine amount.

 Judgment Outcome

The High Court allowed the revision.

The judgments of both the Trial Court and the Appellate Court were set aside to the extent of quantum of sentence.

The matter was remanded back to the Trial Court to reconsider:

 Imposition of appropriate fine

 Award of adequate compensation

The petitioner was granted interim bail until the Trial Court passes the new sentencing order.

The Registrar General was directed to circulate this judgment to all subordinate judicial officers to ensure uniformity in sentencing.

Why This Case Matters – 

As an advocate who regularly represents parties in Section 138 NI Act cases, I believe this judgment is a strong message that:

Courts must protect complainants’ financial interests  

Accountability must come with reimbursement  

Imprisonment alone doesn’t serve the purpose unless it is paired with fair compensation

This judgment also provides a benchmark for sentencing in cheque dishonour cases involving high-value cheques, ensuring that complainants are not left to pursue civil recovery after criminal conviction.

Why Choose Advocate Akanksha Roy – Best Cheque Bounce Case Advocate in Delhi

Practicing in Rohini, Tis Hazari, Saket, Dwarka, Karkardooma & Delhi High Court  

Expert in Section 138 NI Act, Section 143A interim compensation, Section 357 CrPC compensation 

Proven record of maximum recovery and conviction in cheque dishonour cases  

Transparent, professional, and client-centric legal solutions  

CRR 151 of 2025 (O&M) 

Neutral Citation: 2025:PHHC:033187  

Decided on: 10.03.2025 

Coram: Hon’ble Mr. Justice N.S. Shekhawat

Need Legal Help in a Cheque Bounce Matter?

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