In a landmark decision delivered on June 4, 2025, the High Court of Karnataka (Justice J.M.Khazi) in A.V. Poojappa v. Dr. S.K. Vagdevi—with Sri Mahesh Kiran Shetty representing
the petitioner and Sri Angad Kamath, Amicus Curiae, for the respondent—became the first in the stateto lay down concrete guidelines regulating sentencing discretion in cheque bounce cases under Section 138 of the Negotiable Instruments Act. Recognizing widespread inconsistencies and the
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lack of uniformity in the quantum of fines and compensation awarded by lower courts, the Court
mandated that sentencing must be based on objective criteria, including the cheque amount, natureof the transaction, false defences or delay tactics by the accused, and the loss or opportunity cost suffered by the complainant. Stressing that mere token compensation undermines the very object of the NI Act, the Court held that appellate courts must record robust reasons before reducing fines.
This judgment is poised to serve as a template for all courts in Karnataka, marking a pioneering judicial effort to ensure that sentencing in cheque dishonor cases is fair, deterrent, and truly restitutive—ushering in a new era of consistency and credibility in the enforcement of financial liabilities.
By Harshith Gowda,
Email: harsh.cric16@gmail.com
