CASE NAME: Mr. Dinesh Malpani v. The State of Karnataka & Ors.
CASE NUMBER: CRIMINAL PETITION No. 5718 OF 2026
COURT: High Court of Karnataka at Bengaluru
DATE: 04 June 2026
QUORUM: Hon’ble Mr. Justice M. Nagaprasanna
FACTS
The matters in dispute are related to a loan made by Respondent No. 3 to the Petitioner on 22 December 2017. On this date, Respondent No. 3 lent the Petitioner ₹10 crores. The Petitioner issued three cheques to Respondent No. 3 (one for ₹50 lakh, one for ₹3.5 crores, and one for ₹5 crores); however, all of the cheques were returned to Respondent No. 3 due to insufficient funds in the Petitioner’s account to honour them. As a result of the three returned cheques, Respondent No. 3 filed three separate complaints against the Petitioner under Section 138 of the Negotiable Instruments Act, 1881, which resulted in three separate criminal cases against the Petitioner for the dishonour of the cheques.
In each of the three matters brought against him, the trial court found the petitioner guilty of an offence and imposed a fine and sentenced him to serve three months’ simple imprisonment for each offence if he did not pay the fines. The petitioner was taken into judicial custody after having served six months of his cumulative default sentences on 29 September 2025, after the default sentences were activated because he had not paid the fines ordered by the trial court. The petitioner’s application to the High Court for immediate release was premised on the fact that the total amount of his default sentences exceeded the maximum length permitted by law.
ISSUES
- Can the imposition of separate default sentences in three separate prosecutions for crimes arising out of a single continuous incident create an excessive punishment violating Section 65 of the Indian Penal Code (IPC) and Section 8(3) of the BNS, thereby giving the petitioner an unconditional right to be released immediately?
LEGAL PROVISIONS
- The Negotiable Instruments Act, 1881, Section 138 – Dishonour of cheque
- Section 65 of I.P.C., and Section 8(3) of B.N.S. – Limit to imprisonment for non-payment of fine, when imprisonment and fine are awardable.
- Section 30 of the Code of Criminal Procedure (Cr.P.C.) and Section 24 of the Bharatiya Nagarik Suraksha Sanhita (BNSS).
- Case Law: K. Pranil Reddy v. State of Telangana; Sanjay Vasudeva v. State of NCT Delhi; Cyrus Noshirwan Kartak v. State of Maharashtra.
ARGUMENTS
Appellants
The petitioner argued that because the longest possible prison sentence under Section 138 is two years, the maximum prison sentence for an offence cannot be more than one-fourth of that (6 months) under both Section 65 IPC and Section 8 (3) of the BNS. Moreover, all three complaints stemmed from one loan transaction and the continuance of the petitioner’s imprisonment as a result of his inability to pay the loan is creating significant hardship for his entire family.
Respondents
The respondents contended that the default sentences imposed for failing to pay the fines are to be served consecutively and that, therefore, the total time the petitioner would serve in prison was nine months. The respondents argued that each dishonoured cheque is a separate and distinct cause of action.
ANALYSIS
The Court has stated that both Sections 8(3) of the BNS and 65 IPC limit the amount of time that can be served by an individual who has defaulted on their obligation to pay a fine, and that this limitation is intended to provide an estimated length of inactivity for an offender. Imprisonment for the purpose of securing payment is supposed to act as a means of coercion rather than an overly punitive punishment.
The Court cited decisions from the Delhi, Bombay and Telangana High Courts, noting that if a person fails to meet their financial obligation to pay a fine due to a lack of funds, then they could find themselves in a repeat cycle of defaulting and continuing to be imprisoned for a longer period of time, which, in effect, eliminates the distinction between enforcement and revenge. The Court also determined that a cumulative default sentence that is longer than the allowable statutory limit would violate an individual’s constitutional rights to freedom and dignity, and an individual may still be liable to pay the fine following the discharge of their default sentence and may be pursued under Section 421, Cr.P.C.
JUDGMENT
The applications filed by the Petitioner were granted. The Court ordered the staggered and proportional aggregate default sentence (6 months’ imprisonment already served) imposed on the Petitioner, released immediately. The attachment and collection proceedings under Section 421(1) of the Cr.P.C. can continue.
CONCLUSION
The High Court reiterated that the imposition of a default sentence (i.e. imprisonment) as a result of non-payment of a fine cannot go beyond the statute limitation imposed by law, or be utilised for punitive or excessive purposes. The ruling is designed to balance the provisions of compensatory justice available for commercial disputes and the constitutional rights to liberty of individuals, thus preventing the establishment of a de facto debtors’ prison.
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WRITTEN BY: VINEET SEERVI
Read the judgment copy below:
Mr. Dinesh Malpani v. State of Karnataka & Ors.
