Thane Sessions Court Upholds Developer's Conviction In ₹16-Lakh Cheque Bounce Case, Reduces Fine To ₹24 Lakh

Mumbai, July 18, 2026: The Thane District and Additional Sessions Court has partly allowed an appeal filed by the proprietor of Sagar Developers and Realtors in a cheque dishonour case, upholding his conviction under Section 138 of the Negotiable Instruments Act while reducing the fine imposed by the trial court from Rs 32 lakh to Rs 24 lakh.

District Judge-3 and Additional Sessions Judge P.V. Ghule passed the order on July 16, confirming the conviction of Shehnawaz Sarfaraz Khan but modifying the sentence relating to the fine and the default imprisonment.

The accused had already undergone the substantive sentence of six months' simple imprisonment and had restricted his appeal to the quantum of fine after claiming that he had become insolvent and was unable to pay the amount.

Cheque Dishonour Dispute

The case arose from the dishonour of a cheque worth Rs 16 lakh issued by the accused. According to the complainant, he had advanced a friendly loan of Rs 20 lakh in October 2011, out of which the accused repaid Rs 4 lakh through two cheques of Rs 2 lakh each. The remaining liability of Rs 16 lakh was covered by a cheque that was dishonoured twice due to insufficient funds.

The accused, however, contended that the cheque was connected to a flat transaction and maintained that after paying Rs 4 lakh, only Rs 12 lakh remained in dispute.

During the proceedings, the court noted that although the complainant claimed the loan was supported by an agreement, no such agreement was produced in evidence.

The complainant himself admitted during cross-examination that an agreement had been executed but stated that it had been returned to the accused.

Fine Reduced On Appeal

The appellate court observed that the complainant had admitted receiving Rs 4 lakh from the accused. It held that the legally recoverable amount stood reduced to Rs 12 lakh and that the trial court had failed to account for the partial repayment while imposing a fine equivalent to twice the original cheque amount.

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Accordingly, the court reduced the fine from Rs 32 lakh to Rs 24 lakh, being twice the outstanding liability of Rs 12 lakh. It also reduced the default sentence from three months' simple imprisonment to two months.

The conviction and the six-month substantive imprisonment were left undisturbed. The court further directed that, upon recovery, the entire fine amount of Rs 24 lakh be paid to the complainant as compensation.

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