How Many Ounces of Flesh Does a Convict Have to Pay Every Day for the Inability to Pay the Money? — Punjab & Haryana HC Applies ‘Cost of Liberty’ Principle, Reduces NI Act Sentence to Period Already Undergone

Case Name: Gulab Singh v. State of Haryana and Another

Date of Judgment: 20 May 2026

Citation: CRR-684-2026

Bench: Justice Anoop Chitkara

Held: The Punjab and Haryana High Court held that while maintaining conviction under Section 138 of the Negotiable Instruments Act, the substantive sentence could be reduced to the period already undergone where continued incarceration becomes disproportionate to the unpaid compensation amount. The Court emphasized that “cost of liberty must be proportionate” and enhanced the compensation amount from ₹5.70 lakh to ₹6.10 lakh while directing release of the convict.

Summary: The petitioner-convict challenged concurrent findings of conviction passed by the Trial Court and affirmed by the Appellate Court under Section 138 of the Negotiable Instruments Act concerning dishonour of a cheque amounting to ₹3.80 lakh. The Trial Court had sentenced the petitioner to one year simple imprisonment along with compensation of ₹5.70 lakh.

Before the High Court, the petitioner did not substantially assail the conviction and confined his submissions to reduction of sentence on the ground of financial incapacity. The complainant opposed reduction of sentence unless compensation was further enhanced.

The Court examined the custody certificate showing that the petitioner had already undergone custody of 3 months and 11 days. Justice Anoop Chitkara undertook a proportionality analysis by calculating the per-day imprisonment value corresponding to the unpaid compensation amount and observed that the convict was effectively compromising his liberty for merely ₹5,000 per day.

In a significant observation on sentencing jurisprudence, the Court held that imprisonment for non-payment of compensation must remain proportionate and consistent with similarly placed convicts under Article 14 of the Constitution. The judgment emphasized that constitutional courts cannot remain passive where disproportionate incarceration affects personal liberty.

Consequently, while maintaining the conviction, the High Court reduced the substantive sentence to the period already undergone and enhanced the compensation by ₹40,000, increasing it to ₹6.10 lakh. The Court also directed immediate release of the petitioner if not required in any other case.

Decision: The criminal revision petition was partly allowed. The conviction under Section 138 of the Negotiable Instruments Act was upheld, but the sentence of imprisonment was reduced to the period already undergone by the petitioner. Simultaneously, compensation payable to the complainant was enhanced from ₹5,70,000 to ₹6,10,000. The Court directed release of the petitioner forthwith subject to his custody status in any other matter and ordered disbursal of compensation to the complainant through bank transfer.